HUNTINGTON, W.Va. — U.S. District Judge Robert C. Chambers ordered North American Services Group, LLC, to pay plaintiffs’ legal fees after the company failed to disclose two insurance policies totaling $17 million, ruling that a corporate entity cannot hide behind its carrier’s silence.
The dispute centers on Federal Rule of Civil Procedure 26(a)(1)(A), which mandates that parties disclose any insurance agreement that might satisfy a judgment. North American Services Group, LLC, doing business as Evergreen North American Industrial Services, missed the Jan. 21, 2025, deadline to make initial disclosures, serving them one day late on Jan. 22.
When the disclosures arrived, plaintiffs’ counsel noted they contained “any insurance information of any kind.”
Plaintiffs’ attorney later sent a letter to defense counsel asking if there was “any excess coverage or umbrella coverage” beyond the $1 million worker’s compensation policy initially revealed.
Defense counsel contacted the insurance adjuster, left a voicemail, and received no response. He made no further attempt to confirm coverage.
The court found that the company held a $15 million excess policy and a $1 million comprehensive general liability policy that may have applied to the claims.
The company never disclosed the comprehensive general liability policy and did not reveal the excess policy until March 2, 2026, after discovery had closed and mediation had occurred.
Defense counsel blamed the nondisclosure on the insurance carrier, stating he had asked for coverage information but the carrier did not respond for over a year.
During a hearing, the attorney admitted he never asked the company itself what insurance policies it held.
Chambers rejected the defense’s argument that sanctions were unwarranted because the “actions and inactions alleged are those of its’ [sic] carrier and counsel.”
“A sophisticated entity like ENAIS has a duty to ensure that its counsel and insurance carriers do not make misrepresentations in violation of the Federal Rules of Civil Procedure,” Chambers wrote.
The judge noted there was no indication the company attempted to correct its counsel’s misunderstanding.
The nondisclosure was “egregious,” Chambers wrote, because the company claimed it had $1 million in coverage when it actually had $17 million.
Plaintiffs had sought a default judgment, but Chambers denied the motion as moot after the parties settled the underlying case.
The judge declined to impose a punitive monetary sanction, noting that such fines are criminal in nature and require procedural protections the court was not inclined to provide.
Instead, Chambers ordered the company to compensate plaintiffs and their counsel for the costs and fees incurred as a result of the nondisclosure.
The court directed plaintiffs to file a memorandum by May 28, 2026, detailing the time spent requesting additional insurance disclosures and briefing the sanctions motion.