A San Antonio jury this week was unable to reach a verdict in Argo Group’s lawsuit against rival insurer Dual North America over the mass exodus of 27 Argo employees to Dual in 2023. A judge declared a mistrial and ordered the parties back to mediation. Shown is the Lady Justice statue atop a fountain in front of the Bexar County Courthouse.
Billy Calzada/Express-News
Argo Group has operations at 711 Broadway in San Antonio. The specialty insurer had sued rival Dual North America over the defection of 27 Argo employees to Dual in 2023.
Patrick Danner/Staff photo
Argo Group was acquired by Brookfield Reinsurance for $1.1 billion in late 2023.
Patrick Danner/Staff photo
A jury in San Antonio deadlocked after more than 10 hours of deliberations over two days in Argo Group’s $900 million lawsuit accusing a rival insurer and two former executives of raiding its surety business.
State District Judge Angelica Jimenez granted Argo’s unopposed motion for a mistrial Wednesday after jurors said they couldn’t reach a verdict. She ordered Argo and Dual North America Inc. back to mediation with attorney Bill Ford.
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The deadlock came after a 3½-week trial in which Argo Group International Holdings Inc. and two related companies sought $907 million in damages, including punitive damages. Argo accused Dual and former Argo executives Mark Farina and Brendan Keating of orchestrating the April 2023 departure of 27 employees from Argo’s surety business. Farina, of New Jersey, and Keating, of Illinois, were among those who left. The defendants denied the allegations.
Dallas attorney Trey Cox, who represents Argo, asked jurors to award his client $293.8 million for lost profits, $286.3 million for the lost value of its surety business, $9.5 million in expenses and $1.3 million in Farina’s and Keating’s salaries. Argo also sought $316.3 million in punitive damages.
It was unclear whether the case would go back to trial if mediation fails. Cox declined to comment, and an Argo spokesman did not respond to a request for comment.
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San Antonio lawyer Ricardo Cedillo, who represents Dual, said the company is prepared to go to trial again if necessary.
“We’re at the end of an effort that took close to four years where (Argo’s) objective was to walk away with nearly a billion dollars in damages and exemplary damages. They walk away with nothing,” Cedillo said. “Their case has no merit.”
Cedillo said Dual’s representatives later polled the jurors and found them split 6-6 on liability. Eleven of the 12 jurors, he said, favored awarding Argo no damages.
“Argo had its day in court and could not convince this jury,” said San Antonio attorney Steve Chiscano, who represents Farina and Keating.
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Argo sale
At the time of the mass departures, Argo was a Bermuda-based publicly traded specialty insurer with a significant San Antonio presence. Bermuda-based Brookfield Reinsurance had agreed two months earlier to acquire the company for $1.1 billion. The deal closed in November 2023, taking Argo off the New York Stock Exchange.
Argo’s surety business was a major operation, generating about $200 million in annual gross written premiums before the mass departure. In 2024, Argo sold a majority of the business to Applied Surety Underwriters.
San Diego-based Dual North America is part of Howden Group Holdings of London. Argo accused Dual of using the departing employees, including Farina and Keating, to build a competing surety operation.
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Argo accused Dual and former executives Farina and Keating of spending months planning an effort to build Dual’s surety business by recruiting nearly the entire Argo Surety underwriting team.
According to the latest version of the complaint, Farina and Keating began working with Dual in 2022 on business plans for a new surety operation, while still employed by Argo, and helped identify and recruit Argo employees.
READ MORE: Argo Group was based in San Antonio before moving to Bermuda. Now it’s set to sell for $1.1 billion.
Argo also accused the defendants of taking and using confidential information, including information about its employees, brokers, customers and business operations, to help Dual establish its surety business. The lawsuit said the timing of the departures hurt Argo’s negotiations with reinsurers and ultimately forced it to transfer about 80% of its surety bond portfolio to Applied, with the remaining business placed in runoff.
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Dual generally denied Argo’s allegations and said its actions were justified and taken for legitimate business reasons. It said it had no contractual or legal duty preventing it from hiring Argo’s at-will employees, and that the employees themselves decided to leave Argo and seek new jobs. Dual also denied taking or using Argo’s confidential information and argued that any information retained by the former employees consisted of their own skills and knowledge.
In their answers, Farina and Keating said any information they retained was not Argo’s confidential information and challenged the enforceability of Argo’s employee and customer nonsolicitation agreements as overly broad and unreasonable. They added that their decision to leave was prompted by problems at Argo, including management turnover, the departure of other experienced employees, a downgrade in Argo’s rating and the potential sale of the business.
Closing arguments
The hung jury came after lawyers for both sides spent a combined three hours late Monday afternoon making sharply different closing arguments about the mass exodus.
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Cox, Argo’s lawyer, told jurors that when Argo lost its team, it could no longer get “any more paper.” In the insurance industry, “paper” generally refers to the insurer providing the backing for an insurance product. Dual officials knew their actions would “paralyze” Argo’s surety unit, he said.
He also accused Keating of plagiarizing 18 passages from Argo’s business plan and said the defendants hid their communications via personal emails with subject lines like “Irish soda bread recipe” and “Project 007.”
Cox asked jurors to hold the defendants accountable.
“Hold them accountable because they were on our payroll, they shared our business plans, they identified all of our people, they worked for 11 months with Dual to get this entire group out of Argo and into Dual,” Cox said. “They gave them this business on a silver platter. And that’s wrong. It’s breach of their contract and it’s a breach of their fiduciary duties, and they were unjustly enriched as a result of their wrongful, hidden and conspiratorial actions.”
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Chiscano, attorney for Farina and Keating, called them “honorable men” with “unblemished” careers.
“A hedge fund is trying to destroy them, trying to punish them, trying to teach them a lesson,” Chiscano said, referring to Brookfield. “A lesson of what? A lesson of what all hedge funds do. ‘We need a return of investment for our shareholders. We’re looking for a return on our investment. We bought Argo for $1.1 billion. But that wasn’t a good enough return on our investment.’”
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Cedillo, Dual’s lawyer, noted that the 27 employees left Argo after Brookfield’s purchase was announced but before it closed. Yet the purchase price of $1.1 billion, or $30 a share, was never adjusted, he said.
“I told you that the damage number on the verdict form that I was going to ask you to write in was a big fat zero,” Cedillo said to jurors. “And I’m here to tell you that again because that is the right thing to do in this case.”