By Kristen Kidd
New York Life Insurance Company sold policies to thousands of Armenians in the Ottoman Empire during the 20 years leading up to the Genocide. In 1917 the company paid off a portion of those policies to surviving heirs, but thousands of others were not. Instead they were sealed in a company vault for the next 85 years, word of their existence kept quiet.
Just before the turn of this century, the company was named in a lawsuit filed in Los Angeles Federal Court. Within six months, New York Life offered a $10 million settlement agreement. The plaintiffs turned it down. Then the company moved for dismissal of the case, but a judge denied the motion. Now New York Life (building pictured on this spread) must do the right thing by the families of those massacred policyholders, and to those who left no heirs at all.
“My family has been trying to collect on a policy for almost 70 years,” exclaims Martin Marootian, the lead plaintiff in this first-of-its-kind class action lawsuit. “But it’s more than just the money,” the 86-year-old Marootian insists He says he is most concerned with the recognition factor the suit could bring. “One and a half million Armenians were massacred and no one seems to know about it. Maybe this will help change that,” Marootian says.
For lawyer Vartkes Yeghiayan, this lawsuit, modeled after Jewish Holocaust litigation, is both legally justified and historically significant. “For the first time the Armenian community has gone beyond lamentation to litigation.” Yeghiayan, an LA attorney who specializes in immigration law, filed the case in November 1999. He says he was inspired to take action after reading former US Ambassador Henry Morgenthau’s memoirs.
The Turkish government has denied Morgenthau’s account of an astonishing exchange with Talaat Pasha, architect of the Armenian Genocide. “They are practically all dead now and have left no heirs to collect the money. The government is the beneficiary,” Pasha suggested to Morgenthau. The Ambassador refused to provide information about American policies sold to Armenians. But his record of that discussion prompted Yeghiayan to search for such a list himself. His pursuit led him to Marootian.
The retired pharmacist who lives with his wife Seda in a comfortable hilly LA suburb, still holds the original policy a New York Life Insurance agent sold to his uncle in Kharpert. The oversized document is written in French, detailing a 3,000 franc contract signed in 1910. Setrak Cheytanian gave that policy to his sister, Marootian’s mother Yegsa, just before she moved to the US. Not long after, a genocidal campaign swept through Cheytanian’s village. He and the rest of his family were killed.
In 1923 Yegsa Marootian filed a claim on her dead brother’s policy. She was denied when she was unable to produce a death certificate. Yegsa died in 1982 never having collected a penny from New York Life. Now 20 years later, her son is hoping to finally see the company make good on its contract. On all of its remaining contracts.
One year ago, New York Life offered to pay 10 times the face value of each outstanding policy, plus a $3 million donation to various Armenian civic organizations. In an April 2001 press release, New York Life Insurance Company vice president William Werfelman said, “the agreement to resolve these outstanding policies is a reflection of New York Life’s 156-year history of integrity and humanity. We’re proud that New York Life has thousands of Armenian-Americans as policyholders today”.
The company was clearly interested in avoiding a bad public relations situation, damaging to its current business. Its $10 million settlement offer was initially accepted by Marootian’s attorneys. However, he felt the figure was far too low. Taking interest into account and adjusting for today’s dollar, the true value has been estimated to be as high as $3 billion. So they told the company it had to do better.
One sticking point in the negotiation process centers on a law that states that interest on insurance policies does not begin to accrue until a claim is made. “The vast majority of these policies were never claimed on. New York Life argues, and you can’t scoff at the argument, that they don’t owe any interest,” explains co-counsel Brian Kabateck of the LA law firm Quisenberry & Kabateck LLP. “But we’re saying wait a minute, there’s got to be a special circumstance for a genocide.”
That has been the approach in the Holocaust case. Co-counsel William Shernoff has been involved in some of that process and brings his experience to this lawsuit. “We are gratified that New York Life provided a list of policyholders upon which we were able to have meaningful discussions,” says Shernoff who notes there has been far less cooperation with Holocaust heirs. However, the attorneys representing Marootian and all who would be in his class do not fully accept the information they were given in the discovery process.
New York Life says a total of 2,186 policies with Armenian names remain in question. “That number is absolutely up for debate. We found about a 10 percent error factor in the names they provided versus some of the backup information we have,” Kabateck states.
“We have seen a list of nearly 8,000 names allegedly all sold in the Turkey region during that relevant time period. There are some names which don’t appear to be Armenian. The question is, did those people change their names to protect their identities, or were they truly Turkish names?” Kabateck wonders. “Also, our research has shown that Muslims generally did not buy life insurance for religious reasons.”
According to New York Life records, a total of 7,671 policies were sold in the Ottoman Empire between the years of 1895 and 1915. The policies were written in French and English, held in francs and pounds at the company’s branch offices in Paris and London. Some now question that method considering the policy holders and their beneficiaries would have been literate in neither language, nor likely able to travel to either of those cities to collect. Nonetheless, the policies obviously seemed like a good idea to thousands of Armenians at the time.
Because it was so long ago, New York Life lawyers attempted to have the Marootian lawsuit thrown out, arguing the statute of limitations had expired. California State Senator Chuck Poochigian (R-Fresno) scrambled to introduce legislation extending the deadline. The Legislature unanimously passed “the Armenian Genocide Victims Insurance Act” and in September 2000 Governor Gray Davis signed the new law. Now heirs of genocide victims anywhere in the world have until December 31, 2010 to sue insurers in California. The law pertains to unpaid policies purchased in Europe or Asia between 1875 and 1923.
Two of Marootian’s fellow plaintiffs live outside California, one in Massachusetts, the other in France. Many more are expected to join once a complete list of policy holders is published in AIM and other publications, including the internet. A judge will decide when it’s time to do so.
The deadline issue resolved, the court still had to role on a motion to dismiss for improper venue. New York Life policies included a socalled foram-selection clause that said legal proceedings over contracts sold in the Ottoman Empire had to be brought “in the London Courts” or “the civil Courts of France.” US District Judge Christina Snyder denied that motion, calling the clause fundamentally unfair.
“Of course the biggest factor working against us is time. Eighty seven years is a long time, and a lot of documents we could’ve used to dispute New York Life’s information have been lost or destroyed,” admits Kabateck. He asks that anyone with any documentation of a relative’s life insurance policy contact him or his co-counsels Vartkes Yeghiayan, William Shernoff and Mark Geragos.
The media savvy LA criminal defense attorney Mark Geragos was hired last year to head the legal team. “Geragos brings several things to the table,” comments the Armenian Assembly’s Western Region director Peter Abajian. “He’s hard edged and has a wellknown reputation for success. This thing needs that kind of sophistication.”
Marootian’s legal team is not only up against a multi-billion dollar corporation, but some pressure within the Armenian community itself to accept the next settlement offer. Last year attorney and former majority leader of the California State Assembly, Walter Karabian, was hired by New York Life to help convince the community to accept a settlement. He’s quoted as saying, “many people are unaware of how responsibly New York Life acted after the Genocide. The Armenian community is better for the company’s willingness to deal so forthrightly with the past.” Calls to Mr. Karabian were not returned by AIM’s deadline.
New York Life Insurance made clear it will continue to defend the suit. William Werfelman, vice president, told AIM: “The company believes the law and the facts are firmly on its side in this case. We regret that our efforts to settle the case have been unsuccessful, and that litigation is likely to go on for some time.”
Marootian could have pursued his case as a sole lawsuit but chose to join with others and help bring about a greater degree of recognition. “Marootian will be long remembered as a pioneer regardless of how it tums out,” predicts Ross Vartian, spokesman for the Armenian National Institute in Washington, DC. “This gentleman stepped up and basically wanted to bring some closure to this issue.” Vartian says it is also a good thing Marootian decided to turn down the settlement offer from New York Life. That legal exchange provided evidence needed in another important investigation into company business practices.
ANI researchers have uncovered evidence that New York Life Insurance Company may have violated a New York State abandoned property law. Now the State Comptroller’s Office is auditing New York Life to determine whether it gained so-called “unlawful enrichment” at the expense of genocide victims.
The law states that unclaimed or unpaid life insurance funds shall be deemed abandoned property after three to seven years. Companies must make a verified written report to the State Comptroller and turn over the money. “It is interesting that when the New York legislature passed that bill, it was New York Life that sought a judgment to declare the law unconstitutional,” notes ANI Legal Affairs Director Jacob Toumayan. The abandoned property laws require companies to pay 10 percent interest per year on funds unlawfully held. There are also penalties of $100 per day as long as written reports are not supplied.
New York Life is now on record through legal proceedings in the Marootian case, admitting it never paid thousands of policies sold in the Ottoman Empire. ANI reports finding a letter written by the company’s former Vice President TA. Buckner to then US Secretary of State Robert Lansing in 1922 stating that Armenians in Turkey were “prematurely terminated by such violent death…subjected to massacre and illegal killing and fatal exposure by or with the acquiescence of the Turkish authorities”.
Buckner asked the State Department to make provisions to recover company losses, declaring that “the Turkish government is and should be held responsible” for the deaths of their Armenian policyholders. This correspondence not only shows the company’s awareness of the deaths, but also backs Morgenthau’s account of events.
ANI continues to investigate the practices of this and other life insurance companies and banks operating in the Ottoman Empire prior to the Genocide. “Not only are we researching to support the Marootian case, but also finding tremendous material to reject the denials. Anytime there is legal or political closure it certainly helps because obviously we’re dealing with a nation-state that is in adamant denial,” states Vartian.
ANI Board of Governors Chairman Robert Kaloosdian says ANI investigations should have a positive impact on the Marootian lawsuit. “We have the best interest of the plaintiffs in mind and we hope that New York Life will do the right thing and resolve the matter in a fair and equitable manner.”