A California traveler sued two Florida travel agencies, several travel insurers and the technology company Revelex, charging either negligence or outright fraud in selling bogus travel insurance policies.
The class action, filed in Superior Court in Los Angeles County, aims to represent "at least 10,000" Californians who, in the last four years, paid $200 to $400 for phony travel insurance, court papers said.
The plaintiff, Edwin Trebbe, seeks refunds of all premiums, full recovery on unpaid insurance claims plus unspecified punitive damages. Based on the estimated class size, that could be $2 million to $4 million just for premiums.
Besides Revelex, the defendants are Smolinski & Associates of Boca Raton (doing business as Palm Coast Travel) and its principals, Lee and Anne Smolinski; Vacation Superstore of Port St. Lucie (doing business as Best Price Cruises) and its principals, Ron and Sandra Russo; Trip Assured and its president, Edward Johnson; Jerry Watson, the president, and other individuals associated with Prime Travel Protection, Traveler Protection Services and Vacation Protection Services; and a handful of mostly unlicensed underwriters.
The plaintiff’s attorney, Mark Didak, said he expects to add more plaintiffs and travel agency defendants "very soon." He also is looking at adding credit card companies as defendants, if it appears they knowingly enabled the unlicensed insurance companies to operate by allowing them to be credit card merchants.
The class action is the latest chapter in a slow-motion saga that dates from 2005, when several states, including Florida and Colorado, took action against Tennessee-based Trip Assured, now defunct, for selling insurance without a license.
Jerry Watson, a former Trip Assured employee (and former Vacation.com staffer), then created a succession of travel insurance businesses and began selling Prime Travel Protection products through the Revelex Power Agent portal used by many agencies. Prime Travel Protection shut down in 2009.
Meanwhile, Florida, beginning early last year, issued cease-and-desist orders against several travel agencies for selling unlicensed insurance products and requiring them to make good to clients with unpaid claims.
Laura Anstead, a managing attorney in Florida’s Department of Financial Services, confirmed that Watson is the subject of a criminal investigation.
Lee Smolinski said Trebbe’s claims against the Smolinski businesses are "without merit."
Ron Russo declined to comment on the Trebbe litigation but said Best Price Cruises will pay all client claims deemed valid by the Florida department’s "claims experts."
Trebbe was one of those clients, and according to Anstead, Best Price Cruises has agreed to pay Trebbe 50% of his trip cost ($2,199), an amount was set by the department’s claims adjusters, she said. The state is forcing payment on valid claims but not adjudicating pleas for premium refunds, she added.
Revelex CEO David Goodis said the plaintiffs are "casting a wide net."
"There is no case there," he said. "If Hilton doesn’t give you your room, is that our fault?"
Without admitting wrongdoing, Revelex signed a Florida consent order this month agreeing not to allow unlicensed insurers to sell in its system, not to take commissions from any insurance seller and to reconfirm annually that insurers in the Revelex system are properly licensed in Florida.
It also must advise its agency customers if selling insurance "in or from Florida" that they must hold a Florida license as a travel insurance agency. Revelex paid $12,500 in "investigative costs."
This report appeared in the Oct. 25 issue of Travel Weekly.