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Juan Montalvo, Chemairspray, Inc: A successful 17 year battle against wealth, "Big Sugar" and the Insurance Industry

Juan Montalvo was a 25 year old lawyer in Havana, Cuba in 1960 when Castro came to power. Juan was married with three children and a fourth on the way. He came to Florida to flee oppression with no skill or talent other than a law degree from the University of Havana and his ability to drive and repair race cars. He worked in West Palm Beach as an auto mechanic until he was approached in 1962 by Alfonso Fanjul, Sr., the baron of the Fanjul sugar dynasty, who had Juan take over a small agricultural chemical company which was floundering and unprofitable. 

After auditing classes in chemistry, Juan Montalvo turned the company around and generated over a million dollar profit in his first year of operation. His efforts were ignored and unrewarded and he subsequently left the Fanjul employ and started Chemspray. Within a few short years, he was the most successful agricultural formulator in the Glades. The Fanjul chemical company went out of business but the Fanjul’s never forgave Juan for his actions. 

In the 1970’s Juan Montalvo started a second company called Chemairspray. Soon he was flying six crop dusting planes throughout Florida. He leased a 10 acre airstrip from the Hatton Brothers. In the early 1980’s the Fanjul dynasty through one of its corporations, New Farm, Inc., purchased the Hatton Brothers Farm with a $21,000,000 loan (100% of the purchase price) from the U.S. Department of Agriculture with an interest rate of 1% (it is true the rich get richer and are favored by the government).  As a condition of the purchase, New Farm insisted that the Hatton Brothers could not carve out the airstrip and sell it to Montalvo even though it had been their plan for years.

As soon as New Farm took position of the property, it informed Montalvo that Chemairspray’s lease would not be renewed. In 1983 the lease expired and New Farm immediately contacted the Federal and State Departments of Environmental Protection feigning ignorance as to whether the property contained agricultural chemical contamination.

In approximately 1983 Juan asked Ed Ricci to be his lawyer and a 17 year odyssey of legal battling began between this individual and the most powerful “big sugar” barons in America. From 1983 through 1985, the action against Montalvo languished in an administrative proceeding. Ed monitored the action free of charge for Juan during this time. In June of 1985, however, New Farm was successful in getting the Florida Department of Environmental Regulation to file suit against Montalvo in state court in West Palm Beach. They not only sued his agricultural spraying corporation but his formulating company and Juan individually. Their plan was “to destroy him.” It was in June of 1985 that Ed agreed to represent Montalvo and his companies on a pure contingency that would be court awarded fees if  he was successful in establishing coverage in the pending litigation. Within months of the lawsuit being filed against him, Montalvo suffered a massive heart attack and subsequently underwent angioplasty and a year later emergency bypass surgery.  Fortunately, he survived.

It was Ed Ricci’s belief that under his general liability policies Montalvo had insurance coverage for pollution spills that should provide an adequate resource and a defense. He then joined into the litigation Juan’s insurance companies: Florida Farm Bureau, Hudson, Protective National and U.S. Fire and also joined the 28 farms with whom Juan contracted to spray.

In early 1986 Ricci won a dismissal of all claims against Montalvo and New Farm, (the alleged co-defendant but really the instigator of the litigation.) Only New Farm objected to having the lawsuit dismissed (and supported the state in an appeal to have the action reinstated.) In 1988 while the Appeal was pending in the Fourth DCA, New Farm, was able to get the South Florida Water Management District to join it in bringing a direct CERCLA action against Montalvo in Federal Court in the Southern District of Florida. In that action, Ed also represented Montalvo without accepting any fee other than one he might obtain from insurance carriers, if Ricci established coverage. At the insistence of New Farm the trial was bifurcated.

Ed Ricci tried the liability case in December 1989 and in February 1990 obtained vindication of Montalvo when the Federal Court found “It appears that New Farm’s decision may have been driven more by family rivalry than by any business judgment.”  But he still had no coverage.

Despite the earlier contentions of New Farm that an imminent disaster faced Florida if the case was not concluded promptly, as soon as the liability issue found New Farm jointly and severally liable, the case came to a screeching halt and to this day has never been reactivated. While the Federal case was pending, the Fourth DCA reinstated the state court action and in1989 Ed again began to represent Montalvo on the substantive claims against him and his companies as well as prosecuting his insurance coverage’s. 

Unfortunately, in 1993 the Florida Supreme Court in the case of  Dimmit Chevrolet v. Southeastern Fidelity Ins. 636 So.2d 700 (Fla. 1993), for the first time in its history on a petition for reconsideration, and without oral argument relied on a supplemental attachment not part of the record and ruled that all pollution exclusions clauses in Florida were absolute and provided no coverage even when a spill was sudden and accidental (sudden and accidental being the exception to the exclusion,) if the sudden and accidental event occurred during the regular course of business. This 4 to 3 decision is to this day an outrage. The New Jersey Supreme Court in an identical case found unanimously that the American insurance industry had hoodwinked State Insurance Commissioners and, in fact, lied about the meaning of the exception language in the exclusion clause. Nevertheless, Florida has never allowed coverage to small time operators such as Montalvo. After the Dimmitt decision, the general liability carriers, Florida Farm Bureau, Hudson and Protective National, all won summary judgments on coverage.

Ed appealed to the Fourth DCA where all the summary judgments were affirmed. He sought cert to the Florida Supreme Court; it was denied. 

Finally, there was only one insurance carrier left: U.S. Fire Insurance Company who insured Juan’s planes. Ed sought coverage for “in ground” pollution at the airstrip from spillage resulting from loading and unloading agricultural chemicals into crop dusting planes. No one had ever sought such coverage before. The case went to trial and in 1996, in a detailed opinion, the trial court found coverage for all in ground pollution in favor of Montalvo and Chemairspray. This was the first coverage decision in America to find coverage for “in ground” pollution in an aircraft policy. Finally, during the pendency of the appeal, U. S. Fire negotiated a clean up plan and Montalvo and his company were reimbursed all out of pocket expenses and the Ricci law firm was awarded attorneys fees (under a confidentiality agreement requested by U.S. Fire.)

It took 17 years of work without compensation to secure the rights of an individual and his small business against the wealth, power and might of the insurance industry and the most powerful sugar barons in America.  The irony of this saga is that the alleged offending chemicals which have a very short half life were non toxic agricultural chemicals that are sprayed on the sugar cane and corn we eat.If left alone, they oxidize harmlessly into the air. New Farm’s efforts to destroy Montalvo and his companies through the use of the court system failed. It is estimated New Farms spent over seven million dollars to pursue its spite suit.

The moral of this story is that good lawyers representing honest clients are sometimes cast in the role of David versus Goliath, but through hard work and unrelenting dedication they can obtain justice. The system does work, but it requires a rare breed of lawyer who is willing to fight against all odds to achieve justice and success for his client.

Click here to find out more about Attorney Edward M. Ricci.

Doug Sharon: Heart patient receives life saving surgery

Reasoning with, moreover receiving benefits from a managed care company as many Americans know can be frustrating, time consuming and costly.  A Theodore J. Leopold who specializes in managed care related issues has successfully represented a number of individuals and families that have been abused and adversely impacted by managed health care companies.

In May, Mr. Leopold was contacted by a gentleman who had a rare heart disease requiring a specialized surgery. The gentleman lives in South Florida, however, only one surgeon does the procedure and he practices in the western United States. The gentleman’s insurance carrier/managed care company refused to pay for the doctor or surgery because it was “out of network.” Faced with the refusal from the managed care company and insufficient resources to pay for the procedure himself, the clock was ticking on his life.

“I was concerned and angry that this company was refusing treatment to this gentleman,” said Leopold. Adding, “it is the typical catch 22, which is so often used by managed care companies to deny treatment and life saving care. There simply was no doctor in their network comfortable or capable of performing this surgery.” Realizing that he had litigated against this particular company before, Leopold told the man, “I want to help, don’t worry about paying me, let’s just get you the treatment you need and get you back on your feet.” After numerous calls, letters and long hours of negotiating, the managed care company agreed to pay for the entire procedure, allow the injured to travel out west and be treated by the leading surgeon in the country. Additionally, Leopold was able to get the company to pay the man an undisclosed settlement for his time, aggravation, worry and distress over their initial refusal of care.

“I took no fee for the matter, however, the personal and professional satisfaction in playing a role that helped this gentleman regain his life is impossible to completely articulate,” said Leopold. “I am a strong supporter of the ‘Dignity in Law’ campaign that the Bar has established. But most importantly, I feel a personal and professional responsibility to help individuals and families where so much is at stake.”

Click here to find out more about Attorney Theodore J. Leopold.