problems and a misunderstanding as to the length of the "drag"6 that U.S. Life
had extended to several of the police units. In the original agreement
between U.S. Life and the MPC, U.S. Life granted several of the police units a
3-month drag.
In an October 15, 1986, letter to Mr. Burke, Mr. Curcuru summarized the
matters that were discussed at an October 9, 1986, meeting, including an MPC
premium reconciliation presented by Mr. Burke that showed $681,079 due and
unpaid to U.S. Life through October 31, 1986. At this meeting, Mr. Burke
agreed to pay the amount owed by October 31, 1986, but he failed to do so. On
December 15, 1986, Mr. Curcuru again wrote to Mr. Burke to demand payment in
the amount of $843,670 by December 22, 1986, for unpaid MPC premiums owing
from Mr. Burke through December 31, 1986. The letter further stated that if
full payment were not received by December 22, 1986, U.S. Life would commence
legal action to collect the unpaid premiums.
On December 24, 1986, Mr. Burke wrote to Mr. Curcuru concerning a
December 2, 1986, meeting at which Mr. Burke was asked to prepare a payment
schedule that would bring the MPC account current. In his letter, Mr. Burke
informed Mr. Curcuru that the account "shall be brought current by April 30,
1987 with a major portion * * * being * * * [supplied] some time in January."
Mr. Burke and Mr. Curcuru met again on or about December 30, 1986. At this
meeting, Mr. Burke falsely claimed that he had negotiated a 6-month drag with
the MPC, and he then proposed a repayment schedule, which he failed to meet.
On March 12, 1987, U.S. Life filed a Motion for Summary Judgment in Lieu
of Complaint with the New York Supreme Court (County of New York) against Mr.
Burke and John J. Burke & Associates. At that time, the total premiums due
U.S. Life from the MPC insurance account was $1,029,096.07. On June 18, 1987,
U.S. Life obtained a default judgment in the amount of $1,029,096.07, together
with interest and costs of $28,300.17 and $117, respectively.
6A "drag" is a grace period given by an insurance company when it permits
an insured to pay premiums after the specified due date.
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