A dispute between the Washington Nationals baseball club and its insurance company, rooted in fraud claims over a prospect's actual identity and age, was moved this week to the city's federal district court.
The Nationals originally sued Westchester Fire Insurance Co. in May in District of Columbia Superior Court, accusing the company of wrongfully denying a request for coverage after the team said a new recruit duped the club about his actual age. Yesterday, Westchester removed the case to U.S. District Court for the District of Columbia.
Williams & Connolly is going to bat for the Nationals. Partner Dane Butswinkas could not immediately be reached for comment and associate Liam Montgomery declined to comment. A team spokeswoman also wasn't available. The Nationals' general counsel, Damon Jones, was an associate at Williams & Connolly before joining the ball club.
Drinker Biddle & Reath associate Brianna Silverstein is representing Westchester. She was not immediately available for comment.
According to the complaint, the Nationals' policy with Westchester included $1 million of commercial crime insurance coverage, which was meant to protect the club "against employee dishonesty, theft, and fraud."
In 2006, the Nationals signed a minor league contract with a player the team believed was 16 years old, giving him a salary and a $1.4 million signing bonus. The club learned later, however, that the player, Carlos Alvarez Lugo, was 20 years old, which lessened his value.
"[A] player with Lugo's talent level at age 16 is worth considerably more in the market for baseball prospects than is a player with Lugo's talent level at Lugo's actual age of 20," the team said in its complaint.
The club fired two employees accused of defrauding the club into hiring Lugo. According to the complaint, officials reported the incident as employee dishonesty to Westchester and submitted a package detailing the losses it wanted reimbursed under its insurance policy.
The team accused Westchester of delaying in responding and then making unnecessary and "burdensome" requests for more information. The insurance company eventually denied the team coverage.
The team sued Westchester in District of Columbia Superior Court in May. Westchester removed the case to federal court, arguing the amount of money at issue exceeded $75,000—one of the grounds for federal diversity jurisdiction—and the parties were located in different places, another standard for diversity jurisdiction.
The case is before U.S. District Judge Reggie Walton. No hearings have been scheduled.