Judge upholds ruling against surety executive

December 14, 1991|By Ross Hetrick

A judge has upheld a fine and an order for restitution against Dean A. Manson, a former officer of a defunct Silver Spring surety company that was charged with operating without the proper state licenses.

The order, issued earlier this week by Baltimore Circuit Judge David Ross, affirms a May administrative decision by Insurance Commissioner John A. Donaho, who fined Mr. Manson, Stephen R. Woods and United Capital Exchange $231,500 and ordered them to pay $14,000 to three subcontractors for damages.

The fine included $230,000 for engaging in the unauthorized business of insurance and $1,500 for failure to honor valid claims.

Mr. Donaho's decision upheld a recommended order by Administrative Law Judge Thomas G. Welshko, who heard the case last October and November. The company and the officers did not hold a state certificate of authority to act as an insurer or a certificate of qualification to act as insurance agents or brokers, the Insurance Division said.

Mr. Manson was executive vice president of the United Capital, andMr. Woods was president. Mr. Manson was the only defendant to appeal Mr. Donaho's order.

A surety company sells bonds to construction companies to ensure subcontractors that work for that company will be paid for even if thecontractor defaults. Surety bonds are normally required as a condition to work on many large projects.

Edward J. Birrane Jr., Mr. Manson's attorney, said his client has not decided whether to appeal Judge Ross' decision to the Court of SpecialAppeals. "My recommendation is that we appeal," he said. "I think there is a lot there to be reviewed."

Mr. Birrane had argued that Mr. Manson was only an employee of the company and that he did not personally issue any surety bonds.

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