The City of Troy, New York, "Where Henry Hudson Turned Around."

Thursday, March 31, 2005


R.J. Carignan & Company, a Troy insurance agency, has sued Mayor Harry Tutunjian and the City of Troy. The case has received little attention in the mainstream media. Why? That is hard to say. One reason may be that if the facts as alleged by Carignan are true, it does not paint a pretty picture of Troy's elected officials.

What's the case about? Yesterday I took a stroll to the courthouse and got a copy of the complaint.


Carignan has insured the city since the 1930's. During Troy's fiscal crisis of the 1990's, the city carried only fire insurance on real property owned by the city. When Mayor Pattison began to pull the city out of its financial crisis, the city sought to obtain insurance against catastrophic loss. Other, larger agencies were approached by the city but none would take the risk. Carignan once again stepped to the plate and went to bat for Troy.

Troy paid the bulk of its premiums to a Long Island insurance wholesaler who worked with Carignan to obtain low premiums. When Carignan had Troy's insurance up and running, the city put the procurement of its insurance out to bid annually. Each year Carignan responded with the lowest bid.

In 2004, Matt Petro, Carignan's owner, worked to reduce Troy's premiums for 2005. Petro plowed through open and unresolved claims. Petro was able to reevaluate the level of reserves and estimate of liability in consultation with Corporation Counsel's Office. Mr. Petro was able to reduce the number of open claims against the city by nearly two-thirds.

On November 4, 2004 Troy sent a Request for Quotations for liability insurance. Petro spent hours analyzing Troy's needs and ways in which premiums could be reduced. Prior to submitting their quote, Carignan learned that a Scotia agency had made inquiries about changing the city's Broker of Record. Petro asked the city whether they intended on changing brokers. The city, before December 9 (the date the 'bids' were to be received) gave no indication of any intent to change brokers. Therefore, Petro sent his bid to the city.

Due to Carignan's hard work and time, the quotes for insurance coverage reduced the city's premiums by between $51,000 and $65,000. This was the only quote received by Troy.

The city then took Carignan's work product and made a Scotia agency the Broker of Record. Then, concerned about the perception of taking the business out of Troy, the Scotia agency agreed to split the Carignan commission with Nicoll & MacChesney. Essentially, the Broker of Record letter denied Carignan the broker fee they had earned.

Then, Tutunjian trots out before the press and announces he had saved the city money by changing brokers.

There's more involved, of course, but those are the basic allegations. If you think it smells, you'd be right.


I don't know what all that means but it doesn't sound good. We'll leave the details to the lawyers and jury.

Let us proceed upon the belief that Carignan's allegations are true. First, I do not know if the city and Tutunjian can be sued for what they did. It may be that their actions are not...well...actionable. Maybe the city can act in a sleazy manner without any recourse for Carignan. We'll leave that, like we said, to the judge and jury.

Still, lets try an analogy. Like most analogies it isn't perfect, but we'll try.

Suppose you own a vehicle repair shop. A potential customer brings in his car. It's an old, unique automobile and parts will be hard to come by. You get on the phone and hours later you have tracked down the hard to find parts. You negotiate with those suppliers and are able to get the customer a good deal. The customer is happy and wants to know where you found the hard to find parts. You, being an honest, ethical man, tell the customer where you found the parts. You then give the customer an estimate and you know it's a good deal.

The customer thanks you and drives to another vehicle repair shop, supplies the owner with the information and soon the car is repaired. Then, the customer tells others that "I got to the point where it was clear that auto shops needed to be changed, particularly when the available savings became clear."

As the repair shop owner that originally located the parts and secured the deal, how would you feel? Cheated? Wronged? We would hope so. When you spoke to friends and explained the story, how would you characterize the customer? We thought so.

Now suppose you consulted a lawyer. The lawyer informs you that as mad as you are, the customer was within his rights to do what he did.

It may be that the facts as alleged by Carignan are wrong or there is more to the picture. It may be that Carignan is correct and will recover damages for the wrong. It may be that Carignan is correct, but there is no legal recourse for what was done by the city.

It's the last potentiality we want to discuss. Suppose Carignan is correct in all the facts but the city's actions are simply not actionable at law? What could one say about city officials who would do such a thing (steal a man's work to hand off to another)?

It is difficult to describe the slime that such public officials ooze if Carignan is correct. Stealing a man's work and giving it to another evidences serious character flaws. Who could trust these officials? Who would take the chance? Unlimited power always breeds arrogance, but it doesn't always breed such craven behavior. The people of Troy should hope the Carignan allegations prove false. If the allegations are true, then the Mayor will have lied to his constituents. If he knowingly lied, the Mayor should be removed from office. If he relied upon the advice of others, those people must be removed from office. It's that simple.

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