SUNZ Insurance has learned about a certain published article and press release recently issued by Cal-Sara and Butler America Holdings, LLC, companies that, along with various affiliates, are parties to a number of previously filed lawsuits by SUNZ. These publications are a tactically unsound strategy that SUNZ will address through the Court and other proper channels. Indeed, Cal-Sara and Butler sued SUNZ in California as a litigation tactic to distract from two actions filed by SUNZ in Florida to collect amounts due from the Butler entities on a promissory note they executed and to collect unpaid premiums due on the large deductible workers’ compensation policies issued to Butler.
SUNZ is both surprised and disappointed the Staffing Industry Analysts (“SIA”) chose to publish its article without giving SUNZ an opportunity to comment or respond, especially where the statements are demonstrably false on their face. But, we want to provide the reader with context and background to understand what was written, why it was written, and the parties involved. If you have any questions or concerns after reading this letter, please contact us directly.
As an initial matter, please understand that SUNZ Insurance is in good standing in every state in which it conducts business. Its business model, policies, endorsements, program agreements, and processes have been reviewed, vetted, audited, examined, and re-examined by various states including the Florida Office of Insurance Regulation, its domicile regulator. SUNZ also uses an independent auditing firm to review all financial information and reports. In all regards and without reservation, SUNZ Insurance and its affiliates are in good standing and compliant in all aspects in all states.
In addition, SUNZ Insurance partners with state regulatory fraud investigators across the country to identify, investigate, report, and prosecute insurance fraud. This fraud includes under-reporting payroll, misclassifying workers, self-adjusting claims, and blocking injured workers from getting the care and treatment they require. SUNZ takes its role working with state regulatory agencies seriously and, in all regards, works to enforce and prevent insurance fraud. This is the backdrop to understanding the lawsuits brought by SUNZ in Florida.
The defendants in the Florida lawsuits (Partners Personnel, Butler America Holdings, Kenton Group, Essex Consulting Group, Partners Personnel Management Services, Butler America Telecom, Butler America IT, Partners Personnel Commerce, Butler America, Nexem Staffing and Nexem Allied: All companies owned, operated, or under the control of D. Stephen Sorensen, referred to as “Sorensen Entities”) owe SUNZ millions of dollars arising from unpaid premium, collateral, deductible reimbursement claim payments, refusal to permit policy audits and other related breaches of the national large deductible workers’ compensation program SUNZ designed and put in place for Sorensen Entities. A secondary entity, Cal-Sara, purports to be a non-profit advocacy group yet it is nothing more than Michael D. DiManno’s latest business venture: More on him below and his business activities.
SUNZ filed separate suits in Florida State Court in and for Manatee County against the Sorensen Entities. The court files for these multiple lawsuits can be accessed at the links below:
- Sunz v. Butler America, et al., Case No. 2019-CA-2299, filed May 19, 2019, pending in Manatee County, Florida https://records.manateeclerk.com/CourtRecords/Search/CaseNumber?caseNumber=2019-CA-2299&page=1&pageSize=25&myCases=False
- Sunz v. Butler America, et al., Case No. 2019-CA-4558, filed Oct. 4, 2019, pending in Manatee, County, Florida. https://records.manateeclerk.com/CourtRecords/Search/CaseNumber?caseNumber=2019-CA-4558&page=1&pageSize=25&myCases=False
- Sunz v. Nexem Allied, et al., Case No. 2019-CA-5298, filed Nov. 22, 2019, pending in Manatee, County, Florida https://records.manateeclerk.com/CourtRecords/Search/CaseNumber?caseNumber=2019-CA-5298&page=1&pageSize=25&myCases=False
SUNZ invites you to read the filings made by both parties in the above-cited litigation. Please also review the Court’s orders granting SUNZ’s various motions. We believe the court record is the clearest and most objectively transparent description of this matter. In particular, in December 2020, the Court entered an Order dismissing all of Nexem’s counterclaims with prejudice. Because the claims raised by the other defendants are nearly identical in all material respects, SUNZ anticipates a similar order will follow shortly in the other cases.
As stated by the parties in their pleadings and court filings, the Sorensen Entities requested and obtained a large deductible workers’ compensation policy. Based on their promise to pay premium, pay collateral, comply with certain policy terms and reimburse claim expenses in their deductible layer, SUNZ agreed to provide the requested insurance:
- In Buter/Partner Personnel’s case, the Sorensen Entities agreed to a $250,000 deductible that resulted in a premium discount of approximately 50%, or over $3 million of premium discounts.
- In the case of Nexem, the Sorensen Entities obtained a $500,000 large deductible that provided a corresponding premium credit of nearly 80%: The total premium discount was over $13 million.
After multiple policy years and policy renewals, the Sorensen Entities stopped making premium payments and collateral payments. The Sorensen Entities have also completely abandoned their injured employees by refusing to reimburse for claim payments made for the care, treatment, and indemnity required by their employees. Indeed, there is no greater insight to understanding the Sorensen Entities than the abandonment of their injured employees.
Although their injured workers continue to seek payments for claim expenses, the Sorensen Entities refuse to reimburse SUNZ for anything towards these claims. Rather than rescind the policies and leave the injured workers without coverage or benefits (something SUNZ was within its right to do), SUNZ chose instead to take care of the injured workers. This is in stark contrast to what the Sorensen Entities are doing.
SUNZ Insurance is paying 100% of all claim expenses, without reimbursement from the Sorensen Entities. SUNZ Insurance will pursue its rights and prevail against the Sorensen Entities to compel the Sorensen Entities to fulfill their legal obligations. But lawsuits take time. All the while, SUNZ Insurance is making sure the injured employees are taken care of by continuing to pay all valid claims, even though the Sorensen Entities refuse to reimburse their share of the amounts due for these claims.
In addition to reviewing the public litigation files SUNZ filed against the Sorensen Entities, we also invite you to research D. Stephen Sorensen’s extensive litigation history. Of the many lawsuits brought against him, one of particular interest is the federal RICO (racketeering) case filed by the State Compensation Fund of the State of California (“SCIF”). SCIF filed the case in the U.S. District Court for the Central District of California, Case No. CV 11-9233-MMM.
Based upon the pleadings and other documents in that case, SCIF identified Sorensen as having fraudulently transferred over eighty million dollars ($80,000,000) in addition to other actions. SCIF found Sorensen knowingly submitted false new client information, knowingly reported false reports of injury, and knowingly submitted false payroll data. In all, SCIF found Sorensen engaged in RICO activities to obtain workers’ compensation insurance. To quote SCIF:
As a result of the pattern of racketeering, [Defendants] grew to company of almost $2 billion of revenue, with operations almost nationwide in 45 states from its 2002 revenue of between $200 million and $325 million…. [T]he scheme is part of the RICO Defendants’ regular way of conducting business.
SCIF referred to the fraud as the “Sorensen Fraud Enterprise.” Again, to quote SCIF from their filed court documents: “The members of the Sorensen Fraud Enterprise submitted false information to [SCIF]… over a substantial period of time… and did so for the common purposes of obtaining the insurance without paying the proper premium.”
Sorensen’s litigation activities span a variety of different industries. Here is a news article summarizing a loan scheme that Sorensen perpetrated, the accuracy of which can be proven through the court files in the case:
There are more if you have the time and interest to research. When reviewing, we recommend you also take special note of Michael D. Dimanno, the founder of Cal-Sera. Dimanno and Sorensen have a long-standing professional relationship.
Dimanno is the founder and board member of Cal-Sara, a purported non-profit, formed only a few months ago in October 2020, whose alleged purpose, as taken directly from its web-site, is to “promote legal and regulatory compliance in the sale of workers’ compensation insurance and advocate for the common business interests of its members in recognizing and eliminating workers’ compensation fraud in the temporary staffing/staffing/recruiting industries.” This stated purpose is in stark contrast to Mr. Dimanno’s business behavior, enterprise, and activities.
Dimanno owned and operated a business named Onvoi Business Solutions. We invite you to research Onvoi Business Solutions. By doing so, an extensive history of workers compensation insurance fraud, penalties, tax liens, and other related behavior soon becomes evident.
Dimanno/Onvoi worked side-by-side with Sorensen’s company Select Personnel Services to execute a scheme regarding a workers’ compensation insurance program they had with the State Compensation Insurance Fund of the State of California (“State of California” or “SCIF”). The State of California, following an extensive investigation, identified that Dimanno/Onvoi and Sorensen/Select Personnel Services engaged in intentional acts of deception, concealment, and misrepresentation and, by doing so, Dimanno/Onvoi and Sorensen/Select Personnel Services illegally obtained tens of millions of dollars of lower insurance premium. The State of California brought suit against the two to recover the unpaid premium and other amounts.
Following a lengthy and bifurcated jury trial (one part of the trial was for damages and a second part of the trial was for punitive damages) the 12-member jury issued a verdict in the amount of $52,779,165 including $4,000,000 of punitive damages against Onvoi (Dimanno’s company) and Select Personnel Services (Sorensen’s company). The jury found that Onvoi and Select worked together in the commission of the fraud.
Notably, the jury made special findings about both Onvoi and Select:
- Onvoi and/or Select made false representations of important facts to the State Fund;
- Onvoi and/or Select knowingly made such false representations;
- Onvoi and/or Select intended to deceive the State Fund;
- Onvoi and/or Select intended the State Fund to rely on the false representations;
- Select gave substantial assistance or encouragement to Onvoi that was a substantial factor in causing harm to the State Fund; and
- Onvoi and Select agreed and intended, through their words and actions, to make false representations to and conceal important facts from the State Fund.
If you would like to review the jury’s findings for yourself, SUNZ can send a copy of the jury verdict and its special verdict form which contains these findings and many, many more.
In other words, the same people behind the purported non-profit Cal-Sara are the same people who were found to have defrauded the State of California State Compensation Insurance Fund (the largest insurance company in the State of California) of tens of millions of dollars of workers compensation insurance premium.
SUNZ is 100% focused and concerned with caring for its policyholders and their injured employees. In so doing, SUNZ is extremely diligent in meeting all its regulatory, corporate, financial and legal obligations.
SUNZ Insurance Company has over $120 million of statutory surplus as of year-end 2020. And, as of December 23, 2020, is proud to count an affiliate of The Blackstone Group as one of its significant shareholders. The Blackstone Group, a publicly traded financial group (NYSE: BX) manages over $580 billion firmwide including across private-equity, real estate and credit.
The Sorensen Entities, along with their insurance brokers at AJ Gallagher, sought out SUNZ to obtain a large deductible work comp policy. In exchange for their promise to pay claim expenses within their deductible layer, they received millions of dollars of premium discount. Now, using litigation tactics intended to avoid their payment obligations, the Sorensen Entities have abandoned their injured employees and refuse to make the required claim payments.
In the end, you do not have to take SUNZ’s word for any of this. Simply review the cited court filings, inquire with state regulatory agencies (including the Florida OIR), and speak with SUNZ’s clients. SUNZ is proud of nearly a 100% renewal rate among its clients and an impeccable relationship with state insurance departments. This is what defines SUNZ and how we conduct our business.
 Significantly, the Sorensen Entities renewed multiple policies with SUNZ over additional policy periods. And, during their time as SUNZ clients, they praised SUNZ’s claims administration, operational support, and customer service.
 Below is another story detailing Sorensen’s business and insurance activities: