Auschwitz Didn’t Issue Death Certificates

Lisa Stern sued Italy’s largest insurance company on behalf of her grandfather-in-law, who died in a Nazi concentration camp — and every Holocaust victim was a winner

Published in 2004 Southern California Super Lawyers — February 2004

The living room in Lisa Stern’s Hancock Park home is filled with reminders of the crime against humanity that has been the major focus of her legal career in recent years. Display cases arrayed around the room are filled with pre-World War II Jewish artifacts from the European countries that were overrun by Hitler’s armies. These treasures — Torah crowns, Hanukkah lamps and other ritual objects that were once cherished by people who died in the Holocaust — are regularly lent out to museums.A frame hanging on one wall holds an embroidered Torah cover, its corner folded back to reveal a Nazi stamp and an inscription indicating that it had been set aside for display in a future “museum of the vanished Jew.”

In the home where she lives with her husband and three children, Stern also maintains a solo law practice, and about 90 percent of her work these days is representing victims of the Holocaust.The cases she has brought against Assicurazioni Generali, Italy’s largest insurance company today and a major purveyor of life insurance in Eastern Europe before World War II, provided a crucial breakthrough for a global restitution movement that had been running into a wall of denial for decades.

Suing Generali is more than just a job for Stern. It is also a personal vendetta. One of the company’s prewar policy holders was Mor Stern, her husband’s grandfather, who died along with his wife and three of his children in Auschwitz in 1944. Stern’s family members made repeated efforts to collect on that policy, beginning with one son’s visit to a Generali office in Prague in 1945, but were brusquely rejected on grounds that ranged from specious to callous to downright cruel. Destitute in those early years, they were told that no such policy existed, or at least the company had no knowledge of any such policy, and if it did exist, it wouldn’t be enforceable. One reason the company gave was that the family had offered no proof that Mor Stern was in fact deceased.

Stern, who had left her last law firm job to go solo in 1992 following the birth of her third child, took up the family fight against Generali in 1996. Her letters were met with the same denials that other family members had received for years. But the tide turned that December. Investigators in Europe had stumbled upon a giant Generali warehouse that held copies of hundreds of thousands of pre-war life insurance policies, among them one issued to Mor Stern in Prague in 1929. The day after a company official mailed the latest letter denying that Generali had any moral or legal obligation to pay on a policy that may never have existed, someone mysteriously faxed a copy of the policy to Stern.

As a solo practitioner and a mother working out of a home office, handling an occasional medical malpractice or product liability case including several suits against Disney for roller coaster mishaps, Stern had never hesitated to bring in big guns to help her with her cases. She likes associating with lawyers “who have particular skills that exceed my own.” To take her battle against Generali to the next level, she called in William Shernoff, of Claremont, the lawyer whose multimillion-dollar verdicts have set the standard on suing insurance companies for “bad faith” in handling claims.

In February 1998, Stern and Shernoff filed suit in California against Generali on behalf of the heirs of Mor Stern and four other similarly situated families. They demanded $10 million for the value of the policies and $125 million in punitive damages. Underscoring the historical backdrop in which a trial jury would be immersed, the lawyers announced the suit at a press conference at the Museum of Tolerance, which chronicles the horrors of the Holocaust.

Later that spring, Stern and Shernoff opened a new front in their battle against Generali by helping push the state legislature to approve the Holocaust Victims Insurance Act. It was the first of three state laws that extended the statute of limitations and broke down other procedural barriers that might have kept Holocaust suits out of California’s courts.

At a hearing in January 1999, Los Angeles Superior Court Judge Florence-Marie Cooper found the law constitutional and concluded that her court was a proper forum for such a suit, in light of Generali’s substantial and ongoing business ties to the state. She rejected Generali’s motion to dismiss the suit and set it for trial. That was enough to convince Generali to reach an out-of-court settlement with the Sterns and four other families.The company paid a sum that the plaintiffs promised not to disclose but which the New York Times pegged at $1.25 million. If true, that would mean Shernoff and Stern settled for less than 1 percent of their demand. But it was the first payment ever made by an insurance company on a policy held by a victim of the Holocaust, and it helped open the door to payments to thousands of others.

For their landmark out-of-court victory in that case and legislative successes, Stern and Shernoff were named Consumer Attorneys of the Year in 2002 by the leading plaintiff lawyers association in the state. The award proclamation asserts that the litigation launched by Stern and Shernoff in California, and the specter of many more such suits to come, was a major factor in the decision by German insurance companies and industrial conglomerates that benefited from slave labor during the war to pay nearly $5 billion into a fund called the German Foundation that is now making payments to victims of the Holocaust, more than 15,000 of whom live in California. At about the same time, other European insurance companies joined with the International Commission on Holocaust Era Insurance Claims (ICHEIC) to set up a separate mechanism to settle claims stemming from pre-war insurance policies. Generali has contributed $100 million to that effort.

“I’m proud to have played a very small part in that,” says Stern, referring to the considerable progress that has been made by the worldwide Holocaust restitution movement in the last five years. But she and Shernoff have not been resting on their laurels, nor for that matter have they accepted honors for a victory that in their view is incomplete.They are now pursuing 19 more cases on behalf of the families of other Generali policyholders who died in the Holocaust, and they remain as determined as ever to bring those cases to a trial before a California jury.

The German Foundation and ICHEIC claims mechanisms haven’t made Stern and Shernoff’s ongoing crusade any easier.To the contrary, Generali is now citing ICHEIC as Exhibit A in its efforts to get the cases kicked out of court. And its willingness to work with that commission enabled the company to retain Kenneth Bialkin, one of the most prominent senior partners in the high-powered law firm of Skadden, Arps, Slate, Meagher and Flom, to take over the Holocaust cases. Bialkin has done so with gusto. To keep their selfserving litigious crusade going, Shernoff and Stern have resorted to foisting “calumnies and misleading statements” on the press and public, he says, citing the oftrepeated claim that Generali demanded official death certificates for those last seen being packed into cattle cars bound for concentration camps. “We believe that is a lie out of the whole cloth,” says Bialkin. “It makes very good press, but according to Generali, it never happened. And no one can produce any credible evidence that it ever did happen.”

Bialkin’s hardball rhetoric is what you might expect to hear from an insurance company that stands accused of enriching itself with money from victims of the Holocaust. But Bialkin isn’t just any hired gun. He is chairman of the America-Israel Friendship League, president of the American Jewish Historical Society, and a former chairman of both the Anti-Defamation League and the Conference of Presidents of Major American Jewish Organizations.

“I don’t know what their game is. They keep trying to have the matter brought before a California jury,” Bialkin says. “I don’t know why they are attacking a system by which Holocaust victims can be paid, unless they’re looking for a big payday for themselves.”

Stern and Shernoff angrily respond with rebukes of their own. “There’s something wrong when a pillar of the Jewish community takes money from this insurance company to beat down and destroy claims of Holocaust survivors,” Shernoff says. Bialkin is a “great attorney,” adds Stern.“Before this litigation, he enjoyed a wonderful reputation for being a protector of Jewish causes. But what bothers survivors is that he is using his talent to seemingly stonewall survivors at their last and darkest hour of need.”

Responding to Bialkin’s assertion that she considers the most scurrilous of all, Stern adds, “From the outset we have funded these cases ourselves, and we do not get paid until the clients win a judgment or accept a settlement.” And even then, the clients will get the “lion’s share,” she says. “Mr. Bialkin’s firm I suspect has billed millions of dollars. They get paid by the hour to stonewall.”

The flagrant lie has been one of the tactics in Generali’s bag of tricks, she says, citing the company’s denial, staunchly backed up by Bialkin, that it ever demanded for death certificates for victims of the Holocaust. On a display board in her office, Stern has a copy of a letter from Generali that she says is just one piece of the body of evidence that proves it was a standard practice among all insurers. Affirming the company’s long-standing denial of the Stern family’s claim, the letter date April 1, 1997, from a Generali official on Generali letterhead, states, “The successors of the late Mor Stern presented their claim to Generali in Prague in 1945 and were rejected … as they were unable to produce a death certificate.”

Bialkin says there is no telling who might have been sitting in a Generali office in war-ravaged Prague in the chaotic immediate aftermath of World War II. Indeed, the company’s operations in Eastern Europe, along with all of their assets and liabilities, were nationalized by the communist governments that soon took over, he says. That is yet another reason why Generali today has no legal or moral obligation to pay on life insurance policies taken out in Eastern Europe more than half a century ago, Bialkin insists.

The company is paying such claims anyway, he adds, through its generous $100 million contribution to ICHEIC. Bialkin explains that he turned down Generali’s plea for legal help when the company was engaged solely in fighting claims in court. He agreed to take on the case only after Generali indicated that it was willing to participate in the settlement process. “I have spent my life heavily committed to Holocaust justice and Jewish issues, and I would not be associated with a cause or a group that I didn’t think was constructive,” Bialkin adds.

ICHEIC is playing a key role in a process that has included a wide array of Jewish and Holocaust survivor organizations and representatives from European, U.S. and Israeli governments, he says. “I think Generali responded to that process forthrightly and honorably. So I’m not at all embarrassed to take up their cause, which has been one of payment of claims.” More than 90 percent of offers made by the commission have been accepted, he says. And Bialkin insists that the payments to the claimants have “in almost every case been more than the amount they would have received” if they had cashed in their policies at maturity in Eastern Europe in local currencies that would have been largely worthless at the time.

Shernoff is willing to concede that the ICHEIC process has done some good. “Most people, especially those in Europe, can’t sue,” he says. “A lot of them are too old to suffer through lengthy litigation, and in a lot of countries the laws don’t allow suits because of statutes of limitations and other problems. So it could be argued that if it wasn’t for this commission, a lot of people wouldn’t get anything.” But he disputes Bialkin’s claim that the settlements are generous.

“From what I’ve been able to discover, Generali probably had exposure of $1 billion or more from policies held by victims of the Holocaust that were unpaid. They contributed $100 million to a fund. That’s a good piece of work by the lawyers for the insurance company, but that’s not justice as far as I’m concerned,” Shernoff says.

Stern adds that some of her clients have received offers from ICHEIC ranging from several hundred to several thousand dollars. “They are free to accept, and many people have.” But for those who have chosen to exercise their right to a jury trial, which is enshrined in the California Constitution, she is committed to continuing the fight, Stern says. “Remember, had these policies been paid when they were due, my clients would have had food, clothing, shelter and passage from their displaced-persons camp. They would have been able to immigrate and start a new life with dignity. Instead they were unnecessarily tortured and they suffered for longer than they should have suffered due to Generali’s failure to honor these claims.

“In the meantime, Generali was greatly enriched. Look at their balance sheet before the war and look at their balance sheet after the war and ever since and you will find that they have exploded onto the international insurance scene as a major player, one of the world’s wealthiest corporations. Survivors believe it is because of the blood money that they stole.”

As for exactly how much they deserve in recompense, she adds, “We’ll let a California jury decide what’s fair.”

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