Originally published in AGBU News magazine (April 2004)
Sam Kadorian remembers that at the age of five or six a New York Life Insurance Co. salesman visited his home in the Kharpert region of the Ottoman Empire to sell his parents insurance. Kadorian knows his parents bought it, he says, hoping to guarantee some security that their children would be cared for in the event of their death. Their own parents had died in the 1895 massacres and they knew anything was possible.
“The New York Life salesman, who happened to be an Armenian, came and talked to my father and mother. When the man left, I asked my father what’s what. My father very patiently explained to me what insurance was, so that I knew if they died I would get their insurance money, $1,000 for each one of them,” Kadorian remembers the salesman’s visit of over ninety years ago.
Earlier this year, New York Life announced a $20 million settlement with Kadorian, eleven other plaintiffs and the heirs of 2,400 other policyholders from the time of the Genocide. It has been a long time coming, according to 96-year-old Kadorian, who remains alert in mind and spirit. He’s glad to see the issue put to rest.
After Kadorian’s father died in the 1915 tragedy, his mother and he made it to America and contacted New York Life to make good on their promise. He remembers it was a frustrating process that went nowhere.
Other than a childhood memory and a notation in an old address book where to mail policy payments, Kadorian doesn’t have any physical documents to bolster his claim. In fact, almost all of the dozen named plaintiffs do not have the original policy papers but fortunately for the class action suit one family does.
More Than Money
Martin Marootian is an extraordinary man with meticulous family records that include not only the original policy document purchased by his uncle, Setrak Cheytanian, but also receipts from several payments made to New York Life before his death during the Armenian Genocide.
“I have in my possession an insurance policy on my uncle’s life, which my mother and older sister had been trying to collect since 1923. They came to America in 1914 with the insurance policy,” Marootian said with his wife, Seda, reminding him that his mother had directly received the policy from his uncle who had passed it along for safekeeping.
“[New York Life] claimed they had no records of the policy and wanted proof of death—they wanted to make sure that we were the proper heirs. She had to write to the Patriarch in Constantinople to verify that there was a massacre in Kharpert and he had died. Time went by and my mother received a death certificate notice from the Patriarch only in May 20, 1956. We got all those papers together and still we couldn’t make any headway with New York Life,” Mr. Marootian says about a thwarted attempt decades ago.
Mrs. Marootian elaborated, “There is correspondence with New York Life that has been saved over the years, which is evidence that they had been working on the case and New York Life had just ignored it. If Martin’s family hadn’t saved records we wouldn’t have had a case today.”
There were many unanswered questions for everyone involved in the case but slowly the pieces of the puzzle came together.
On January 28, 2004, a press release from New York Life announced a $20 million settlement was reached and Armenians around the world saw it symbolically as another step towards international Genocide recognition. Sy Sternberg, chairman and chief executive of New York Life, is quoted in the statement, “Our willingness today to resolve policies that may remain unpaid from that era shows that New York Life adheres to the same values of integrity and humanity that guided us then.”
But not everyone believes in New York Life’s altruism and some have criticized New York Life’s press release as shying away from the term “genocide” and using the softer term “massacre.” New York Life representative William Werfelman, in a phone interview, explains that is not a rejection of the term, “As a business enterprise, the purpose of our release was to discuss the company’s policyholder base that was at issue in this case. I will tell you very plainly that our own records use the term massacre, so we are using the term that our own people used from 1915 to 1920.”
Word reached New York Life’s headquarters in New York via their European head office in Paris that many of their policyholders in the Ottoman Empire were perishing. Werfelman says that some of the records of the era mention that policyholders had died in a massacre. “We found that following the massacre in the Ottoman Empire most of our Armenian policyholders had perished and what we set about trying to do was finding heirs to pay those policy proceeds to, because obviously the company’s mission is to be there when people need us.”
The company, he explained, hired an Armenian attorney in Istanbul who was able to make a third of the payments between 1917 and 1923. New York Life officially says there were 2,400 Armenian policyholders in total, a number they arrived at, Werfelman says, with assistance from members of the Armenian American community and the plaintiff’s attorneys.
While New York Life claims they made every effort to find the heirs, Marootian doubts it. Born 1915 in New York City, Mr. Marootian says that they may have made an effort overseas but here at home it was a different story, “They didn’t have to go far to locate my family, because we were right under their headquarters’ shadow.” His family later moved to Connecticut but the stonewalling continued.
“Finally, after many years my mother and sister passed away. My wife and I continued the case with the lawyer,” Mr. Marootian says about Vartkes Yeghiayan, the attorney who spearheaded the case.
“I could’ve gone ahead and done this case on my own, which would have netted me much more money but we decided to go ahead with the class action suit and try to help the Armenian community,” Mr. Marootian says, also mentioning that one of his lawyers claimed that he could’ve probably received over a million dollars if he went solo with his documents.
“We have 11 other plaintiffs on the case but few have as detailed papers as we have. They have memories that their parents purchased a policy or they have receipts of payments. I’m on the only one who had a bona fide policy plus receipts of annual payments. We wanted to tie this case with the Genocide, it was a hope on my part that we could do this,” he says and adds that his uncle made his last payment on July 13, 1914, indicating he was paid up until the time of his death.
“Finally, New York Life is recognizing their responsibility to the Armenian community by honoring their contracts.”
Reading Between the Lines
Certainly the Marootians produced the smoking gun that gave the case its biggest boost, but some outsiders credit 67-year-old lawyer Vartkes Yeghiayan as the true hero. The spark that would eventually lead to the New York Life settlement began for him almost two decades ago.
“It started with Ambassador [Henry] Morgenthau’s book which I was reading for the second time in 1986. I came across that paragraph where he talks about the lists of American insurance companies,” Yeghiayan says.
The words that made Yeghiayan think is a chilling passage of a conversation Morgenthau had with one of the Armenian Genocide’s masterminds. It is recorded in the Ambassador’s book, Ambassador Morgenthau’s Story:
“One day Talaat made what was perhaps the most astonishing request I had ever heard. The New York Life Insurance Company and the Equitable Life of New York had for years done considerable business among the Armenians. The extent to which this people insured their lives was merely another indication of their thrifty habits.
‘I wish,’ Talaat now said, ‘that you would get the American life insurance companies to send us a complete list of their Armenian policyholders. They are practically all dead now and have left no heirs to collect the money. It of course all escheats to the State. The Government is the beneficiary now. Will you do so?’
This was almost too much, and I lost my temper.
‘You will get no such list from me,’ I said, and I got up and left him.”
While Morgenthau refused Talaat’s request, a thought occurred to Yeghiayan, “I started saying maybe we should get this list.”
The events that followed were a combination of determination, luck and the support of a community frustrated with justice.
Out of the blue, Yeghiayan wrote to then Secretary of State George Shultz. While Yeghiayan’s office staff laughed at the idea, Secretary Shultz responded and forwarded the request to the federal archives. A week later the archives called to clarify his request and soon for less than $200 in photocopying fees Yeghiayan received 800-900 pages of documents that began his earnest investigation.
Among the batch were paper trails demonstrating that after the New York Life Insurance Co. offices closed in the Ottoman Empire, many enterprising Armenians made their payments through the U.S. embassy. The Americans saw to it that New York Life received the money—he knew he was on the road to something.
Building a Solid Case
Yeghiayan placed an ad in the Armenian papers asking for any documents related to the insurance policies. “I think it was a mistake asking for documents,” he admits. “The next thing you know, people are sending me pictures of their ancestors, with Xs on the people who were killed and the names of the deceased written on the back. I thought what am I getting into?”
Among the flood of mementoes, a woman told him that she had what he wanted and invited him to visit her at her home in Irvine, California.
Yeghiayan remembers his anticipation was palpable, “Just like a dream, in a shoebox, tied with a ribbon, there was an insurance policy.” The woman passed away during the ten years it took to launch the case, but her brother Martin Marootian continued the fight.
By 1997, Yeghiayan noticed a number of Jewish American attorneys filing insurance cases for Holocaust survivors. He called the predominantly New York-based lawyers and carefully watched and learned. He noticed they had passed legislation to extend the statute of limitations for the insurance cases and Yeghiayan decided that was the next logical step.
He called former California governor George Deukmejian who suggested Republican California State Senator Charles Poochigian might be the right person to help.
Sen. Poochigian was surprised to learn of the case and immediately saw the necessity for such a bill.
“As a grandson of survivors and having been raised with grandparents who were very much affected by the murder of siblings and parents I was keenly aware and interested in the issue of the Genocide. I was enthusiastic about doing all that I could to be helpful and to do whatever I could to ensure the likelihood that the contracts entered into would be enforced,” Sen. Poochigian said about a drive to pen the legislation.
The resulting Armenian Genocide Insurance Victims Act (California Civil Procedure 354.4 or more fittingly Senate Bill 1915) was fashioned on the Holocaust insurance bill that was passed in 1998. The bill extended the statute of limitation for insurance claims to 2010. Introduced in February 2000, it was passed in months.
“One of the nice things about living in California, with the substantial Armenian population throughout the state, is that many of my colleagues of both political parties, Republican and Democrat, have favorable and positive relationships with Armenian leaders and constituents. Selling the idea to them was not that difficult,” Sen. Poochigian says. “We heard some objection from the representatives of insurance companies. I think that their concerns had to do with expanding opportunities for litigation and the sensitivity surrounding the circumstances that gave rise to the problem caused them concern as well.”
Even with some early concerns, Sen. Poochigian remained steadfast, “Early on, some of the representatives of insurance companies inquired as to the seriousness of my commitment to getting this done. While I try to be as thoughtful as possible on all issues and reach consensus where I can in my public life, on this one I made it exceedingly clear to them that neither I nor those who brought this issue to me would compromise.”
Having done his part, Sen. Poochigian has been watching the rest of the drama unfold but he dismisses any altruistic spin New York Life is trying to sell to the public, “There is nothing heroic about what they’ve done to the extent that they seek to give the impression that it’s a good deed for which they deserve credit, that notion is not supportable.”
While Yeghiayan does not doubt Sen. Poochigian’s commitment to the bill, he believes the insurance lobbyists were slow to react partly because the media honed in on a World War II slave labor bill that was being presented at the same time.
With a state bill under his belt, Yeghiayan wanted to see that the case was heard in California, even though the original policies mentioned that all legal actions should be executed in London or Paris (depending on the language of the original policy). While New York Life’s lawyers brought up a number of smokescreens arguing that the topic was an issue of foreign policy and out of the jurisdiction of the state, the judge disagreed. The judge said that the issue had nothing to do with foreign policy or even the Genocide, but dealt with a simple contractual matter concerning an American company and the legislative intent was to serve the people of California.
“When the judge said that, obviously it was a major victory for us. New York Life attorneys were really quite confident the case would be sent to France or England,” Yeghiayan says about an averted disaster, knowing the statue of limitations would’ve been a concern again and European class-law suits were more difficult.
As victory seemed to creep closer, the original Marootian case snowballed to include plaintiffs from across America and overseas. Yeghiayan invited three new attorneys to join the bulked up case: Armenian American Brian Kabatek, celebrity lawyer Mark Geragos and Holocaust insurance case veteran William Shernoff.
The lawyers at this point started thinking about the settlement amount but they never made a specific request and left the decision to the courts. They were acutely aware of what constituted a fair settlement and one archival document from New York Life—who was sharing their files with Yeghiayan’s team at this point—complained that their loss could be over $10 million—the total value of all 8,300 Ottoman policies.
“We were estimating that the Armenians [we represent in our class action suit] may have been 25% out of the total but New York Life came to us with calculations trying to determine the amount,” he says explaining that Armenians were not the only people to buy insurance at the time.
Of the total policies, roughly 3,800 were sold to Armenians (roughly 45%), of which 1,200 cases were resolved at the time of the Genocide.
“They gave us everything they had and the whole case came down to the value. They calculated that the Armenian cases that hadn’t been paid were worth $1,200,000 in 1915. The question now is what is that worth today,” Yeghiayan says about a complicated problem considering California law insists interest on insurance policies begin when a claim is filed.
Yeghiayan’s team hired a UCLA economist who projected theoretical sums that went up into the hundreds of millions. The precedent of the Holocaust insurance claims were examined and they were usually granted ten times the original amount. Even the UCLA economist agreed $10,000,000 was a reasonable figure, but Yeghiayan objected. He argued this was an older historical event and there would be more interest accumulated. When I spoke to Yeghiayan, he and the other lawyers were bound to a gag order not to criticize New York Life, but his defense of the company sounded sincere.
“To be fair to New York Life, what they did in 1922 was to reinsure with a French company, L’Union, which was a very large company, much larger than New York Life. When they realized they were getting out of Europe, New York Life reinsured or transferred, or assigned, to L’Union, and they transferred the reserves they had too. To be fair to New York Life, they had nothing; they didn’t keep all the money. If they had kept it, we could’ve asked for interest.”
The next step was filing for a class certification which involved thousands of pages including exhibits. Things were further complicated when some individuals began publishing documents online. The judge was going to make a ruling on the class certification but then both teams of lawyers decided to resolve it among themselves when they realized that appeals for either side could take years. With the help of Insurance Commissioner of California, John Garamendi, a final agreement was in sight.
Special features of the final deal were hammered out including an heirless fund for charities that both helped Genocide survivors and today help the disadvantaged in Armenia.
The $3 million fund will go to six Armenian American church charities and three other non-profit organizations, including the Armenian Educational Foundation, the Armenian Relief Society and AGBU. To guarantee that the funds serve those most in need, both teams of lawyers have established strict guidelines that dictate accountability.
Notices will be posted in two national American papers (USA Today and the Wall Street Journal), various Armenian papers and a website (www.armenianinsurancesettlement.com) which will provide a complete list for people eager to know if their family is listed. Yeghiayan’s office already fields over a hundred calls a day from people curious to know if they are eligible.
A Human Face
Bureaucracy and legal wrangling aside, Yeghiayan has experienced some wonderful human moments that have touched his heart and made it all worth the effort. When his team of lawyers placed an ad in an Armenian paper listing 18 names of policyholders from Erzerum, one man called and said that one of the names was quite uncommon and thought he might be related to him. Then a woman from New Jersey called to say the same person has a relative in Baghdad, Iraq. Eventually relatives in Russia and Georgia surfaced.
“The man that first called me told me that all the families were meeting in Paris for New Year’s Eve that year. When in February I called him asking him why he hasn’t followed up with me, he said, ‘Who cares about the policy, we found family,’” Yeghiayan says. He hopes the final insurance list will lead to more reunions of families shattered by the tragedy of 1915.
Now that the settlement is finalized, there is grumbling by claimants that they may only net $3,000 each while all four lawyers will divvy up $4 million, so some will likely opt out according to the Glendale News-Press.
According to Marootian, the award to the plaintiffs seemed to be the last item on the lawyers’ agenda, which tended to focus on how much would go to themselves and the community.
A recent letter to the editor published in the Glendale News-Press thought it was amusing that the Armenian insurance policyholders were unhappy with the payouts. The writer exaggerated, “Typically in a class-action lawsuit, the lawyers will get around $385 million for legal fees and each of the plaintiffs will get a coupon worth $5 from the company they are suing.”
Whatever the final decision of the plaintiffs, the settlement is monumental but only one of almost a dozen cases pending in the courts against Genocide-era insurance companies.
“This is just the beginning. From a legal point of view, we are mobilizing the Armenian community like any organization does,” Yeghiayan proudly says about their success.
The feisty attorney also sees the case as opening some doors for future academics, “I keep telling historians that they should be looking at corporate records for proof of the Genocide. Governments can have their own political agenda or self-interest but corporate records are more simple.”
One German historian, Dr. Hilmar Kaiser, who helped in the New York Life case and has his own views on the case’s significance says, “It is a first practical step. The first insurance company has faced its own history. Others will follow. It also sends a clear message to all insurance companies, banks etc. that Armenians mean business.”
Dr. Kaiser sees the timing of this decision coinciding with a time when the Turkish government may be reassessing the Genocide, “Turkish public opinion is not yet prepared to face the truth. It would take some time for [Turkish Prime Minister] Mr. Erdogan to embark on a new course. But historically speaking, he is the first Prime Minister who does not belong to a party that stands in the tradition of the Young Turk Regimes. His constituency was always in opposition and that might open up some space for new approaches. The 90th anniversary of the Genocide next year might provide a good occasion for that.”
While the impact may be greater than anyone can predict, many plaintiffs are happy they did their part. “I’m glad we’re still alive and something has finally been done for not only us, but for my parents’ sake and for the Armenian community,” Mr. Marootian says.
During the deposition with New York Life’s lawyers Martin was asked why he thought New York Life should recognize the Armenian Genocide. “I think everyone should recognize the Armenian Genocide,” he shot back.
He later pointed out to me the irony of the company’s slogan, “You know they have an ad that says, ‘The Company You Keep.’ Well my family had held onto an unpaid policy for over 80 years but it took a team of attorneys to finally make ‘that company you keep’ pay up on my uncle’s policy.”
Thankfully that has changed and Martin Marootian can have the piece of mind knowing that a greater justice is been served.