(USA Herald) - A legal battle is brewing between Boston-based RockFence Baseball LLC, and Lloyd's of London underwriters over a $3.16 million loan it extended to former Minnesota Twins pitcher, Gabriel Moya.

The loan was taken out in 2018, with an accident and sickness permanent total disability policy in place in case of injury, but RockFence is now claiming that the underwriters improperly denied its claim for millions of dollars in losses sustained due to Moya's career-ending injury in 2019.

The underwriters are disputing RockFence's claims, stating that the issue at hand is whether Moya is "permanently totally disabled" as defined under the policy. They argue that RockFence is refusing to arbitrate the dispute, while RockFence claims that the denial is due to its failure to disclose all relevant information and medical records during the policy's underwriting process.

RockFence Baseball LLC is owned by a parent company called RockFence Capital LLC, which provides loans to professional athletes that are paid back using only the salary earned by the athletes. If the borrowing player underperforms and does not earn sufficient compensation as a professional athlete, that player is not obligated to repay the loan using other money, the suit says. The agreement includes an insurance policy if the borrowing player can't repay the loan due to injury or death.

RockFence Capital extended a $3.16 million loan to Moya in 2018, also purchasing insurance from the Lloyd's underwriters to protect it against financial risk if Moya became disabled. Under the deal, the underwriters agreed to compensate RockFence for nearly $5 million, or the balance of the loan.

Moya suffered a left shoulder injury during spring training in February 2019. After some rehabilitation, he played in five games for the Twins, but after being injured again that August, Moya became permanently disabled and was unable to pitch in a single regular season game for the remainder of the 2019 season and the entire 2020 season, the suit says.

He never returned to play professional baseball at the MLB level, according to RockFence.

RockFence Baseball LLC accuses the underwriters of bad faith and of breaching their contractual obligations to pay millions of dollars in losses it sustained under an accident and sickness permanent total disability policy. The case is now in the U.S. District Court for the Central District of California.

This dispute highlights the importance of thoroughly reviewing and disclosing all relevant information and medical records during the policy's underwriting process. In cases like this, arbitration may be the best way to resolve disputes, as it offers a more cost-effective and efficient way to resolve conflicts outside of the courtroom. The case is being closely watched by industry experts, athletes, and sports teams as it may set a precedent for future disputes in the sports industry.

In conclusion, Lloyd's of London underwriters' demand for arbitration in the baseball loan dispute is a crucial development in this case. It remains to be seen how this dispute will be resolved, but it highlights the importance of transparency and communication during the underwriting process, especially in high-risk industries such as professional sports. Samuel Lopez, legal news contributor for the USA Herald, will continue to follow this case and provide updates as it progresses.