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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Bill Collector Duns ACE Property, other Insurers with Lawsuit

April 24, 2012 - A for-hire bill collections and customer service company has sued ACE Property and Casualty Insurance Co. to try to force it to defend the plaintiff in two lawsuits it faces.

Encore Receivable Management Inc. and sister company Convergys Customer Management Group Inc., are seeking declaratory relief and damages for breach of contract from the ACE Group unit and six other insurers that insured it for a seven-year period starting Oct. 1, 2005. They allegedly provided the plaintiffs with primary coverage, umbrella policies or excess policies.

Two claims are the focus of the lawsuit, both of them being class-action lawsuits begun in California. In the first, called the Knell Action, Encore is alleged to have wiretapped, eavesdropped upon or recorded conversations without the consent of California residents who brought suit against the company.

The second claim, the Wheelock Action, alleges that people who telephoned Hyundai Motor America’s customer service department on cellular or cordless phones had their conversations recorded without notice.

Plaintiffs said in the latter suit that Convergys had provided call center services to Hyundai and had recorded calls for quality control purposes. Once Hyundai was sued, it demanded that Convergys hold it harmless and assume its defense in that suit.

The plaintiffs alleged in the suit, which was filed in U.S. District Court for the Southern District of Ohio, that they have fulfilled their prerequisites for coverage and notified the insurers of the actions in a timely fashion. But the defendants have reportedly failed to acknowledge their duty to defend, pay defense costs or indemnify the plaintiffs for costs connected to the claims.

ACE specifically denied coverage obligations with respect to the Wheelock claims, said the plaintiffs, and has not acknowledged coverage for the other action.

The plaintiffs said that ACE is not protected by any exclusions in their policy. They asked the court to award them damages, and to order the insurers to defend it going forward.

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