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

First, Investors Sue Developer: Now, His Insurer Illinois Union

March 24, 2011 - Investors who won more than a million dollars in damages from a New Jersey housing developer have now sued his insurer, Illinois Union Insurance Co., to compel it to pay the judgment that was awarded to them.

Illinois Union, an ACE Group unit, had issued a business and management indemnity policy to David Connolloy and Connolloy Properties, of which he was president, that was effective Dec. 12, 2008 to Dec. 12, 2009.

The investors, three couples from Florida, sued Connolloy Properties in federal court in New Jersey in 2009 alleging wrongful acts by the company. They were awarded $1.368 million in damages, plus interest, on Oct. 25, 2010.

With no payment made to the couples by mid-January, 2011, the investors filed suit in U.S. District Court in New Jersey contending that Illinois Union breached its fiduciary duty to Connolloy by not indemnifying him. They further accused the Chicago-based insurer of dealing in bad faith because they had allegedly offered to settle with Connolloy, and he had contacted Illinois Union with a demand that it settle, which Illinois Union rejected.

The investors also sued two couples from Texas who had separately sued Connolloy and were awarded a $1.045 million judgment on Sept. 12, 2010. The Florida group asked for a declaratory judgment from the court that their judgment is superior to the claim of the Texas plaintiffs.

The Floridians also want the court to declare that Illinois Union owes the judgment and that it be held to perform to the specifics of the policy. Further, they asked for unspecified compensatory damages.

Connolloy’s firm managed 3,000 apartments in New Jersey and Pennsylvania. The Plainfield, N.J.-based firm collapsed into bankruptcy in late 2009, and following the judgment awarded to the Florida plaintiffs he assigned to them his interest in any rights or claims to the Illinois Union policy.

Like us on facebook!

Please note that article images are for illustrative purposes only. Images do not necessarily depict the actual facts, events, or people discussed in this story.