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

Oily Fish in Japan Brings ACE American Lawsuit in United States

January 21st, 2013 - A Seattle-based seafood company has sued ACE American Insurance Co. after being denied coverage in a lawsuit over contaminated products sold in Japan.

Trident Seafoods Corp. charged the ACE Group unit with breach of contract, bad faith dealing and violating Washington State’s Consumer Protection Act and Insurance Fair Conduct Act. Its complaint for damages was first filed in Washington Superior Court but has been removed to U.S. District Court in Seattle.

Trident had purchased a commercial general insurance policy from ACE that covered a period from December 31st, 2010, to December 31st, 2011. Shortly after the policy started, a Trident-owned factory trawler, the Kodiak Enterprise, harvested Alaskan pollock and processed it into fish oil that it stored onshore in Japan.

In April, 2011, a crack was found in one of the ship’s storage tanks. It was repaired, but not before small amounts of petroleum had mixed with the fish oil.

By then, however, a Japanese company, Matsuura Suisan Co., had purchased the fish oil and mixed it with other ingredients to manufacture food for commercially farmed fish.

Fish fed with the tainted food was sold to Japanese restaurants and supermarkets, but was found to have an objectionable taste and smell and eventually all impacted fish were destroyed.

Matsuura then turned to Trident for damages. Trident notified its three insurers - ACE, Underwriters of Lloyds and Steamship Mutual Underwriting Association. The latter two agreed to coverage and on March 21st, 2012, contributed $3 million to the $5 million settlement Trident reached with its client.

ACE, however, denied coverage. Trident said in its suit that ACE “unreasonably and overbroadly” interpreted the exclusions on which it relied, ignored applicable law, and gave greater consideration to its own interest than to its insured.

Trident asked the court to find that it is allowed to recover damages from ACE, and that it be awarded treble damages due to the insurer’s alleged violation of state consumer protection and insurance fair conduct codes.

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