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

BOHEMIA BAY YACHT HARBOUR CONDOMINIUM ASSOCIATION, INC. v. ACE AMERICAN INSURANCE COMPANY

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Case Number: 
1:12-cv-01958 Search Pacer
ACE Group party(s): 
Opposing Party: 
Bohemia Bay Yacht Harbour Condominium Association, Inc.
Court Type: 
Federal
US District Court: 
District of Maryland
Date Filed: 
Jun 29 2012

"COUNT I
Declaratory Judgment

28. Plaintiff hereby incorporates all of its statements in the preceding paragraphs as iffully set forth herein.

29. "The Declaratory Judgments Act, 28 U.S.C. § 2201(a) provides that 'in a case of actual controversy within its jurisdiction ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.' The exercise of jurisdiction under the Act is not compulsory. Thus, even if a 'case or controversy' within the meaning of Article III of the Constitution is presented, the district court, it its discretion, must be satisfied that declaratory relief is appropriate." North East Ins. Co. v. Northern Brokerage Co., 780 F.Supp. 318, 320 (D. Md. 1991) (internal citations omitted).

30. "In determining whether declaratory relief is appropriate here, two questions must be asked: '(1) whether the judgment will serve a useful purpose in clarifying the legal relations in issue; or (2) whether the judgment will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. ", North East Ins. Co., 780 F. Supp. at 320 (quoting White v. National Union Fire Ins. Co., 913 F.2d 165, 168 (4th Cir. 1990)).

31. "A principal advantage of a prior determination of insurance coverage ... is that it may allow for the more efficient settlement oftort claims." Id. (citing Allstate Ins. Co. v. Green, 825 F.2d 1061,1064 (6th Cir. 1987)).

32. As explained in greater detail above, there is an actual controversy between the parties concerning the anti-pyramid language of Bohemia Bay's MOP policy and, as a result, the total coverage available under both the MOP and GCL policies.

33. A declaratory judgment addressing these issues will serve a useful purpose in clarifying whether the anti-pyramid provision of the MOP policy should apply and whether the language of that provision is ambiguous thereby rendering it unenforceable and requiring that it be construed against ACE.

34. Bohemia Bay asserts that the anti-pyramid provision does not apply, or in the alternative, that the provision is facially ambiguous. Asa result, $1,000,000 of coverage is available under the MOP policy and $1,000,000 of coverage is available under the CGL policy, for a total of $2,000,000 in available coverages under both policies.

35. ACE's position, however, is that the anti-pyramid provision allows only $1,000,000 in available coverage under the MOP policy and $0 in available coverage under the CGL policy.

36. ACE also fails to consider that the CGL policy includes additional named insureds, namely, Bohemia Bay Condominium Unit Owners and Bohemia Bay Slip Owners. (See Exhibit B at DEF00683.) The MOP policy names Bohemia Bay as the only insured. Thus, ACE's position could potentially foreclose the additional named insureds' ability to make a claim under the CGL policy if, as ACE contends, the MOP's "anti-pyramid" provision restricts the coverage available under the CGL policy as well. Bohemia Bay contends that, with respect to the additional named insureds, ACE's position could result in unintended and unbargained-for consequences.

37. Bohemia Bay believes that a resolution of this dispute will permit a more efficient settlement of the underlying Standard suit.

WHEREFORE, Plaintiff Bohemia Bay respectfully requests that this Honorable Court grant Declaratory Judgment as to the following issues:
(1) Declare that the MOP policy is excess over the CGL policy and, as a result, the anti-pyramid provision does not apply to limit coverage.
(2) In the alternative, declare that the MOP policy's anti-pyramid provision does not apply because\ one Coverage Part from two different policies applies to the same "occurrence," that is, one Coverage Part from the CGL policy and one Coverage Part from the MOP policy. As such, two different Coverage Parts from two different policies apply to this "occurrence."
(3) In the alternative, declare that the MOP policy's anti-pyramid provision is ambiguous, thereby rendering said provision unenforceable.
(4) Declare that, under the MOP and CGL policies, $2,000,000 of total coverage is available.
(5) Determine an award of costs, expenses, attorney's fees, and interest (pre- and post-judgment) thereon, necessitated in the bringing of this action.
(6) Any and all further relief that this Honorable Court deems appropriate, just, and equitable."
 

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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