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

FOSTER v. WESTCHESTER FIRE INSURANCE COMPANY et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:09-cv-01459 Search Pacer
ACE Group party(s): 
Opposing Party: 
JOHN K. FOSTER, III
Court Type: 
Federal
US District Court: 
Western District of Pennsylvania
Date Filed: 
Oct 30 2009

"COUNT I - DECLARATORY JUDGMENT
John K. Foster ID v. All Defendants

52. The averments of paragraphs 1 through 51 above are incorporated by reference.

53. Pursuant to the Pennsylvania Declaratory Judgments Act, 42 Pa.C.S. §§ 7531-7541, Foster seeks a declaration that Westchester is required to defend and indemnify him under the Policy with respect to the claims asserted against him by Yavorka.

54. Under the Policy, Westchester agreed to indemnify Foster for claims first made against Foster during the policy period and first reported to Westchester during the policy period, provided that the act, error, omission or personal injury upon which the claim is based happens:
A. during the Policy Period; or
B. prior to the Policy Period provided that:

1. such act, error, omission or Personal Injury happened on or after the Retroactive Date as indicated on the Declarations Page of this policy; and
2. at the inception of this policy the Insured had no reasonable basis to believe that any Insured had breached a professional duty and no reasonable basis to believe an act, error, omission or Personal Injury might be expected to result in such Claim or Suit.
(Policy, Section I — Coverage (emphasis omitted).)

55. The Policy defined the term "Insured" to include F&G and "[a]ny past and present partners, officers, directors, stockholders, members, managing members or employees of P&G. (Policy, Section II — Persons Insured.)

56. Foster is an "Insured" under the Policy.

57. The June 4, 2008 Communication constitutes a Claim as that term is defined in the Policy.

58. The June 4,2008 Communication was the first instance that Foster was aware that anyone believed he had committed an act, error, or omission that might result in a claim or suit against him arising out of his representation of Wolf and/or Yavorka.

59. Prior to the June 4, 2008 Communication, Foster had no reasonable basis to believe that Yavorka would assert a Claim against him, as defined by the Policy.

60. The Claim asserted in the June 4,2008 Communication was first made during the Policy Period.

61. Foster first reported Yavorka's Claim to Westchester on or about June 4,2008, which was within the Policy Period as that term is defined in the Policy.

62. The acts, errors, omissions, and/or personal injuries upon which Yavorka's Claim was based happened after February 9,1996, which is the Retroactive Date under the Policy.

63. At the inception of the Policy, Foster had no reasonable basis to believe that he had breached a professional duty to Yavorka.

64. At the inception of the Policy, Foster had no reasonable basis to believe that an act, error, omission, or personal injury might be expected to result in a Claim or Suit by Yavorka, as those terms are defined in the Policy.

65. The Complaint filed in the Yavorka Action asserts a Claim or Claims within the coverage of the Policy.

66. All conditions precedent to Westchester's duty to indemnity and its duty to defend Foster in the Yavorka Action have been satisfied.

67. Westchester must defend and indemnify Foster under the Policy with respect to the Yavorka Action.

WHEREFORE, Plaintiff, John K. Foster III, respectfully requests judgment in his favor and against Defendants in the form of a declaratory judgment declaring that Westchester must provide insurance coverage to Foster under the terms of the Policy in connection with the Yavorka Action, must defend Foster in connection with the Yavorka Action, and must indemnify Foster for any damages awarded in the Yavorka action and for all costs, fees, and expenses incurred by Foster in connection with the Yavorka Action and the procurement of insurance coverage, and such other and further relief that this Court deems just and proper.

COUNT II - BREACH OF CONTRACT
John K. Foster III v. Westchester Fire Insurance Company

68. The averments of paragraphs 1 through 67 above are incorporated by reference.

69. The Policy constitutes .an enforceable written contract.

70. Under the terms of the Policy, Westchester agreed to defend and indemnify Foster for claims first made against Foster during the policy period and first reported to Westchester during the policy period, provided that the act, error, omission or personal injury upon which the claim is based happens:
A. during the Policy Period; or
B. prior to the Policy Period provided that:
1. such act, error, omission or Personal Injury happened on or after the Retroactive Date as indicated on the Declarations Page of this policy; and
2. at the inception of this policy the Insured had no reasonable basis to believe that any Insured had breached a professional duty and no reasonable basis to believe an act, error, omission or Personal Injury might be expected to result in such Claim or Suit.

71. Westchester has materially breached the terms of the Policy by refusing to defend and indemnify Foster in connection with Yavorka Action.

72. As a direct and proximate result of Westchester's breach of the Policy, Foster has sustained or will sustain damages in an amount in excess of $25,000.00, exclusive of costs, interest, attorneys' fees, and such other and further relief as the Court deems just and proper.

WHEREFORE, Plaintiff respectfully requests judgment in his favor and against Defendant Westchester Fire Insurance Company in an amount in excess of $25,000.00, in addition to costs, interest, attorneys' fees, and such other and further relief as the Court deems just and proper.

COUNT III - BAD FAITH
John K. Foster III v. Westchester Fire Insurance Company

73. The averments of paragraphs 1 through 72 above are incorporated by reference.

74. At all times relevant hereto, Westchester was Foster's "insurer" as that term is defined for purposes of the 42 Pa.C.S. § 8371.

75. For the reasons set forth above, the Policy required Westchester to indemnify and defend Foster against the claim asserted by Yavorka.

76. Foster fully cooperated with Westchester in attempting to procure coverage under the Policy by, among other things, timely notifying Westchester of the potential claim by Yavorka, providing Westchester with all requested information regarding his representation of Yavorka, and providing Westchester with a copy of the Complaint filed in the Yavorka Action.

77. Westchester based its denial of coverage to Foster and its decision to refuse to defend Foster in the Yavorka Action on facts not appearing in the Complaint filed in the Yavorka Action.

78. Westchester has failed or otherwise refused to analyze the allegations of the Complaint filed in the Yavorka Action in determining whether to provide coverage to Foster under the Policy.

79. Westchester did not have a reasonable basis for denying Foster coverage under the Policy.

80. Westchester knew of or recklessly disregarded its lack of a reasonable basis for denying Foster coverage under the Policy.

81. In investigating Foster's claim and in its denial of Foster's claim, Westchester breached its duty to act in good faith to Foster and acted through a motive of self-interest or ill will toward Foster.

82. Under 42 Pa.C.S. § 8371, Foster is entitled to: interest on the amount of his claim from the date the claim was made in the amount of the prime rate plus 3%; punitive damages; and court costs and attorney fees against Westchester.

WHEREFORE, Plaintiff respectfully requests judgment in his favor and against Defendant Westchester in an amount in excess of $25,000.00, in addition to interest, costs, attorneys' fees, punitive damages, and such other and further relief that this Court deems just and proper."

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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