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

GRAFTECH INTERNATIONAL LTD. et al v. ACE AMERICAN 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: 
1:12-cv-01139 Search Pacer
ACE Group party(s): 
Opposing Party: 
Graftech International Ltd.
Court Type: 
Federal
US District Court: 
District of Delaware
Date Filed: 
Sep 17 2012

"COUNT I - BREACH OF CONTRACT

25. Plaintiffs repeat and re-allege herein paragraphs 1 through 24 as written above.

26. The 2002 Policy issued to Plaintiffs in Delaware provides defense and indemnity to the Plaintiffs in response to Plaintiffs' costs and liabilities arising from the Underlying Litigation. A copy of the 2002 Policy is attached hereto as Exhibit "H".

27. The Defendants were notified of the Underlying Litigation and demanded that the Plaintiffs co-operate with the Defendants before the Defendants considered providing defense and indemnity.

28. Defendants misused the cooperation clause of the 2002 Policy and disingenuously repeated their demands for documents from the Plaintiffs, when the Defendants had no intention of providing any defense or indemnity to the Plaintiffs under the 2002 Policy or otherwise in response to the Underlying Litigation.

29. Plaintiffs have spent approximately $1,709,000 in defending the Underlying Litigation, including more than $250,000 in defending the Henry January lawsuit alone.

30. Defendants breached the terms and conditions of the 2002 Policy on August 21, 2012, when Defendants refused to pay to Plaintiffs' defense costs in excess of $250,000 to defend the Henry January lawsuit or otherwise.

31. Defendants' breach of this insurance contract is ongoing, and Plaintiffs will incur additional defense costs payable by the 2002 Policy, and may also incur settlement or judgment costs.

32. Defendants may not avoid their contractual obligation to Plaintiffs under the 2002 Policy or otherwise by asserting, as Defendants have in their lawsuit against Plaintiffs in the Southern District of New York (hereafter "the Peremptory Lawsuit"), that defense costs should be equitably allocated among the individual cases of the Underlying Litigation on a so-called pro-rata basis.

33. Defendants may not avoid paying to Plaintiffs past and future defense costs by claiming that Plaintiffs' costs of defending each lawsuit composing the Underlying Litigation must exceed $250,000, notwithstanding that Plaintiffs' costs of defending the Henry January lawsuit in fact exceed $250,000.

34. By waiting over two years from the date of receiving first notice of the Underlying Litigation before issuing a reservation rights letter to Plaintiffs, Defendants have waived all of their policy defenses and must reimburse Plaintiffs for all defense costs in excess of $250,000, as well as any settlement or judgment costs, under the 2002 Policy and otherwise.

WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their favor and against Defendants for breach of Defendants' contractual obligations under the 2002 Policy, and award damages to Plaintiffs in an amount in excess of $1,000,000, in addition to attorney fees and costs, pre- and post-judgment interest, and such other and further relief as the Court deems just and appropriate.

COUNT II - BAD FAITH

35. Defendants had a duty to act in good faith toward Plaintiffs in the claims management process under the 2002 Policy.

36. Defendants acted in bad faith in failing to conclude the claims management process initiated by Plaintiff by filing the Peremptory Lawsuit.

37. Defendants' actions and inactions were guided by Defendants' deliberate intention to file the Peremptory Lawsuit and establish some sort of litigation advantage over the Plaintiffs.

38. Defendants' disingenuous conduct has and will cause Plaintiffs to incur unnecessary expenses.

39. Defendants have falsely represented to Plaintiffs that Defendants needed more information in order to evaluate the Underlying Litigation when Defendants had no intention of doing so.

40. After filing the Peremptory Lawsuit, Defendants, in bad faith, professed that they required still more information from Plaintiffs and were, lacking such information, allegedly unable to complete a review of Plaintiffs' defense costs. (See Exhibit "C").

WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their favor and against Defendants on the claim of bad faith in an amount to be determined by the Court for compensatory and punitive damages, attorney fees and costs, pre- and post-judgment interest, and such other and further relief as the Court deems just and appropriate."

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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