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

IMAGIMED,LLC. v. WESTCHESTER FIRE INSURANCE COMPANY

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: 
1:13-cv-02031 Search Pacer
ACE Group party(s): 
Opposing Party: 
Imagimed,LLC.
Court Type: 
Federal
US District Court: 
Southern District of New York
Date Filed: 
Mar 26 2013

"COUNT ONE
(For Declaratory Judgment)

35. Imagimed repeats and realleges the allegations of paragraphs 1 through 34 as if fully set forth herein.

36. Imagimed has a valid and binding contract of insurance with Westchester that requires Westchester to pay for Loss as that term is defined in the Policy.

37. In connection with that contract of insurance, Westchester has an obligation of good faith and fair dealing which prohibits Westchester from taking action, or refusing to take action, that would prevent Imagimed from realizing
benefits of that contract.

38. On December 17, 2012, the government offered to settle a pending investigation for $490,000. That settlement qualifies as Loss under the Policy, but Westchester has refused to acknowledge its obligation to fund that settlement.

39. Pursuant to 28 U.S.C. § 2201, Imagimed seeks a declaratory judgment that Westchester is obligated to fund a settlement in the amount of $490,000 with the government.

40. Under the Policy, Westchester also has an obligation to pay attorneys' fees as incurred. Imagimed also seeks a declaratory judgment that Westchester is obligated to pay any attorneys' fees incurred on behalf of Imagimed in connection with the government investigation that have not been paid to date.

COUNT TWO
(For Breach of Contract)

41. Imagimed repeats and realleges the allegations of paragraphs 1 through 40 as if fully set forth herein.

42. Imagimed has performed all of its obligations under its contract of insurance with Westchester.

43. Westchester has breached that contract.

44. Westchester's breach of contract has caused Imagimed to suffer damages in an amount equal to what it will cost to resolve the government's claims, whether through settlement or litigation, plus pay any attorneys' fees and expenses incurred on behalf of Imagimed in connection with the government investigation that have not been paid to date.

COUNT THREE
[For Bad Faith)

45. Imagimed repeats and realleges the allegations of paragraphs 1 through 44 as if fully set forth herein.

46. As a company offering insurance to the public, Westchester is obligated to place the interests of its insureds on an equal footing with its own interests.

47. Westchester has repeatedly violated that obligation by engaging in conduct that constitutes bad faith including, without limitation, refusing to pay attorney's fees and expenses as incurred, refusing to pay the amount of attorney's fees incurred, failing to act promptly with respect to claims made under the Policy, failing to respond clearly and directly to questions posed by the insureds, refusing to cooperate with Imagimed in obtaining a resolution with the government, putting Imagimed at risk of a lawsuit by the government that could jeopardize Imagimed's existence, taking unreasonable and inconsistent positions on the interpretation of the Policy in order to force Imagimed to accept less than it is entitled to under the Policy, taking positions that are designed to reduce the amount it has to pay under the Policy and claiming that its bad faith conduct is shielded from scrutiny by a settlement privilege.

48. Upon information and belief, Westchester's strategy and tactics are part of a pattern of bad faith.

49. As a result of Westchester's bad faith, Imagimed has been damaged. That damage includes, without limitation, amounts Imagimed paid attorneys as a result of Westchester's refusal to pay the full amount of the invoices submitted by those attorneys during the course of the government investigation, the cost of the litigation with Dr. Wolf, amounts Imagimed has paid attorneys in an effort to obtain Westchester's compliance with its obligations under the Policy and the costs of this lawsuit.

50. In addition, because Westchester's conduct is wanton and willful and part of a pattern and practice directed at the general public, Imagimed is entitled to recover punitive damages.

WHEREFORE, Imagimed demands judgment as follows:

1. A declaration that Westchester is obligated to fund Imagimed's settlement with the government in the amount of $490,000 and to pay any attorneys' fees incurred on behalf of Imagimed in connection with the government investigation that have not been paid to date.

2. An order requiring Westchester to fund Imagimed's settlement with the government.

3. Damages in an amount to be determined at trial but in any event exceeding $1 million.

4 Punitive damages in an amount to be determined at trial.

5. The costs and expenses of this litigation, including attorney's fees.

6. Such other and further relief as the 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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