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

KIMERLING et al 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: 
2:14-cv-01903 Search Pacer
ACE Group party(s): 
Opposing Party: 
Jonathan L Kimerling
Court Type: 
Federal
US District Court: 
Northern District of Alabama
Date Filed: 
Oct 7 2014

THIRD-PARTY COMPLAINT

Defendants/third party plaintiffs Jonathan L. Kimerling, William A. Ochsenhirt, III, and
Inverness Holdings, LLC d/b/a Inverness Country Club, ("Defendants/Third Party Plaintiffs"),
pursuant to Rule 14(a) of the Alabama Rules of Civil Procedure, state the following third party
complaint against third party defendant Westchester Fire Insurance Company a/k/a ACE
Westchester Fire Insurance Company ("Westchester"):

PARTIES
1. Defendant/Third Party Plaintiff Jonathan L. Kimerling is an adult resident citizen
of Jefferson County, Alabama. Kimerling is a member, officer and/or director of Heatherwood
Holdings, LLC, and Inverness Holdings, LLC.
2. Defendant/Third Party Plaintiff William A. Ochsenhirt, III is an adult resident
citizen of Shelby County, Alabama. Ochsenhirt is a member, officer and/or director of
Heatherwood Holdings, LLC, and Inverness Holdings, LLC.
3. Defendant/Third Party Plaintiff Inverness Holdings, LLC, is an Alabama limited
liability company with its principal place of business in Birmingham, Alabama.
4. Third party defendant WESTCHESTER is a foreign corporation registered to do
business and conducting business in the State of Alabama, including Shelby County.
JURISDICTION AND VENUE
5. This court has subject matter jurisdiction over this action because
Defendants'/Third Party Plaintiffs' claims are founded on state law and the amount in controversy
exceeds the jurisdictional minimum of this Court.
6. Venue is proper in this Court pursuant to Ala. Code § 6-3-7(a)(l) because a
substantial part of the events or omissions giving rise to this cause of action occurred in Shelby
County, Alabama.

FACTUAL ALLEGATIONS
7. Defendants/Third Party Plaintiffs are fully insured for the types of risks and
litigation costs arising from the claims asserted by the plaintiffs in these consolidated lawsuits
through separate policies of insurance issued by Westchester to certain named defendants and
covering those defendants as well as related persons and entities, including, without limitation, the
following policies:
A. Westchester policy number BMI20059101 issued to Inverness Holdings,
LLC ("Inverness Policy"); and
B. Westchester policy number BM120059100 issued to Heatherwood
Holdings, LLC ("Heatherwood Policy").
8. Plaintiffs in these consolidated actions have asserted claims against the
Defendants/Third Party Plaintiffs for tortious interference with a business relationship, conspiracy,
fraud, negligence, wantonness, and fraudulent suppression. Plaintiffs allege that defendants
Kimerling and Ochsenhirt have acted improperly in their capacity as members, officers and
directors of both Heatherwood Holdings, LLC, and Inverness Holdings, LLC.
9. Defendants/Third Party Plaintiffs timely provided proper notice of these
consolidated lawsuits to Westchester, and have demanded coverage.
10. Citing various reasons, Westchester has refused to acknowledge or accept its full
coverage and defense obligations, or has otherwise wrongfully failed and refused to provide full
indemnity protection to Defendants/Third Party Plaintiffs for the claims asserted by the plaintiffs.
11. While Westchester has tendered a defense to some of the defendants under the
Inverness Policy, Westchester has failed or refused to settle these consolidated actions, despite
Defendants'/Third Party Plaintiffs' demand that Westchester do so.
12. Westchester has failed or refused to fully defend and indemnify the
Defendants/Third Party Plaintiffs under the Heatherwood Policy, and also failed or refused to
settle these consolidated actions, despite Defendants '/Third Party Plaintiffs' demand that
Westchester do so. While Westchester previously tendered a defense to Heatherwood Holdings,
LLC in separate and now-concluded bankruptcy proceedings, Westchester has failed or refused to
defend and indemnify Heatherwood's members, officers and directors (Kimerling and Ochsenhirt)
in these consolidated actions.
13. Westchester's actions demonstrate a greater concern for its own monetary interest
than for its insureds' financial risk.
14. Both the Inverness Policy and Heatherwood Policy are "defense within limits" or
"eroding coverage" policies, pursuant to which the costs of defense are deducted from policy
limits. Under such policies, every dollar spent on the defense of a claim reduces the policy limit
by the same amount. Therefore, the longer this litigation continues, the fewer funds are available
for resolution or settlement of these consolidated actions. To date, a substantial portion of the
subject insurance proceeds have been spent defending these consolidated lawsuits, which have
been pending since 2008 and 2009, respectively.
15. Westchester has further failed or refused to fully inform its insureds about such
matters as: the grounds for Westchester's defense under a reservation of rights, saying nothing
about potential coverage defenses between its initial reservation of rights, and then sending a
belated reservation of rights letter just prior to the first trial; and developments relating to policy
coverage, specifically the erosion and available limits remaining for the consolidated lawsuits.

COUNT ONE
DECLARATORY JUDGMENT
16. Defendants/Third Party Plaintiffs adopt and incorporate each of the foregoing
paragraphs as if fully set forth herein.
17. There exists a legitimate dispute between the parties of the amounts owed by
Westchester to Defendants/Third Party Plaintiffs for coverage, defense and indemnity under the
Heatherwood Policy and Inverness Policy.
WHEREFORE, Defendants/Third Party Plaintiffs demand a judgment declaring
Westchester's obligations under the subject insurance contracts, amounts owed to
Defendants/Third Party Plaintiffs, and such other and further relief to which Defendants/Third
Party Plaintiffs may be entitled.

COUNT TWO
BREACH OF CONTRACT
18. Defendants/Third Party Plaintiffs adopt and incorporate each of the foregoing
paragraphs as if fully set forth herein.
19. The policies of insurance issued by Westchester were intended by the parties to
provide coverage to the Defendants/Third Party Plaintiffs for all of the risks and costs arising from
the allegations asserted by the plaintiffs in these consolidated actions.
20. Westchester has breached its contractual obligations under the respective insurance
policies by, without limitation: failing or refusing to provide full coverage and indemnity
protection to the Defendants/Third Party Plaintiffs for the claims in these consolidated actions;
failing or refusing to settle these consolidated lawsuits and instead continuing to allow the erosion
of policy limits by the amount of defense costs; and failing or refusing to keep its insureds fully
informed about such matters as the bases for Westchester's defense under a reservation of rights,
developments relating to policy coverage, and progress of the lawsuit.
21. As a result of Westchester's breach of the respective insurance contracts,
Defendants/Third Party Plaintiffs have suffered damages.
WHEREFORE, the Defendants/Third Party Plaintiffs demand a judgment against
Westchester in an amount to be determined by the trier of fact, plus interest, costs, attorneys' fees,
and such other and further relief as the Court deems just and proper.

COUNT THREE
BAD FAITH FAILURE OR REFUSAL TO DEFEND AND INDEMNIFY
22. Defendants/Third Party Plaintiffs adopt and incorporate each of the foregoing
paragraphs as if fully set forth herein.
23. An insurance contract exists between Westchester and Heatherwood Holdings,
LLC which provides coverage to Heatherwood's directors and officers, including Kimerling and
Ochsenhirt.
24. An insurance contract exists between Westchester and Inverness Holdings, LLC,
which provides coverage to Inverness' directors and officers, including Kimerling and Ochsenhirt.
25. Kimerling and Ochsenhirt have been sued in these consolidated cases for certain
alleged actions they took in their capacity as Heatherwood members, officers and directors.
Kimerling and Ochsenhirt have also been sued for certain alleged actions they took in their
capacity as Inverness members, officers and directors.
26. Under the terms of the Heatherwood Policy, Westchester is obligated to defend and
indemnify Heatherwood's and Inverness' members, officers and directors, Kimerling and
Ochsenhirt.
27. Westchester has intentionally failed or refused to fully pay Defendants' claim,
without any reasonably legitimate or arguable reason for said refusal. Westchester has acted in
bad faith by, without limitation: failing or refusing to provide full coverage and indemnity
protection to the Defendants/Third Party Plaintiffs for the claims in these consolidated actions;
failing or refusing to settle these consolidated lawsuits and instead continuing to allow the erosion
of policy limits by the amount of defense costs; and failing or refusing to keep its insureds fully
informed about such matters as the bases for Westchester's defense under a reservation of rights,
developments relating to policy coverage, and progress of the lawsuit.
28. Westchester's actions demonstrate that it has a greater concern for its monetary
interest than it does for its insureds' financial risk.
29. Westchester had actual knowledge that there was no reasonably legitimate,
arguable or debatable reason for its failure or refusal to fully defend and indemnify its insureds
under the subject policies.
30. As a result of Westchester's bad faith, Defendants/Third Party Plaintiffs have
Suffered damages, including attorneys' fees and other defense costs.
WHEREFORE, the Defendants/Third Party Plaintiffs demand a judgment against
Westchester in an amount to be determined by the trier of fact, plus punitive damages, interest,
costs, attorneys' fees, and such other and further relief as the Court deems just and proper.

COUNT FOUR
NEGLIGENT OR BAD FAITH FAILURE OR REFUSAL TO SETTLE
31. Defendants/Third Party Plaintiffs adopt and incorporate each of the foregoing
paragraphs as if fully set forth herein.
32. Westchester has tendered a defense under the Inverness Policy to certain
defendants, under a reservation of rights. As such, Westchester has an enhanced obligation of
good faith toward its insureds in conducting said defense.
33. Westchester previously tendered a defense under the Heatherwood Policy pursuant
to a reservation of rights. As such, Westchester has an enhanced obligation of good faith toward
its insureds in conducting said defense.
34. Westchester has failed or refused to settle these consolidated actions, despite its
insureds' demand that it do so. Westchester has demonstrated a greater concern for its monetary
interest than for its insureds' financial risk.
35. The Inverness Policy and Heatherwood Policy are eroding policies wherein the
policy limits are continually being reduced by defense costs. As such, the amounts available to
settle these consolidated actions continues to erode and reduce the longer Westchester fails or
refuses to settle this matter.
36. As a result of Westchester's negligent or bad faith failure to settle,
Defendants/Third Party Plaintiffs have been damaged by, without limitation, continuing to incur
defense costs and reducing the available policy limits, and risking an adverse verdict at trial.
WHEREFORE, the Defendants/Third Party Plaintiffs demand a judgment against
Westchester in an amount to be determined by the trier of fact, plus punitive damages, interest,
costs, attorneys' fees, and 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.

Javascript is required to view this map.