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

LEXINGTON INSURANCE COMPANY v. ACE AMERICAN 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: 
4:12-cv-00531 Search Pacer
ACE Group party(s): 
Opposing Party: 
Lexington Insurance Company
Court Type: 
Federal
US District Court: 
Southern District of Texas
Date Filed: 
Feb 22 2012

"17. The underlying lawsuits allege that the defendants, including the MEP Parties and Mustang, were negligent in the following acts or omissions:
a. failure to perform a proper visual line inspection of the pipeline before pressure testing; failure to properly conduct pressure testing of the pipeline;
b. failure to supervise the pressure testing of the pipeline;
c. failure to properly service and direct the opening and closing of the separator door;
d. failure to safely design and engineer the separator and its door;
e. failure to warn of the dangers associated with opening and closing the separator door; and
f. failure to inform the underlying plaintiffs that the test pressure had been reached or 50% of the test pressure had been reached and to move beyond the perimeter.
18. Lexington agreed to defend the MEP Parties in the underlying lawsuits under a reservation of rights. To date, Lexington has incurred substantial costs and expenses as the sole insurer to undertake its obligations to defend the MEP Parties in the underlying lawsuits.
19. Lexington, through counsel, tendered the defense of the MEP Parties to ACE American on July 29, 2011. Nearly seven months later, on February 13, 2012, ACE American denied coverage for the MEP Parties as additional insureds under the ACE American Policy and refused to defend the MEP Parties in the underlying lawsuits.

CLAIM FOR RELIEF
20. Plaintiff incorporates by reference the allegations set forth in paragraphs 1 through 19 and realleges those allegations as if fully set forth herein.

21. A dispute has arisen between Plaintiff and ACE American with respect to whether the MEP Parties are additional insureds and entitled to coverage under the ACE American Policy, and whether ACE American is liable for contribution for the defense costs incurred by Lexington in the defense of the MEP parties.

22. Plaintiff has taken the position that the MEP Parties are additional insureds under the ACE American Policy because the PSA requires that Mustang’s insurance policies, including the ACE American Policy, name the MEP Parties as additional insureds. Plaintiff further contends that Endorsement 20 to the ACE American Policy expressly provides additional insured status to the MEP Parties as parties to whom Mustang was obligated by written agreement to provide insurance.

23. Plaintiff has also taken the position that ACE American owed and continues toowe the MEP Parties, as additional insureds, a defense in the underlying lawsuits. Plaintiff contends that, because of the defense obligation under the ACE American Policy, ACE American owes contribution for past and future defense costs and expenses to Lexington who has exclusively shouldered, and continues to bear, the cost and expense of defending the MEP
Parties in the underlying lawsuits.

24. Plaintiff contends that the ACE American Policy is primary to the Lexington Policies, and, as such, is liable to Lexington for all defense costs and expenses incurred in the Plaintiff’s Original Complaint for Declaratory Judgment defense of the MEP Parties. In the alternative, Plaintiff contends that the defense costs and expenses incurred in defending the MEP Parties should be shared between Plaintiff and Defendant on a pro rata basis.

CONCLUSION AND PRAYER

25. Lexington respectfully asks this Court for a judgment that (1) the MEP Parties are additional insureds under the ACE American Policy; (2) ACE American owes a defense to the MEP Parties; and (3) ACE American is liable to Lexington for all costs and expenses that have been and will be incurred for the defense of the MEP Parties in the underlying lawsuits, or, in the alternative, that ACE American is liable to Lexington for contribution, on a pro rata basis, for the cost and expense of defending the MEP Parties..

26. Lexington further asks for such other relief to which Lexington may be entitled in law or in equity."

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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