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

MBIA Inc. v. Federal 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 or contact the clerk of the relevant court.

Case Number: 
08-cv-4313 Search Pacer
ACE Group party(s): 
Opposing Party: 
Court Type: 
US District Court: 
United States. Court of Appeals (2nd Circuit)
Date Filed: 
Jan 28 2010

"On May 21,2008, MBIA, Inc. ("Plaintiff' or "MBIA") filed an amended complaint against Federal Insurance Co. ("Federal") and ACE American Insurance Co. ("ACE) (collectively, "Defendants"), alleging breach of contract and seeking a declaratory judgment that Defendants are obligated to reimburse Plaintiff for legal fees and other related costs associated with regulatory investigations and derivative actions under two insurance policies, an Executive Liability and Indemnification Policy (No. 7023-4558) between Plaintiff and Federal, dated July 23,2004 ("Federal Policy"), and an Integrated Excess Insurance Policy (No. DOX G21670029 00 1) between Plaintiff and ACE, dated August 24,2004 ("ACE Policy") (collectively, "Policies"). (Am. Compl., dated May 21,2008,11 1-4.)

On August 2 1,2009, Plaintiff moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."), arguing, among other things, that the Policies contain broad language that covers "costs" Plaintiff has incurred in responding to: (1) the investigation commenced by the issuance of a subpoena on November 18,2004 by the Office of the New York State Attorney General ("NYAG); (2) the U.S. Securities and Exchange Commission ("SEC") investigation and NYAG investigation of Plaintiffs investment in Capital Asset Holding GP, Inc. ("Capital Asset Transaction") and Plaintiffs exposure on notes issued by the US Airways 1998-1 Repackaging Trust ("US Airways Transaction"); (3) an Independent Consultant's investigation that was required under settlements reached with the SEC and NYAG; and (4) two derivative actions brought by MBIA shareholders on November 9,2005 and April 24,2006, respectively. (Mem. in Supp. of Pl.'s Mot. for Summ. J., dated Aug. 21,2009 ("Pl. Mot."), at 15-25.)

On October 1,2009, Defendants filed a cross-motion for summary judgment, arguing that the costs claimed by Plaintiff are not covered under the Policies because, among other reasons: (1) "NYAG subpoenas are not 'orders"'; (2) MBIA produced documents relating to the Capital Asset and US Airways Transactions in response to "informal requests" by the SEC and NYAG that do not amount to Securities Claims under the Policies; (3) Plaintiff did not give Defendants "the opportunity to effectively associate" with Plaintiff regarding the Independent Consultant's activities; and (4) regarding the derivative actions, the law firm of Dickstein Shapiro LLP ("Dickstein") represented an entity called the Special Litigation Committee "which was not an Insured." (Mem. in Supp. of Defs.' Mot. for Summ. J. & in Opp'n to Pl. 's Mot. for Summ. J., dated Oct. 1, 2009 ("Defs. Mot."), at 6-24 (emphasis omitted).)

On October 15,2009, Plaintiff filed a reply. (PI. Reply Mem. in Further Supp. of Mot. for Summ. J. & in Opp'n to Defs. Mot., dated Oct. 15,2009 ("Pl. Reply").) On October 29, 2009, Defendants filed a reply. (Reply in Supp. of Defs. Mot. & in Suneply to P1. Reply, dated

Oct. 29,2009 ("Defs. Reply").) The Court heard oral argument on December 22,2009. (aTr . of Proceedings, dated Dec. 22,2009 ("Hr'g Tr.").) ' Also on December 22,2009, ACE submitted a declaration "as support of assertions of fact made . . . in oral argument," (Second Supplemental Declaration of Alan Joaquin, dated Dec. 22,2009, ("Second Suppl. Joaquin Decl.")), to which Plaintiff submitted a response on December 24,2009, (Response to Second Suppl. Joaquin Decl., dated Dec. 24,2009, ("Pl. Resp.").)"

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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