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

PREMIER COMMUNITIES, INC. 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: 
2:12-cv-00934 Search Pacer
ACE Group party(s): 
Opposing Party: 
Premier Communities, Inc.
Court Type: 
Federal
US District Court: 
Western District of Washington
Date Filed: 
May 31 2012

"7. Agreement Between Premier and BMHC. Premier entered into a Trade Contractor Agreement with Building Materials Holding Corporation ("BMHC") on or around September 29,2005. The Agreement covered all Premier projects in Washington State. Among other things, the Agreement required BMHC to maintain liability insurance and to name Premier as a primary additional insured. BMHC provided Premier with a certificate of insurance identifying Premier as an additional insured under Ace general liability policy no. XSLG2373560A, effective November 11, 2007 to November 11,2008 ("the Policy").

8. Agreement Between Premier and BMC West. Premier entered into a Trade Contractor Agreement with BMC West Corporation ("BMC West") on or around March 1,2007. The Agreement covered all Premier projects in Washington State. Among other things, the Agreement required BMC West to maintain liability insurance and to name Premier as a primary additional insured. BMC West provided Premier with a certificate of insurance identifying Premier as an additional insured under the Policy.

9. The Ace Policy .. Ace issued policy no. XSLG 2373560A to BMHC and BMC West, effective November 11,2007, to November 11, 2008. A copy ofthe Policy is attached to this pleading as Exhibit A and the terms are incorporated herein.

10. Project. Premier was the general contractor for the construction of a housing development in Pierce County, Washington. BMHC and BMC West served as subcontractors on that project under their respective Trade Contractor Agreements with Premier. One of the houses in that housing development was at 6501 Elaine Avenue Southeast; North Tapps Estates, Pierce County, Washington.

11. Suit. On or about December 2, 2010, Francisco Zuniga filed a lawsuit in Pierce County Superior Court under cause no. 10-2-15563-1 against Premier, BMHC and BMC West ("Zuniga suit"). A copy of the complaint in the Zuniga suit is attached hereto as Exhibit B. The Zuniga suit is going to trial on June 18, 2012, and it is for this reason that Premier requests a speedy hearing of this Declaratory Judgment Action. In his complaint, Zuniga alleged that, while employed by BMHC or BMC West, he was injured when he fell at the Project on January 30, 2008. Zuniga claimed Premier is liable for damages because it acted with negligence and failed to enforce safety regulations at the Worksite. He also claimed that BMHC and BMC West are liable for damages because they failed to establish, enforce, and comply with safety regulations. Zuniga seeks millions of dollars for his injuries. Zuniga later agreed to dismiss BMHC and BMC West from the Zuniga suit without prejudice based onBMHC and BMC West's bankruptcy.

12. Tender. On March 3, 2011, Premier tendered defense and indemnity of the Zuniga suit to Ace under the Policy. It also requested a copy of the Policy and all other documents regarding coverage available to Premier.

13. Ace's Response to Premier's Tender. On June 14, 2011, Ace responded to Premier's tender, refusing to defend or indemnify Premier in the Zuniga suit and refusing to produce the Policy. After several more letters back and forth between Premier and Ace, Ace produced a copy of the Policy in early October 2011.

14. Ace's Reservation of Rights. On October 31, 2011, Ace accepted Premier's tender subject to a full and complete reservation of rights. Since then, Ace has not participated in any way in the defense or attempted settlement of the Zuniga suit, including failing to attend or participate in a mediation held April 2, 2012.

15. Ace's Coverage. The Ace policy is a "fronting policy," which means typically the named insured is self-insured for the whole amount of the policy. But Ace named insureds BMHC and BMC West entered into a Chapter 11 bankruptcy reorganization plan approved December 14, 2009 that included a discharge of the claim that became the Zuniga suit.
a. Endorsement no. 8 of the Policy provides that Premier is an additional insured with respect to liability for bodily injury caused in whole or in part by BMHC or BMC West's acts or omissions, and Zuniga claimed BMCH and BMC West were partially at fault for his injuries, triggering coverage for Premier under this endorsement;
b. Endorsement no. 61 of the Policy provides that if the named insured is unable to pay the Deductible amount ($1,900,000) or any portion thereof, Ace has an obligation to pay damages to satisfy a judgment or pay a settlement that includes the Deductible amount or any portion of it. Because BMHC and BMC West are unable to pay the claim that became the Zuniga suit when that claim was discharged in bankruptcy, it is Ace's obligation to pay damages for its named insureds in the Zuniga suit.
c. The Policy includes a provision under section IV, Conditions which states, "Bankruptcy or insolvency of the insured ... will not relieve us of our obligations under this policy." Ace remains liable to pay on behalf of BMHC and BMC West notwithstanding their bankruptcy; and
d. As required in Premier's Trade Contractor Agreements with BMHC and BMC West, the Policy is to provide primary coverage to Premier."

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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