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

STANDEX INTERNATIONAL CORPORATION v. ACE AMERICAN INSURANCE COMPANY

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Case Number: 
1:15-cv-00263 Search Pacer
Opposing Party: 
Standex International Corporation
Court Type: 
Federal
US District Court: 
District of New Hampshire
Date Filed: 
Jul 7 2015

PLAINTIFF’S COMPLAINT FOR DECLARATORY JUDGMENT

NOW COMES Standex International Corporation and complains against ACE
American Insurance Company, an insurance company licensed to do business in New
Hampshire. The Plaintiff complains as follows (and invokes this Court’s authority
pursuant to R.S A 491:22):
1. Standex International Corporation (“Standex”) is a foreign corporation with a
principal place of business at 11 Keewaydin Drive, Salem, NH, 03079.
2. ACE American Insurance Company is a provider of property and casualty
insurance licensed to do business in New Hampshire. It maintains an office
address at 1601 Chestnut Street in Philadelphia, PA. During the periods relevant
herein, it provided a “Workers Compensation and Employers Liability Insurance
Policy” to Standex (policy WLR C4 438255-6), hereinafter “Workers
Compensation Policy."
3. The Piaintiff suffered an insurable loss under the above-referenced policy when a
Massachusetts employee (referenced as John Doe for the purposes of this
Complaint) incurred a serious workplace injury on March 14, 2011.

I. Facts and Proceedings

4. As of January 7, 2015, the total paid amount on the claim was approximately
$443,000.00, but the claim is not closed. Further, approximately $253,500.00
had been recovered via lien rights on third-party recoveries.
5. The Workers Compensation Policy featured a one-page "Deductible
Endorsement” providing that ACE would pay all workers compensation benefits in
the first instance and that Standex would “reimburse us [ACE] for all payments
we make on your behalf as [workers compensation] benefits . . . up to the amount
of the Deductible Limits shown in the Schedule" (emphasis added). The
Deductible Limit as shown in the schedule was $500,000.00.
6. By email dated January 7, 2015, ACE advised Standex that, in the event the total
workers compensation claim amount exceeded the deductible amount (in effect
ending ACE’s right to reimbursement), ACE would claim it had a priority right to
any lien recovery such that the lien recovery would first be applied to any
amounts paid by ACE in excess of the deductible. In effect, ACE claimed that a
lien recovery would benefit Standex only to the extent lien funds remained after
ACE had reimbursed itself for amounts it had paid in excess of the deductible.
ACE thereby claimed a priority interest (over Standex) in any lien recovery.
7. ACE’s claimed priority with respect to allocating the benefits of third-party lien
recoveries is not supported by any provision in the deductible endorsement or
any other provision in the policy. In fact, the language in the deductible
endorsement favors priority for Standex, insofar as it provides that the deductible
is satisfied once ACE has made workers compensation claim payments in the
amount of the deductible limit. There is no policy provision stating that, for
purposes of the deductible, lien recoveries are to be applied first and foremost to
reduce the loss exposure of ACE at the potential expense of Standex. There is
no express policy provision specifying which party to the insurance contract will
have a priority with respect to lien recoveries.
8. Standex anticipates that the total workers compensation benefits paid will be of
such an amount that the manner of allocation of any lien recoveries will
significantly affect the amount it pays under the deductible endorsement.

II. Claims for Relief

9. Plaintiff repleads the prior allegations insofar as relevant.
10. The Deductible Endorsement supplied in the ACE policy does not support ACE’s
claim for priority with respect to the funds made available by lien recoveries, and
ACE’s position is without support in the policy.
11. As written, the policy supports a priority for Standex, as the endorsement, read
literally, provides that the duty of Standex to reimburse ends when the claimant’s
benefits reach the limit of the deductible.
12. If the policy is viewed as ambiguous, then the matter should be resolved against
ACE, the drafter and provider of the policy.
13. Insurers intending to claim a priority in circumstances such as exist here do so by
adding special language to the deductible endorsement providing expressly for
such a priority. Endorsements “change” the meaning of a policy, so the
prevalence of an insurer-favorable endorsement on the matter of priority is a
strong indication that a policy without such an endorsement is not insurerfavorable.
14. ACE has asserted its entitlement to priority without identifying any policy
language or provision supporting such a priority.
15. Pursuant to R.S.A. 491:22-a, it is ACE that has the burden of proving its
coverage position, and to date ACE has offered no proof whatsoever, either by
reference to the policy, statute, or case law.
16. Pursuant to R.S.A. 491:22-b, Standex, should it be the prevailing party, is entitled
to its costs and reasonable attorneys’ fees in pursuing this action.
Wherefore, Plaintiff requests:
a) That this Court declare that the defendant ACE must accord Standex
priority with respect to the effect of lien recoveries upon the policy
deductible;
b) That the defendants be required to file with this Court a certified copy of
the insurance policy in question;
c) That it be awarded costs and attorney fees, in accordance with the New
Hampshire statutes (R.S.A. 491:22); and,
d) That it be awarded all such other and further relief as this Court deems
equitable and just.

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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