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

TRAVELERS CASUALTY AND SURETY COMPANY v. ACE PROPERTY & CASUALTY INSURANCE COMPANY et al

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Case Number: 
3:15-cv-00275 Search Pacer
Opposing Party: 
Travelers Casualty and Surety Company
Court Type: 
Federal
US District Court: 
Connecticut District Court
Date Filed: 
Feb 25 2015

COMPLAINT
I. PRELIMINARY STATEMENT
1. This is an action for breach of contract between the Plaintiff, Travelers Casualty
and Surety Company f/k/a The Aetna Casualty and Surety Company (“Travelers”) and six of its
reinsurers (“Defendants” or “Reinsurers”).
2. Travelers issued an insurance policy to United Nuclear Corporation (“United
Nuclear”), a company engaged in mining and other businesses.  Third parties asserted claims
against United Nuclear, alleging environmental loss or damage arising out of its mining and
waste disposal practices.  United Nuclear in turn made a claim for insurance coverage under its
policy with Travelers, and Travelers settled that coverage claim.   
3. Travelers reinsured the policy with the Defendants, six reinsurers who
participated in a reinsurance pool managed by the Carpenter Management Corporation (the
“CMC Pool”).  Accordingly, after Travelers made its payment to United Nuclear, it submitted
corresponding reinsurance billings to the Defendants.   
4. The Defendants have failed and refused to pay Travelers’ valid reinsurance
billings, thus breaching their reinsurance contracts.  In this action, Travelers seeks to recover the
$1,650,134.16 that the Defendants have wrongfully failed and refused to pay, along with interest
and the taxable costs of this action as more fully described in the prayer for relief.

II. THE PARTIES, JURISDICTION AND VENUE
5. The Plaintiff, Travelers, is a Connecticut corporation.  Travelers’ principal place
of business is in Connecticut.  Travelers was formerly known as The Aetna Casualty and Surety
Company.  Throughout this Complaint, the term “Travelers” shall refer to Travelers, Aetna
Casualty and Surety, or both, as context requires.   
6. The Defendant, ACE Property & Casualty Insurance Company (“ACE”), is a
Pennsylvania corporation.  ACE’s principal place of business is in Pennsylvania.  ACE is the
successor to and/or was formerly known as Aetna Insurance Company.  Through its participation
in the CMC Pool, ACE was a participating reinsurer in the reinsurance contracts referenced in
Paragraphs 21 and 22 below.  The reinsurance contracts were made and/or were to be performed
in the State of Connecticut.  ACE holds a license from the Connecticut Department of Insurance
to conduct insurance business in the State of Connecticut.  ACE repeatedly and systematically
conducts business in Connecticut.  This Court has personal jurisdiction over ACE.
7. The Defendant, Allstate Insurance Company (“Allstate”), is an Illinois
corporation.  Allstate’s principal place of business is in Illinois.  Through its participation in the
CMC Pool, Allstate was a participating reinsurer in the reinsurance contracts referenced in
Paragraphs 21 and 22 below.  The reinsurance contracts were made and/or were to be performed
in the State of Connecticut.  Allstate holds a license from the Connecticut Department of
Insurance to conduct insurance business in the State of Connecticut.  Allstate repeatedly and
systematically conducts business in Connecticut.  This Court has personal jurisdiction over
Allstate.
8. The Defendant, Arrowood Indemnity Company (“Arrowood”), is a Delaware
corporation.  Arrowood’s principal place of business is in North Carolina.  Arrowood is the
successor to and/or was formerly known as Royal Insurance Company of America.  Through its
participation in the CMC Pool, Arrowood was a participating reinsurer in the reinsurance
contracts referenced in Paragraphs 21 and 22 below.  The reinsurance contracts were made
and/or were to be performed in the State of Connecticut.  Arrowood holds a license from the
Connecticut Department of Insurance to conduct insurance business in the State of Connecticut.  
Arrowood repeatedly and systematically conducts business in Connecticut.  This Court has
personal jurisdiction over Arrowood.
9. The Defendant, Continental Casualty Company (“Continental”), is an Illinois
corporation.  Continental’s principal place of business is in Illinois.  Through its participation in
the CMC Pool, Continental was a participating reinsurer in the reinsurance contracts referenced
in Paragraphs 21 and 22 below.  The reinsurance contracts were made and/or were to be
performed in the State of Connecticut.  Continental holds a license from the Connecticut
Department of Insurance to conduct insurance business in the State of Connecticut.  Continental
repeatedly and systematically conducts business in Connecticut.  This Court has personal
jurisdiction over Continental.   
10. The Defendant, Insurance Company of North America (“INA”), is a Pennsylvania
corporation.  INA’s principal place of business is in Pennsylvania.  Through its participation in
the CMC Pool, INA was a participating reinsurer in the reinsurance contracts referenced in
Paragraphs 21 and 22 below.  The reinsurance contracts were made and/or were to be performed
in the State of Connecticut.  INA holds a license from the Connecticut Department of Insurance
to conduct insurance business in the State of Connecticut.  INA repeatedly and systematically
conducts business in Connecticut.  This Court has personal jurisdiction over INA.
11. The Defendant, OneBeacon America Insurance Company (“OneBeacon”), is a
Massachusetts corporation.  OneBeacon’s principal place of business is in Massachusetts.  
OneBeacon is the successor to and/or was formerly known as Employers Commercial Union
Insurance Company.  Through its participation in the CMC Pool, OneBeacon was a participating
reinsurer in the reinsurance contracts referenced in Paragraphs 21 and 22 below.  The
reinsurance contracts were made and/or were to be performed in the State of Connecticut.  
OneBeacon holds a license from the Connecticut Department of Insurance to conduct insurance
business in the State of Connecticut.  OneBeacon repeatedly and systematically conducts
business in Connecticut.  This Court has personal jurisdiction over OneBeacon.
12. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
§ 1332.  The action is between citizens of different states, and the amount in controversy
between the Plaintiff and each Defendant exceeds $75,000.00 excluding interest and costs.
13. This District is a proper venue for this action.  Each of the Defendants is a
corporation that is subject to personal jurisdiction in this District, and therefore pursuant to 28
U.S.C. § 1391(c)(2) each Defendant resides in this District for purposes of venue.

III. TRAVELERS’ INSURANCE OF UNITED NUCLEAR
14. Travelers issued an excess indemnity (umbrella) policy to United Nuclear that
bore policy number 01 XS 1589 WCA (the “United Nuclear Policy”).   
15. A number of entities made claims against United Nuclear, alleging environmental
loss or damage arising out of its mining and waste disposal practices.
16. United Nuclear sought coverage from Travelers under the United Nuclear Policy
for the claims referenced in Paragraph 15.
17. Travelers resolved United Nuclear’s coverage claims by way of a Confidential
Settlement Agreement and Release.
18. After entering into the Confidential Settlement and Release, Travelers paid a sum
of money to United Nuclear under the United Nuclear Policy.
19. Travelers sustained litigation and other expenses in the course of handling the
claims referenced in Paragraphs 16 and 17.  
 
IV. THE DEFENDANTS’ REINSURANCE OF TRAVELERS
20. Travelers reinsured the United Nuclear Policy under two reinsurance contracts.  
The reinsurance contracts were of a type known in the reinsurance industry as “facultative
certificates.”  Facultative certificates reinsure a single policy or risk, in contrast to “treaty”
reinsurance contracts, which reinsure an entire book of business or group of policies.
21. Through the CMC Pool, Travelers purchased a facultative certificate that bore
certificate number 7 00 11 06 (the “First Layer Certificate”).  Each of the Defendants, or their
predecessors, was a participating reinsurer in the First Layer Certificate.
22. Through the CMC Pool, Travelers purchased a facultative certificate that bore
certificate number 7 00 11 09 (the “Second Layer Certificate”).  Each of the Defendants, or their
predecessors, was a participating reinsurer in the Second Layer Certificate.
23. The Second Layer Certificate provides that “[a]ll claims covered by this
reinsurance when settled by [Travelers] shall be binding on the Reinsurers, who shall be bound
to pay their proportion of such settlements.”   
24. Upon information and belief, the First Layer Certificate contains a provision
identical to the one quoted in Paragraph 23.   
25. In November 2013 and December 2014, Travelers submitted reinsurance billings
to the Defendants through their current claims administrator, Excess Treaty Management
Corporation (“ETMC”).  The reinsurance billings were submitted under both the First Layer
Certificate and the Second Layer Certificate.  In the billings, Travelers requested that the
Defendants pay their share of the United Nuclear settlement sum referenced in Paragraph 18, and
of the litigation and other expenses referenced in Paragraph 19.
26. Through their claims administrator, ETMC, each of the Defendants has failed and
refused to pay Travelers’ valid reinsurance billings.

COUNT ONE – Breach of the First Layer Certificate Against ACE
27. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
28. The First Layer Certificate is a valid and binding contract between Travelers and
ACE.
29. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
30. Through ETMC, Travelers submitted valid reinsurance billings to ACE under the
First Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
31. Through ETMC, ACE wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
32. ACE’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes a
breach of the First Layer Certificate.
33. Travelers has been damaged by ACE’s breach of the First Layer Certificate, in an
amount not less than $157,907.58.

COUNT TWO – Breach of the Second Layer Certificate Against ACE
34. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
35. The Second Layer Certificate is a valid and binding contract between Travelers
and ACE.
36. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
37. Through ETMC, Travelers submitted valid reinsurance billings to ACE under the
Second Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
38. Through ETMC, ACE wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
39. ACE’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes a
breach of the Second Layer Certificate.
40. Travelers has been damaged by ACE’s breach of the Second Layer Certificate, in
an amount not less than $117,114.78.

COUNT THREE – Breach of the First Layer Certificate Against Allstate
41. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
42. The First Layer Certificate is a valid and binding contract between Travelers and
Allstate.
43. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
44. Through ETMC, Travelers submitted valid reinsurance billings to Allstate under
the First Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
45. Through ETMC, Allstate wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
46. Allstate’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes
a breach of the First Layer Certificate.
47. Travelers has been damaged by Allstate’s breach of the First Layer Certificate, in
an amount not less than $157,907.58.

COUNT FOUR – Breach of the Second Layer Certificate Against Allstate
48. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
49. The Second Layer Certificate is a valid and binding contract between Travelers
and Allstate.
50. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
51. Through ETMC, Travelers submitted valid reinsurance billings to Allstate under
the Second Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
52. Through ETMC, Allstate wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
53. Allstate’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes
a breach of the Second Layer Certificate.
54. Travelers has been damaged by Allstate’s breach of the Second Layer Certificate,
in an amount not less than $117,114.78.

COUNT FIVE – Breach of the First Layer Certificate Against Arrowood
55. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
56. The First Layer Certificate is a valid and binding contract between Travelers and
Arrowood.
57. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
58. Through ETMC, Travelers submitted valid reinsurance billings to Arrowood
under the First Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
59. Through ETMC, Arrowood wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
60. Arrowood’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the First Layer Certificate.
61. Travelers has been damaged by Arrowood’s breach of the First Layer Certificate,
in an amount not less than $78,953.79.

COUNT SIX – Breach of the Second Layer Certificate Against Arrowood
62. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
63. The Second Layer Certificate is a valid and binding contract between Travelers
and Arrowood.
64. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
65. Through ETMC, Travelers submitted valid reinsurance billings to Arrowood
under the Second Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
66. Through ETMC, Arrowood wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
67. Arrowood’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the Second Layer Certificate.
68. Travelers has been damaged by Arrowood’s breach of the Second Layer
Certificate, in an amount not less than $58,557.39.
COUNT SEVEN – Breach of the First Layer Certificate Against Continental
69. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
70. The First Layer Certificate is a valid and binding contract between Travelers and
Continental.
71. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
72. Through ETMC, Travelers submitted valid reinsurance billings to Continental
under the First Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
73. Through ETMC, Continental wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
74. Continental’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the First Layer Certificate.
75. Travelers has been damaged by Continental’s breach of the First Layer
Certificate, in an amount not less than $157,907.58.
COUNT EIGHT – Breach of the Second Layer Certificate Against Continental
76. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
77. The Second Layer Certificate is a valid and binding contract between Travelers
and Continental.
78. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
79. Through ETMC, Travelers submitted valid reinsurance billings to Continental
under the Second Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
80. Through ETMC, Continental wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
81. Continental’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the Second Layer Certificate.
82. Travelers has been damaged by Continental’s breach of the Second Layer
Certificate, in an amount not less than $117,114.78.
COUNT NINE – Breach of the First Layer Certificate Against INA
83. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
84. The First Layer Certificate is a valid and binding contract between Travelers and
INA.
85. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
86. Through ETMC, Travelers submitted valid reinsurance billings to INA under the
First Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
87. Through ETMC, INA wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
88. INA’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes a
breach of the First Layer Certificate.
89. Travelers has been damaged by INA’s breach of the First Layer Certificate, in an
amount not less than $236,861.37.
COUNT TEN – Breach of the Second Layer Certificate Against INA
90. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
91. The Second Layer Certificate is a valid and binding contract between Travelers
and INA.
92. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
93. Through ETMC, Travelers submitted valid reinsurance billings to INA under the
Second Layer Certificate, arising out of its settlement with United Nuclear and the associated
expenses referenced in Paragraph 19.
94. Through ETMC, INA wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
95. INA’s wrongful refusal to pay Travelers’ valid reinsurance billings constitutes a
breach of the Second Layer Certificate.
96. Travelers has been damaged by INA’s breach of the Second Layer Certificate, in
an amount not less than $175,672.17.
COUNT ELEVEN – Breach of the First Layer Certificate Against OneBeacon
97. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
98. The First Layer Certificate is a valid and binding contract between Travelers and
OneBeacon.
99. Travelers performed all of its conditions precedent to coverage under the First
Layer Certificate, including but not limited to the payment of premium.
100. Through ETMC, Travelers submitted valid reinsurance billings to OneBeacon
under the First Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
101. Through ETMC, OneBeacon wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
102. OneBeacon’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the First Layer Certificate.
103. Travelers has been damaged by OneBeacon’s breach of the First Layer
Certificate, in an amount not less than $157,907.58.
COUNT TWELVE – Breach of the Second Layer Certificate Against OneBeacon
104. Travelers repeats and realleges all of the allegations of Paragraphs 1 through 26 as
if fully set forth herein.
105. The Second Layer Certificate is a valid and binding contract between Travelers
and OneBeacon.
106. Travelers performed all of its conditions precedent to coverage under the Second
Layer Certificate, including but not limited to the payment of premium.
107. Through ETMC, Travelers submitted valid reinsurance billings to OneBeacon
under the Second Layer Certificate, arising out of its settlement with United Nuclear and the
associated expenses referenced in Paragraph 19.
108. Through ETMC, OneBeacon wrongfully refused to pay the reinsurance billings
referenced in the foregoing paragraph.
109. OneBeacon’s wrongful refusal to pay Travelers’ valid reinsurance billings
constitutes a breach of the Second Layer Certificate.
110. Travelers has been damaged by OneBeacon’s breach of the Second Layer
Certificate, in an amount not less than $117,114.78.

V. PRAYER FOR RELIEF
Wherefore, the plaintiff, Travelers Casualty and Surety Company f/k/a The Aetna
Casualty and Surety Company, respectfully prays for:
a. An award of money damages;
b. An award of pre-judgment interest;
c. An award of post-judgment interest;
d. The taxable costs of this action; and
e. Such other relief as the Court may see fit to award.

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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