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

WESTCHESTER FIRE INSURANCE COMPANY v. BELLATOR SPORT WORLDWIDE, INC. et al

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: 
1:11-cv-08831 Search Pacer
ACE Group party(s): 
Opposing Party: 
Westchester Fire Insurance Company
Court Type: 
Federal
US District Court: 
Northern District of Illinois
Date Filed: 
Dec 13 2011

"COUNT I – TRADE SECRET EXCLUSION PRECLUDES COVERAGE

23. WESTCHESTER incorporates and restates each and every allegation set forth in paragraphs 1.-22. of this Complaint as if alleged in this paragraph 23.

24. BELLATOR seeks coverage under Insuring Clause A3 of the Policy, which generally affords coverage to BELLATOR for Loss by reason of a Claim first made against BELLATOR during the Policy Period, and reported to WESTCHESTER pursuant to subsection E1 of the Policy, for a Wrongful Act taking place prior to the end of the Policy Period. Such coverage is also subject to various other terms, conditions and exclusions as set forth in the Policy.

25. The Policy provides under Exclusion 2.b), as applicable to Insuring Clause A3, that WESTCHESTER “shall not be liable for Loss on account of any Claim:”

b) alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving:
(i) any actual or alleged infringement, misappropriation, or violation of copyright, patent, service marks, trademarks, trade secrets, title or other proprietary or licensing rights or intellectual property of any products, technologies or services;

26. The Complaint in the Underlying Lawsuit seeks relief “alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving:” the misappropriation or violation of copyright, trade secrets, intellectual property and/or other proprietary or licensing rights.

27. Therefore, Exclusion 2.b) applies to preclude coverage to BELLATOR for the Underlying Lawsuit under the Policy.

WHEREFORE, WESTCHESTER respectfully requests that this Court enter judgment in its favor and against BELLATOR and ZUFFA, declaring that Exclusion 2.b) applies to preclude coverage to BELLATOR under the Policy for the Underlying Lawsuit, and therefore WESTCHESTER has no duty to defend or indemnify BELLATOR under the Policy for the Underlying Lawsuit.

COUNT II – BELLATOR FAILED TO PROVIDE TIMELY NOTICE OF THE LAWSUIT PURSUANT TO SUBSECTION E1

28. WESTCHESTER incorporates and restates each and every allegation set forth in paragraphs 1.-24. of this Complaint as if alleged in this paragraph 28.

29. The Policy provides under subsection E1 as follows:

E. Notification
1. The Insureds shall, as a condition precedent to their rights to payment under this Coverage Section only, give Insurer written notice of any Claim as soon as practicable after the Company’s general counsel, risk manager, chief executive offer or chief financial officer (or equivalent positions) first becomes aware of such Claim, but in no event later than sixty (60) days after the end of the Policy Period, or respecting any Claim first made against the Insureds during the Extended Period, if purchased, sixty (60) days after the end of the Extended Period.

30. The Underlying Lawsuit was filed on July 28, 2010.

31. Between July 28, 2010 and January 24, 2011, BELLATOR removed the Underlying Lawsuit to federal court, filed and fully briefed a motion to dismiss and received an adverse ruling on its motion to dismiss.

32. BELLATOR first provided notice of the Underlying Lawsuit to WESTCHESTER on or about January 25, 2011.

33. BELLATOR failed to report the Underlying Lawsuit “as soon as practicable” after it first became aware of the Underlying Lawsuit.

34. Therefore, BELLATOR failed to comply with the “condition precedent” set forth in E1 of the Policy, such that no coverage is afforded to BELLATOR under the Policy for the Lawsuit.

WHEREFORE, WESTCHESTER respectfully requests that this Court enter judgment in its favor and against BELLATOR and ZUFFA, declaring that BELLATOR failed to satisfy the notice condition to coverage under subsection E1 of the Policy with respect to the Underlying Lawsuit, and therefore WESTCHESTER has no duty to defend or indemnify BELLATOR under the Policy for the Underlying Lawsuit.

COUNT III – COVERAGE PRECLUDED FOR ALL EXPENSES INCURRED IN VIOLATION OF SUBSECTION F3

35. WESTCHESTER incorporates and restates each and every allegation set forth in paragraphs 1.-32. of this Complaint as if alleged in this paragraph 35.

36. The Policy provides under subsection F3 as follows: F. SETTLEMENT AND DEFENSE The Insureds agree not to settle or offer to settle any Claim, incur any Costs, Charges and Expenses or otherwise assume any contractual obligation or admit any liability with respect to any Claim without the prior written consent of the Insurer, such consent not to be unreasonably withheld. The Insurer shall not be liable for any settlement, Costs, Charges and Expenses, assumed obligation or admission to which it has not consented. The Insureds shall promptly send to the Insurer all settlement demands or offers received by any Insured from the claimant(s).

37. The Underlying Lawsuit was filed on July 28, 2010, and BELLATOR undertook its own defense of the matter thereafter.

38. BELLATOR first provided notice of the Underlying Lawsuit to WESTCHESTER on or about January 25, 2011.

39. Any Costs, Charges and Expenses or other fees, costs or expenses of any kind incurred by BELLATOR in violation of subsection F3 of the Policy are not subject to coverage under the Policy, including specifically all Costs, Charges and Expenses or other fees, costs or expenses of any kind incurred by or on behalf of BELLATOR prior to the date it provided notice of the Underlying Lawsuit to WESTCHESTER.

WHEREFORE, WESTCHESTER respectfully requests that this Court enter judgment in its favor and against BELLATOR and ZUFFA, declaring that no coverage is afforded to BELLATOR for any Costs, Charges and Expenses or any other fees, costs or expenses of any kind, prior to the date upon which WESTCHESTER received notice of the Lawsuit, or which were otherwise incurred in violation of subsection F3 of the Policy."

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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