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

WESTCHESTER SURPLUS LINES INSURANCE v. STRONGTOWER FINANCIAL 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: 
1:13-cv-00383 Search Pacer
Court Type: 
Federal
US District Court: 
Eastern District of California
Date Filed: 
Mar 14 2013

"FIRST CLAIM FOR RELIEF DECLARATORY RELIEF (F.R.C.P. Rule 57 and 28 U.S.C. § 2201)

35. Westchester incorporates paragraphs 1 through 34 as though separately stated herein.

36. An actual controversy has arisen and now exists between the parties relating to legal rights and duties of Westchester and the Insured Defendants for which Westchester desires a declaration of rights. Pursuant to the terms of the Policies, this dispute is governed by the substantive laws of the State of New York without application of conflicts of laws principals.

37. A declaratory judgment is necessary in that there is a dispute and disagreement between Westchester on the one hand and the Insured Defendants on the other hand (a) concerning the effectiveness of the Notice of Future Claims letter to relate Claims made and reported after the expiration of the First Policy back to the First Policy; (b) whether the Claimant Defendants claims herein constitute one Claim or more than one Claim (and consequently what is the applicable Self-Insured Retention); and (c) based on these points of dispute what are the appropriate policy limits.

38. Westchester contends that the Notice of Future Claims letter was ineffective to relate any of the Claimant Defendants' Claims herein back to the First Policy. As there have been no other Claims made and reported prior to the expiration of the First Policy, Westchester contends that the only applicable Policy Limits are those set forth in the Second Policy ($250,000) and hence Westchester seeks a declaration in this regard.

39. After there is judicial declaration that the Notice of Future Claims letter is ineffective, a declaratory judgment is additionally necessary in that there is dispute and disagreement between Westchester on the one hand and the Insured Defendants on the other hand as to:
a. Whether the liability of Westchester for Loss and Defense Costs for the Michels Claim and the Raynes Claim combined is $250,000 excess of the applicable Self- Insured Retention as those claims were first made and reported to Westchester during the policy period of Policy Two;
b. Whether Westchester owes any policy benefits to any Insured Defendant under Policy One or Policy Two for Loss and Defense Costs for the Gonzalez Claim and/or the Garrett Claim as those claims were first made and/or first reported to Westchester following the expiration of Policy Two.
c. In the event the court determines that the Raynes Claim and the Michels Claim arise out of the same Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim under the terms of the Policies, whether the Self- Insured Retention amount of $100,000 applies jointly and severally to the Insured Defendants Strongtower, Buchholz, Hirschfield, Winter, Jones and Westlake.
d. In the event the court determines that the Raynes Claim and the Michels Claim arise out of the same Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim under the terms of the Policies, whether Westchester is entitled to reimbursement of the Defense Costs paid in defense of the Raynes and Michels Claims up to $100,000 from Insured Defendants Strongtower, Buchholz, Hirschfield, Winter, Jones and Westlake where the applicable Self- Insured Retention has not been paid in its entirety;
e. In the event the Raynes Claim and the Michels Claim do not arise out of the same Wrongful Act or Interrelated Wrongful Acts, whether the Self-Insured Retention amount of $100,000 applies jointly and severally in each Claim to those Insured Defendants who are defendants or respondents in such claim;
f. In the event the court determines that the Raynes Claim and Michels Claim do not arise out of the same Wrongful Act or Interrelated Wrongful Acts, whether Westchester is entitled to reimbursement of the Defense Costs paid in defense of the Raynes Claim and defense of the Michels Claim up to $100,000 from the Insured Defendants who are defendants or respondents in each such claim where the applicable Self-Insured Retention has not been paid in its entirety.

40. In the event the court somehow determines that the Notice of Future Claims letter complied with the Notice requirements of the First Policy, a declaratory judgment is necessary in that there is dispute and disagreement between Westchester on the one hand and the Insured Defendants on the other hand as to the following:

a. Whether all claims set forth above, and which may in the future be claimed to be the subject of the Notice of Future Claims letter, arise out of the same
Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim to have been first made during the First Policy period;

b. Whether no coverage exists under the Second Policy for any of the claims set forth above because the wrongful acts alleged in any claim made during the Second Policy's policy period are the subject of the Notice of Future Claims letter;

c. Whether a single per claim limit of $500,000 applies to all claims referenced herein and all claims arising out of the wrongful acts referenced in the Notice of Future Claims letter;

d. Whether a single Self-Insured Retention of $100,000 applies to all the claims governed by the Notice of Future Claims letter;

e. Whether Westchester has any responsibility to pay Loss and Defense Costs of the Insured Defendants or any of them under the First Policy before the Insured Defendants have paid a total of $100,000 in Loss and Defense Costs as provided under the First Policy.

f Whether Westchester is entitled to reimbursement of the Defense Costs paid in defense of the claims set forth above up to $100,000 from the Insured Defendants and each of them where the applicable Self-Insured Retention has not been paid in its entirety.

41. In the event the court somehow determines that the Notice of Future Claims letter complied with the Notice requirements of the First Policy and that each claim set forth above is a separate claim, a declaratory judgment is necessary in that there is dispute and disagreement between Westchester on the one hand and the Insured Defendants on the other hand as to the following:

a. Whether a Self-Insured Retention of $100,000 applies to each and every claim set forth above, and that may be asserted in the future by Does 51-250 or any of them to the extent governed by the Notice of Future Claim letter;
b. Whether Westchester has any liability for Loss and Defense Costs under the First Policy in respect to each claim before the Insured Defendants in each such claim have collectively paid a total of $100,000 in Loss and Defense Costs;
c. Whether for each claim set forth above, Westchester is entitled to reimbursement of the Loss and Defense Costs paid on their behalf from the Insured Defendants and each of them who are defendants or respondents in such claim up to $100,000 where the applicable Self-Insured Retention has not been paid in its

SECOND CLAIM FOR RELIEF INTERPLEADER
(F.R.C.P. Rule 22)

42. Westchester incorporates paragraphs 1 through 34 above as though fully and separately stated herein.

43. If the court determines as Westchester contends that the Notice of Future Claims letter is ineffective to relate back to the First Policy any Claims actually made and reported to Westchester during or after the expiration of the Second Policy, then Westchester contends that its total liability for Loss and Defense Costs for the Raynes Claim and the Michels Claim is $250,000.

44. The Claimant Defendants and the Insured Defendants who are parties to the Raynes Claim and Claimant Defendants and the Insured Defendants who are parties to the Michels Claim constitute multiple adverse parties claiming benefits due from Westchester from the same limited fund of money. Westchester is informed and believes and on such basis alleges that the amounts claimed for Loss and the amounts paid and to be paid in Defense Costs for those claims exceed $250,000. Westchester, having agreed to defend such Insured Defendants subject to a reservation of rights, has paid and is continuing to pay for the defense of the claims referenced herein. As a result of such payments, the benefits available for Loss and future Defense Costs of the Insured Defendants are being reduced.

45. Westchester is willing to pay and hereby tenders the amount remaining of its aggregate limit of $250,000 for the Raynes Claim and the Michels Claim minus payments of Defense Costs incurred to date, and as incurred in the future prior to distribution of the remaining available limits as ordered by the Court.

46. In the event the court determines that the Notice of Future Claims letter complied with the notice requirements of the First Policy, Westchester contends that a single per claim limit of $500,000 applies in total to its responsibility for payment of Loss and Defense Costs on behalf of all of the Insured Defendants in connection with all the claims set forth above.

47. In the event the court determines that the Notice of Future Claims letter somehow complied with the Notice requirements of the First Policy, the defendants herein constitute multiple adverse parties claiming benefits due from Westchester from the same limited fund of money. Westchester is informed and believes and on such basis alleges that the amounts claimed for Loss and the amounts paid or to be paid in Defense Costs for the claims referenced herein and/or that may be asserted in the future as being governed by the Notice of Future Claims letter exceeds $500,000. Westchester, having agreed to defend the claims set
forth above subject to a reservation of rights, has paid and is continuing to pay for the defense of the claims referenced herein. As a result of such payments, the benefits available for Loss and Defense Costs are being reduced.

48. In the event the court determines that the Notice of Future Claims letter complied with the Notice requirements of the First Policy Westchester is willing to pay and hereby tenders its limit of $500,000 minus payment of Defense Costs incurred to date and as incurred in the future prior to distribution of the remaining limits as ordered by the Court.

49. In the event the court determines that the Notice of Future Claims letter somehow complied with the Notice requirements of the First Policy and the claims set forth above constitute separate claims the defendants herein constitute multiple adverse parties claiming benefits due from Westchester from the same limited fund of money. Westchester is willing to pay the amount remaining of its limit of $1,000,000 in payment of Loss and Defense Costs of the claims referenced herein and tenders that amount less payments of Defense Costs incurred to date, and as may be paid in the future under the First Policy prior to distribution of the remaining available limits as ordered by the court.

50. There exists a dispute among the various parties as to what the appropriate policy limits are for the claims asserted against the Insured Defendants and/or as may be asserted in the future (and claimed to be governed by the Notice of Future Claims letter) and regarding how to pay out benefits remaining. Westchester therefore seeks an order of this court determining (a) the applicable available limits of the policies and (b) how the benefits remaining are to be distributed among the parties.

WHEREFORE, Westchester prays for the following relief:
A. That the Court declare the rights and duties of Westchester and defendants as follows:

1. That the purported Notice of Future Claims letter is ineffective to cause any of the claims listed above to be considered first made during the First Policy;

2. That the liability of Westchester for Loss and Defense Costs for the Michels Claim and the Raynes Claim combined is $250,000 excess of the applicable Self- Insured Retention(s);

3. That Westchester is not liable to any Insured Defendant under the First Policy or Second Policy for Loss and Defense Costs for the Gonzalez Claim and the Garrett Claim;

4. That in the event the court determines that the Raynes Claim and the Michels Claim arise out of the same Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim under the terms of the applicable policy, the Self-Insured Retention amount of $100,000 applies jointly and severally to the Insured Defendants Strongtower, Buchholz, Hirschfield, Winter, Jones and Westlake.

5. That in the event the court determines that the Raynes Claim and the Michels Claim arise out of the same Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim under the terms of the Policies, that Westchester is entitled to reimbursement of the Defense Costs paid in defense of the Raynes and Michels Claims up to $100,000 from Insured Defendants Strongtower, Buchholz, Hirschfield, Winter, Jones and Westlake where the applicable Self-Insured Retention has not been paid in its entirety

6. In the event the Raynes Claim and the Michels Claim do not arise out of the same Wrongful Act or Interrelated Wrongful Acts, that the Self-Insured Retention amount of $100,000 applies jointly and severally in each Claim (the Raynes Claim and the Michels Claim) to those Insured Defendants who are defendants or respondents in such claim;

7. That in the event the Raynes and Michels Claims do not arise out of the same
Wrongful Act or Interrelated Wrongful Acts, that Westchester is entitled to
reimbursement of the Defense Costs paid in defense of the Raynes Claim and defense of
the Michels Claim up to $100,000 in each claim from the Insured Defendants who are
defendants or respondents in such claim where the applicable Self-Insured Retention
has not been paid in its entirety.

B. That in the event the court determines that the Notice of Future Claims letter complied with the Notice requirements of the First Policy,

1. That all claims set forth above, and any other claims which may in the future be claimed to be the subject of the Notice of Future Claims letter, arise out of the same Wrongful Act or Interrelated Wrongful Acts and are deemed to be one claim to have been first made during the First Policy period;

2. That no coverage exists under the Second Policy for any claim set forth above because the wrongful acts alleged in any claim made during the Second Policy's policy period have been the subject of the Notice of Future Claims letter;

3. That a single per claim limit of $500,000 applies to all claims referenced herein and all claims arising out of the wrongful acts referenced in the Notice of Future Claims letter;

4. That a single Self-Insured Retention of $100,000 applies jointly and severally to the Insured Defendants.

5. That Westchester has no responsibility for Loss and Defense Costs of the Insured Defendants or any of them under the First Policy before the Insured Defendants have paid a total of $100,000 in Loss and Defense Costs as provided under the First Policy.

6. That Westchester is entitled to reimbursement of the Loss and Defense Costs paid on their behalf from the Insured Defendants jointly and severally up t $100,000 where the applicable Self-Insured Retention has not been paid in its entirety.

C. That in the event the court determines that the Notice of Future Claims letter complied with the Notice requirements of the First Policy and that each claim set forth above is a separate claim,

1. That a Self-Insured Retention of $100,000 applies to each claim set forth above and jointly and severally to the Insured Defendants who are defendants or respondents in each such claim.

2. That for each claim set forth above, or that may be made in the future under the Notice of Future Claim letter, no liability of Westchester arises under the First Policy until the Insured Defendants in each such claim have paid a total of $100,000 in Loss and Defense Costs as provided under the applicable policy for each such claim.

3. That for each claim set forth above Westchester is entitled to reimbursement of the Loss and Defense Costs paid on their behalf from the Insured Defendants jointly and severally who are defendants or respondents in such claim up to $100,000 where the applicable Self-Insured Retention has not been paid in its entirety.

D. A determination of the persons or entities to whom policy benefits remaining are owed by Westchester and the amounts of such benefits to be paid to such persons or entities,

E. An order discharging Westchester from any further liability to any defendant arising out of the claims made by the Claimant Defendants upon payment of the policy benefits to the persons or entities determined by the court in the amounts determined by the court,

F. That Westchester be awarded its costs and expenses incurred herein, and

G. For such other and further relief as the Court deems just and proper. Dated: March 14,2013 LONDON FISCHER LLP"

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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