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

ACE AMERICAN INSURANCE COMPANY et al v. INTERSTATE SPECIALTY MARKETING, INC. complaint

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.

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JS 44 (Rev. 12/12)
 CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor suPplement the tiling and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet.
(SEE INSTRUCT/ONSONNEXT PAGE OFI'HISFORM..)
I. (a) PLAINTIFFS
ACE AMERICAN INSURANCE COMPANY
WESTCHESTER SURPLUS LINES INSURANCE COMPANY
(b) County of Residence of First Listed Plaintiff  Philadelphia  __.__
(EXCEPT IN U S. PLAINTIFF CASES)
(C) Attorneys (Firm Name, Address, and Telephone Number)
Sean P.Mahoney, Esquire, White and Williams LLP, 1650 Market Street,
One Liberty Place, Suite 1800, Philadelphia, PA 19103-7395
(215) 864-6342
DEFENDANTS
INTERSTATE SPECIALTY MARKETING, INC., d/b/a INTERSTATE
SPECIALTY MARKETING and/or ISM
County of Residence of First Listed Defendant  Orange County CA
(IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.
Attorneys (IfKnown)
William R.Mitchell, Esquire, WILLIAM R.MITCHELL, INC., 9160
Irvine Center Dr., Suite 200, Irvine, CA 92618
(949) 769-3606
II. BASIS OF JURISDICTION
(Place an "X" in One Box Onl y)
0 1 U.S. Government  
O 3 Federal Question
Plaintiff  
(U.S. Government Not aParty)
0 2 U.S. Govenunent  N 4 Diversity
Defendant  
(Indicate Citizenship of Parties in Item III,)
SUIT  I O I
III.. CI'CILEIN SI11Y OF YKIM.,Il'AL YAK I I LJ (Place an 'A in une mix jar riainuJj
(For Diversity Cases Only)  
and One Box for Defendant)
PTF DEF  
PTF  DEF
Citizen of This State  t$ 1  O 1 Incorporated or Principal Place  0 4  O 4
of Business In This State
Citizen of Another State  O 2  O 2 Incorporated and Principal Place  0 5  IH 5
of Business In Another State
Citizen or Subject of a  0 3  O 3 Foreign Nation  0 6 0 6
Foreign Country  --
IV. NAT UIZL+ OI
(Place an X in One 7 ox  n yJ
FORFEITURE/PENAtIFY BANKRUPTCY OTIIER5 T ATUTGS
CONTRACT
TORTS,_
0 110 Insurance
PERSONAL INJURY  PERSONAL INJURY
Cl 625 Drug Related Seizure 0 422 Appeal 28 USC 15 8 0 375 False Claims Act
0 120 Marine 0 310 Airplane  0 365 Personal Injury - of Property 21 USC 881 0 423 Withdrawal 0 400 State Reapportionment
0 130 Miller Act 0 315 Airplane Product  Product Liability 0 690 Other 28 USC 15 7 O 410 Antitrust
0 430 Batiks: and Banking
Cl 140 Negotiable Instrument
0 15 0 Recovery of Overpayment
Liability  0 367 Health Care/
0 320 Assault, Libel &  Pharmaceutical
0 45 0 Conunerce,
- PERTY'Rl ITT.'
0 820 Copyrights
& Enforcement of Judgment Slander  Personal Injury
0 460 Deportation
O 470 Racketeer Influenced and
0 15 1 Medicare Act
0 330 Federal Employers'  Product Liability
0 830 Patent
0 840 Trademark
Corrupt Organizations
0 15 2 Recovery of Defaulted Liability  0 368 Asbestos Personal
0 480 Consumer, Credit
Student Loans
(Excludes Veterans)
0 340 Marine  
Injury Product
0 345 Marine Product  Liability
0 490 Cable/Sat TV
LABOR SO ,I' L  ITY
0 710 Fair Labor Standards 0 861 HIA(1395 11)
0 15 3 Recovery of Overpayment
Liability  PERSONAL PROPERTY
0 85 0 Securities/Cormnodities/
of Veteran's Benefits 0 35 0 Motor Vehicle  0 370 Other Fraud
0 35 5 Motor Vehicle  0 371 Truth in Lending
Act
0 720 Labor/Management
0 862 Black Lung (923)
0 863 DI WCIDIWW (405 (g))
Exchange
0 890 Other Statutory Actions
0 160 Stockholders' Suits
0 190 Other Contract
Product Liability  0 380 Other Personal Relations 0 864 SSID Title XVI 0 891 Agricultural Acts
0 195 Contract Product Liability 0 360 Other Personal  Property Damage 0 740 Railway Labor Act 0 865 RSI (405 (g))
0 893 Environmental,Matters
0 895 Freedom of Information
0 196Franchise Injury  
0 385 Property Damage 0 75 1 Family and Medical
0 362 Personal Injury -  Product Liability Leave Act
Act
Medical Malpractice
0 790 Other Labor Litigation
0 791 Employee Retirement
Income Security Act
$1 896Arbitration
0 899 Administrative Procedure
Act/Review or Appeal of
REAI:'PROPERI'\'. CIVIL .RIGHTS
PRISONER PETITIONS -?
q,-
FEDERAL TAX SUITS  s
0 210 Laud Condemnation 0 440 Other Civil Rights Habeas Corpus:
0 870 Taxes (U.S. Plaintiff
0 220 Foreclosure 0 441 Voting
0 463 Alien Detainee
or Defendant)
0 871 IRS—Third Party
Agency Decision
0 95 0 Constitutionality of
0 230 Rent Lease & Ejectment 0 442 Employment
0 5 10 Motions to Vacate
26USC 7609
State Statutes
0 240 Torts to Land 0 443 Housing/
Sentence
0 245 Tort Product Liability Accommodations 0 5 30 General
3l11ik11GRil ftON
0 290 All Other Real Property
0 445 Amer. w/Disabilities - 0 5 35 Death Penalty
0 462 Naturalization Application
Employment Other:
0 446Amer. w/Disabilities - 0 5 40 Mandamus & Other 0 465 Other Immigration
Other 0 5 5 0 Civil Rights Actions
0 448 Education
0 5 5 5 Prison Condition
0 5 60 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an "X" in One Box Only)
)Rj 1 Original  0 2 Removed from  0 3 Remanded from  0 4 Reinstated or 0 5 Transferred from 0 6 Multidistrict
Proceeding  State Court  Appellate Court  Reopened  Another District  Litigation
(specify)
Cite the U.S. Civil Statute under which you are filing
(Do not cite jurisdictional statutes unless diversity):
VI. CAUSE OF ACTION
28 U.S.C.1332; 9 U.S.C.9
Brief description of cause:
Petition to Confirm Arbitration Award
VII. REQUESTED IN  0 CHECK IF THIS IS A CLASS ACTION  
DEMAND S  
CHECK YES only if demanded in complaint:
!`('1MPI.A INT-  
UNDER RULE 23, F.R.Cv.P.  
JURY DEMAND:  0 Yes X No
VIII. RELATED CASE(S)
IF ANY  
(See instructions):
JUDGE  
DOCKET NUMBER
DATE  
SIGNATUR ' OF ATTORN  t  O
05/06/2015
RECEIPT II  AMOUNT
 
APPLYING IFP
 
MAO. JUDGE
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 1 of 23
JS 44 Reverse (Rev.12/12)
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
L(a)  Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".
II.  Jurisdiction. The basis ofjurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an
in one of the boxes. If there is more than one basis ofjurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box I or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)
[1I.  Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.
IV. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.
V. Origin. Place an "X" in one of the six boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
When the petition for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5 ) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407.
When this box is checked, do not check (5 ) above.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 5 5 3 Brief Description: Unauthorized reception of cable service
VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 2 of 23
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
CASE MANAGEMENT TRACK DESIGNATION FORM
A( i-1ti`IW b l eA ~~SL~2o4~c~:
Ccd'tQ iN~ 
CIVIL ACTION
t2US
Lt
CCU W' PA  
v.
bLvf rvEl
 
NO.
ati& (at2 ~sr~J  
l
In accordance with the Civil Justice Expense and Delay Reduction Plan of this court, counsel for
plaintiff shall complete a Case Management Track Designation Form in all civil cases at the time of
filing the complaint and serve a copy on all defendants. (See § 1:03 of the plan set forth on the reverse
side of this form.) In the event that a defendant does not agree with the plaintiff regarding said
designation, that defendant shall, with its first appearance, submit to the clerk of court and serve on
the plaintiff and all other parties, a Case Management Track Designation Form specifying the track
to which that defendant believes the case should be assigned.
SELECT ONE OF THE FOLLOWING CASE MANAGEMENT TRACKS:
(a)
Habeas Corpus — Cases brought under 28 U.S.C. § 2241 through § 225 5 .
 ( )
(b)
Social Security — Cases requesting review of a decision of the Secretary of Health
and Human Services denying plaintiff Social Security Benefits.
 ( )
(c)
Arbitration — Cases required to be designated for arbitration under Local Civil Rule 5 3.2. ( )
(d)
Asbestos — Cases involving claims for personal injury or property damage from
exposure to asbestos.  ( )
(e)
Special Management — Cases that do not fall into tracks (a) through (d) that are
commonly referred to as complex and that need special or intense management by
the court. (See reverse side of this form for a detailed explanation of special
management cases.)  ( )
(f)
Standard Management — Cases that do not fall into any one of the other tracks.
Date  
Attorney-at-la
Telephone  
FAX Number
MI
Attorney for
r1 1 l 1 7  
l
7UV1 c vi//ia84 . CV
E-Mail Address
(Civ. 660) 10/02
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 3 of 23
Civil Justice Expense and Delay Reduction Plan
Section 1:03 - Assignment to a Management Track
(a)
The clerk of court will assign cases to tracks (a) through (d) based on the initial pleading.
(b)
In all cases not appropriate for assignment by the clerk of court to tracks (a) through (d), the
plaintiff shall submit to the clerk of court and serve with the complaint on all defendants a case management
track designation form specifying that the plaintiff believes the case requires Standard Management or
Special Management. In the event that a defendant does not agree with the plaintiff regarding said
designation, that defendant shall, with its first appearance, submit to the clerk of court and serve on the
plaintiff and all other parties, a case management track designation form specifying the track to which that
defendant believes the case should be assigned.
(c)
The court may, on its own initiative or upon the request of any party, change the track
assignment of any case at any time.,
(d)
Nothing in this Plan is intended to abrogate or limit a judicial officer's authority in any case
pending before that judicial officer, to direct pretrial and trial proceedings that are more stringent than those
of the Plan and that are designed to accomplish cost and delay reduction.
(e)
Nothing in this Plan is intended to supersede Local Civil Rules 40.1 and 72.1, or the
procedure for random assignment of Habeas Corpus and Social Security cases referred to magistrate judges
of the court.
SPECIAL MANAGEMENT, CASE ASSIGNMENTS
(See §1.02 (e) Managernent.Track Definitions of the
Civil Justice Expense and Delay Reduction Plan)
Special Management cases will usually include that class of cases commonly referred to as "complex
litigation" as that term has been used in the Manuals for Complex Litigation. The first manual was prepared
in 1969 and the Manual for Complex Litigation Second, MCL 2d was prepared in 1985 . This term is
intended to include cases that present unusual problems and require extraordinary treatment. See §0.1 of the
first manual. Cases may require special or intense management by the court due to one or more of the
following factors: (1) large number of parties; (2) large number of claims or defenses; (3) complex factual
issues; (4) large volume of evidence; (5 ) problems locating or preserving evidence; (6) extensive discovery;
(7) exceptionally long time needed to prepare for disposition; (8) decision needed within an exceptionally
short time; and (9) need to decide preliminary issues before final disposition. It may include two or more
related cases. Complex litigation typically includes such cases as antitrust cases; cases involving a large
number of parties or an unincorporated association.of large membership; cases involving requests for
injunctive relief affecting the operation of large business entities; patent cases; copyright and trademark
cases; common disaster cases such as those arising from aircraft crashes or marine disasters; actions brought
by individual stockholders; stockholder's derivative andstockholder's representative actions; class actions or
potential class actions; and other civil (and criminal) cases involving unusual multiplicity or complexity of
factual issues. See §0.22 of the first Manual for Complex Litigation and Manual for Complex Litigation
Second, Chapter 33.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 4 of 23
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA — DESIGNATION FORM to be used by counsel to indicate the category of the case for the purpose of
assignment to appropriate calendar.
 (
Address of Plaintiff:  L 1  t ~  ,  
L(
)
~ AGt /~77I~
?M//
O
Address of Defendant:  
v~ ~t ~~
t 6 l ~
l
~~Ip  i  qz7
Place of Accident, Incident or Transaction: ~
~uG
(Use Reverse Side For Additional Space)
Does this civil action involve a nongovernmental corporate party with any parent corporation and any publicly held corporation ong 10% or more of its stock?
(Attach two copies of the Disclosure Statement Form in accordance with Fed.R.Civ.P. 7.1(a))  Ye  NoD
Does this case involve urultidistrict litigation possibilities?
 
YesD
RELATED CASE, IF ANY:
Case Number:
 
J u d g e
 
Date Terminated:
Civil cases are deemed related when yes is answered to any of the following questions:
1.
Is this case related to property included in an earlier numbered suit pending or within one year previously terminated action in this court's
YesD No
2.
Does this case involve the same issue of fact or grow out of the same transaction as a prior suit pending or within one year previously terminated
action in this court?
YesD  Nc
3.
Does this case involve the validity or infringement of a patent already in suit or any earlier numbered case pending or within one year previously
terminated action in this court?  
YesD  N9
4.
Is this case a second or successive habeas corpus, social security appeal, or pro se civil rights case filed by the same individual?
YesD  Nt>
CIVIL: (Place 111 ONE CATEGORY ONLY)
A. Federal Quest ion Cases:
K Indemnity Contract, Marine Contract, and All Other Contracts
2. K FELA
3. K Jones Act-Personal Injury
4. K Antitrust
5 . K Patent
6. K Labor-Management Relations
7. K Civil Rights
8. K Habeas Corpus
9. K Securities Act(s) Cases
10. K Social Security Review Cases
II. K All other Federal Question Cases
( P l e a s e s p e c i f y )
B. Diversity Jurisdiction Cases:
1. K Insurance Contract and Other Contracts
2. K Airplane Personal Injury
3. K Assault, Defamation
4. K Marine Personal Injury
5 . K Motor Vehicle Personal Injury
6. K Other Personal Injury (Please specify)
7. K Products Liability
8. K Products Liability -- Asbestos
9. All other Divers Cases
(Please specify) ty C  /a
VZl,2G~
ARBITRATION CERTIFICATION
~ tJ  tlji/f~ Ild4~1 }~  
(Check Appropriate Category)
counsel of record do hereby certify:
Pursuant to Local Civil Rule 3.2, Section 3(c)(2), that to the best of my knowledge and belief, the damages recoverable in this civil action case exceed the sum of
$15 0,000.00 exclusive of interest and costs;
Relief other than monetary damages is sought.  
J~
DATE:
Attorney-at-Law  
Attorney LD.#
NOTE: A trial de novo will be a trial by jury onlre has been compliance with F.RC.P. 38.
I certify that , to my knowledge,
the within case is not related to any case now pending or within one year previously terminated action in this court
except as noted above.
DATE:
Attorney-at-Law  
Attorney I.D.#
CIV. 609 (5 /2012)
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 5 of 23
IN TH E UNITED STATES DISTRICT COURT
FOR TH E EASTERN DISTRICT OF PENNSYLVANIA
ACE AMERICAN INSURANCE COMPANY AND
WESTCHESTER SURPLUS LINES INSURANCE
COMPANY,
Petitioners,
CIVIL ACTION
0
INTERSTATE SPECIALTY MARKETING, INC.
D/B/A INTERSTATE SPECIALTY MARKETING
AND/OR ISM
Respondent.
NO.
CORPORATE DISCLOSURE STATEMENT OF PETITIONER
WESTCH ESTER SURPLUS LINES INSURANCE COMPANY
PURSUANT TO FED. R. CIV. P. 7.1
Petitioner Westchester Surplus Lines Insurance Company, by its attorneys, White and
Williams LLP, hereby makes the following corporate disclosure statement pursuant to Fed. R.
Civ. P. 7.1:
The nongovernmental corporate party, Westchester Surplus Lines Insurance Company,
is a wholly-owned subsidiary of ACE US Holdings, Inc. ACE US Holdings, Inc., is a wholly-
owned subsidiary of ACE Group Holdings, Inc., which, in turn, is a wholly-owned subsidiary
of ACE Limited. ACE Limited is the ultimate parent and the only publicly traded company,
which trades on the New York Stock Exchange under the symbol "ACE."
15341317v.2
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 6 of 23
WHITE AND WILLIAMS LLP
DATE: May 7 2015  
BY:  '1 :  /  . f
~
`' ' SPM6885
Sean P. Mahoney, Esquike \`
165 0 Market Street
One Liberty Place I Suite 1800
Philadelphia, PA 19103-7395
( 2 1 5 ) 8 6 4 - 6 3 4 2
(215) 789-7577 (FAX)
oneys@whiteandwi11iams.com
Attorneys for Petitioners
ACE American Ins. Co.
& Westchester Surplus Lines Ins. Co.
- 2 -
15 34 13 17v.2
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 7 of 23
IN TH E UNITED STATES DISTRICT COURT
FOR TH E EASTERN DISTRICT OF PENNSYLVANIA
ACE AMERICAN INSURANCE COMPANY AND
WESTCHESTER SURPLUS LINES INSURANCE
COMPANY,
Petitioners,
CIVIL ACTION
V.
INTERSTATE SPECIALTY MARKETING, INC.
D/B/A INTERSTATE SPECIALTY MARKETING
AND/OR ISM
Respondent.
CORPORATE DISCLOSURE STATEMENT OF PETITIONER
ACE AMERICAN INSURANCE COMPANY PURSUANT TO FED. R. CIV. P. 7.1
Petitioner ACE American Insurance Company, by its attorneys, White and Williams
LLP, hereby makes the following corporate disclosure statement pursuant to Fed. R. Civ. P. 7.1:
The nongovernmental corporate party, ACE American Insurance Company, is a wholly-
owned subsidiary of INA Holdings Corporation. INA Holdings Corporation is a wholly-
owned subsidiary of INA Financial. Corporation. INA Financial Corporation is a wholly-owned
subsidiary of INA Corporation, which, in turn, is a wholly-owned subsidiary of ACE INA
Holdings, Inc. ACE Group Holdings, Inc. owns 80% of ACE INA Holdings, Inc., while ACE
Limited directly holds the remaining 20%. ACE Group Holdings, Inc. is a wholly-owned
subsidiary of ACE Limited. ACE Limited is the ultimate parent and the only publicly traded
company, which trades on the New York Stock Exchange under the symbol "ACE
".
15341050v.2
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 8 of 23
WH ITE AND WILLIAMS LLP
DATE: May 7, 2015  
BY  , t
t
,) / (SPM6885 )
Sean P. Mahoney, Esquire
165 0 Market Street
One Liberty Place I Suite 1800
Philadelphia, PA 19103-7395
(215 ) 864-6342
(215 ) 789-75 77 (FAX)
mahoneys@whiteandwilliams.com
Attorneys for Petitioners
ACE American Ins. Co.
& Westchester Surplus Lines Ins. Co.
-2-
15 34 105 0v.2
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 9 of 23
IN TH E UNITED STATES DISTRICT COURT
FOR TH E EASTERN DISTRICT OF PENNSYLVANIA
ACE AMERICAN INSURANCE COMPANY AND
WESTCHESTER SURPLUS LINES INSURANCE
COMPANY,
Petitioners,
CIVIL ACTION
M
INTERSTATE SPECIALTY MARKETING, INC.
D/B/A INTERSTATE SPECIALTY MARKETING
AND/OR ISM
Respondent.
NO.
PETITION TO CONFIRM ARBITRATION AWARD
Petitioners, ACE American Insurance Company and West Chester Surplus Lines
Insurance Company (collectively "ACE" or "Petitioner"), by their attorneys, White and
Williams LLP, hereby petition this Court pursuant to 9 U.S.C. § 9 to confirm the Arbitration
Award issued in their favor and against Respondent, Interstate Specialty Marketing, Inc. d/b/a
Interstate Specialty Marketing and/or ISM ("ISM" or "Respondent"), and aver as follows:
PARTIES
ACE is a corporation organized under the laws of the Commonwealth of
Pennsylvania with its principal place of business in Philadelphia, Pennsylvania.
2.  
ISM is a corporation organized under the laws of the State of California with its
principal place of business in Tustin, California.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 10 of 23
JURISDICTION AND VENUE
3.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332 because
ACE is a citizen of the Commonwealth of Pennsylvania, ISM is a citizen of the State of
California, and the amount in controversy in this matter exceeds $75 ,000.00, exclusive of interest
and costs.
4.
Venue is proper in this District pursuant to the Federal Arbitration Act, 9 U.S.C.
§ 9, because it is the District in which the arbitration award was made.
5 .
Respondent ISM is subject to the personal jurisdiction of this Court under the
Federal Rule of Civil Procedure Rule 4(e).
ARBITRATION AWARD
6.
In 2009, ACE and ISM entered into a written Producer Agreement under which
ACE authorized ISM to make submissions to ACE on behalf of ISM's clients for potential.
insurance coverage provided by ACE.
7.
Pursuant to the Producer Agreement, ISM was required to collect all premiums
due in connection with any insurance policies that ACE issued to ISM's clients as a result of
ISM's submissions, and to remit those premiums, net of any compensation due to ISM, to ACE.
8. In 2012 and 2013, ISM collected, inter cilia, premium payments in the amount of
$224,703.33 from its clients for four (4) separate insurance policies ACE had issued as a result of
ISM's submissions.
9.
As a result, ISM was — and continues to be — obligated to remit $224,703.33 in
premium to ACE, but it has never done so.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 11 of 23
10.  
ISM's failure to remit the $224,703.33 in unpaid premium it owes ACE pursuant
to the Producer Agreement forced ACE to initiate an arbitration proceeding against ISM.
11.
Section VI of the Producer Agreement provides that any disputes between the
parties arising under the Producer Agreement were to be submitted to arbitration, that an
arbitration decision shall become binding upon all parties to the proceeding, and a judgment
upon any award issued by the arbitrators may be entered by any court having jurisdiction. A
true and correct copy of the arbitration provisions in the Producer Agreement is attached hereto
as Exhibit "A".
12.
On or about July 1, 2014, ACE submitted a Petition for Arbitration in accordance
with the Producer Agreement.
13.
ACE's Petition for Arbitration sought an award in ACE's favor and against ISM
in the principal amount due of $224,703.33, plus prejudgment interest and post-judgment
interest, costs and attorneys' fees, as well as for any other relief that the arbitration panel
deemed appropriate.
14.
Pursuant to the terms of the Producer Agreement, ACE appointed an arbitrator,
ISM appointed an arbitrator, and then those two arbitrators appointed an umpire to form a
panel of three arbitrators to preside over the arbitration proceeding arising from ACE's petition
to arbitrate its disputes with ISM.
15 .
ISM actively participated in that arbitration proceeding.
16.
During the arbitration proceedings, ACE, ISM and the panel of three arbitrators
agreed that no arbitration hearing was necessary to resolve ACE's claim against ISM.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 12 of 23
17. ACE, ISM and the panel further agreed that ACE and ISM would each submit
briefs and evidence to the panel of arbitrators in support of their respective positions, which the
panel would consider before rendering its decision.
18. ISM ultimately conceded its liability to ACE in writing for the full amount due,
without qualification.
19. Following the parties' submission of briefs and supporting evidence, on April 9,
2015 , the arbitrators appointed to hear the dispute deliberated and issued a "Memorandum
Order" (the "Award") in favor of ACE, a true and correct copy of which is attached hereto as
Exhibit "B".
20. The Award stated that the arbitrators found in favor of ACE and against ISM and
further ordered ISM to pay ACE the amount of $224,703.33 in damages, plus prejudgment
interest in the amount of $31,5 93.05 , as well as the administrative costs of ADR Options, which
had provided the physical space for the arbitration proceedings.
21. The total amount awarded ACE was $25 6,296.28.
22. This Petition is authorized by the terms of the Producer Agreement and by § 9 of
the Federal Arbitration Act, 9 U.S.C. § 1 , et seq.
23. This Petition is timely under § 9 of the Federal Arbitration Act because it has
been filed within one year after the Award was made.
WH EREFORE, ACE prays for relief as follows:
a) That the Court issue an order confirming the Award, as authorized by § 9 of
the Federal Arbitration Act;
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 13 of 23
b) That the Court enter judgment in favor of ACE that conforms to the Award;
and
c) That the Court issue such other and further relief as the Court deems just and
appropriate.
Respectfully submitted,
WHITE AND WILLIAMS LLP
DATE: May 7, 2015
Sean P. Mahoney, 1
165 0 Market Street
One Liberty Place I Sdite 1800
Philadelphia, PA 19103-7395
(215 ) 864-6342
(215 ) 789-75 77 (FAX)
mahoneys@whiteandwilliams.com
Attorneys for Petitioners
ACE American Ins. Co.
& Westchester Surplus Lines Ins. Co.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 14 of 23
EXH IBIT A
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 15 of 23
d
ACE Group of Companies
1 ), Suspension of Access, The Company may, at its sole discretion, suspend access to any ACE intemet portal.
Any termination of the Agreement shall also be a termination of access to the ACE internet portal,
V.  Termination
A. Any Reason. Either party may terminate the Agreement for any reason upon 90 days written notice.
B. Malerlal Breach,
Either party may tonnInato the Agreement Immediately upon written notice if the other
party commits a material breach of the Agreement, Determination of a breach and damages, If arty, are governed
by Section VI. (Arbitration), However, neither the Producer's exercise of its right to declino to submit any
business nor the Company's exercise of its right to decline any submission from the Producer of itself shall be a
breach of the Agreement,
C. Pos/-Termina/ion Service.
In the event of any termination, die Producer will continue to service its Clients'
in-force policies, unless specifically instructed otherwise In writing by the Company. This sc:vice is included In
Oho compensation paid to the Producer under Section [LB. The Company may, at its option, take over servicing
of in-force policies, in which case the Company will be entitled to (1) offset Ore reasonable costs of such service
against any monies otherwise due to the Producer, and/or (2) receive reimbursement from the Producer of such
costs from compensation already paid.
Vl  Arbitration
A. Subrnission /aArbitration Panel,
Any dispute arising from or relating to the performance or breach of this
Agreement shall be submitted to arbitration before a panel consisting of two arbitrators and an umpire meeting in
Philadelphia, Pennsylvania. 'rho initiating party Is referred to as the claimant, and the responding party as the
respondent.
B. Panel Selection.
The members of the arbitration panel shall be disinterested active or former officials of
insurance or reinsurance companies or producers. Each party will appoint an arbitrator, and the two arbitrators
shall choose an umpire before instituting the hearing. if the respondent fails to appoint Its arbitrator within 60 days
after being requested to do no by Ore claimant, the claimant may appoint tire second arbitrator. If the two arbitrators
fall to agree upon the appointment of an umpire within four weeks after their nominations, they shall submit the
umpire selection to tire American Arbitration Association (AAA) for appointtent from its panel of commercial
arbitrators. The claimant shall submit its initial brief in 20 days thereafter, and the claimant may submit a reply
brief within 10 days after filing of the respondent's brief.
C. Proceedings. Tito arbitrators shall observe the custom and usage of the insurance business, and conduct one or
more hearings at which evidence may be introduced without following strict rules of evidence but In which cross-
examination and rebuttal shall bo allowed. The panel shall Issue Its decision within 60 days following the
termination of hearings unless the parties consent to as extension. A decision by the majority of the members of
the panel shall become binding upon all parties to the proceeding. The arbitrators will have no authority to award
punitive damages or any other damages not measured by actual damages. The parties agree to abide by and
perform any award rendered by the arbitrates, and agree that a judgment of a court having jurisdiction may be
entered upon an award. No party shall have a cause of action against any arbitrator for damages or injunctive relief
for any act, error or omission in conducting the proceeding.
P. Costs. Each party shall beer lire expense of its own arbitrator and shall jointly and equally bear
with the other
party the expense fthe umpire. The remaining costs of the arbitration proceeding shall be allocated by the panel.
Ed. 2/2008
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 16 of 23
EXH IBIT B
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 17 of 23
ACE AMERICAN INSURANCE, COMPANY AND
WESTCH ESTER SURPLUS LINES INSURANCE COMPANY, Claimants
and
INTERSTATE SPECIALTY MARKETING, INC. d/b/a INTERSTATE SPECIALTY
MARKETING AND/OR ISM
Memorandum Order
PRESENT:  
P. Douglas Sisk, Esquire,
Bernd G. Heinze, Esquire, and
Andrew Walsh, Esquire, Arbitrators
This Memorandum Order is issued pursuant to Section VI (B) if the Producer
Agreement between Ace American Insurance, Company and Westchester Surplus
Lines Insurance Company [hereafter ACE) and Interstate Specialty Marketing, Inc.
D/B/A Interstate Specialty Marketing And/Or ISM (hereafter ISM). The Producer
Agreement was effective January 1, 2009, as modified by a First Amendment,
effective January 1, 2009 and a Second Amendment effective October 1, 2011. ACE
seeks full payment of premiums, net of any compensation due ISM, as authorized
under the Producer Agreement, but which ISM initially failed to remit properly and
thereafter engaged in a pattern of unnecessary and apparently deliberate delay in
remitting the premiums due ACE. We find, as follows, in favor of ACE in all respects,
except that we determine that we do not have the power under Pennsylvania law to
award the requested attorneys' fees.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 18 of 23
Pertinent Facts:
The Producer Agreement, noted above, authorizes ISM, as an Insurance
Broker, to collect all premiums due in connection with specific insurance policies
issued by ACE. The Producer Agreement requires ISM to remit to ACE all premiums
net of ISM's compensation within 30 clays after' issuance of a billing statement by
ACE. The Agreement states that payment of any premiums owed to ACE is
solely
ISM's responsibility, and it bears sole risk and responsibility to pay.
ISM failed to properly remit payment of premiums paid by De Leon's
Transport [policy #'s H0845 2362 and G24162679 - net due ACE $65 ,639.68 plus
$4,624.95 , respectively]. The total clue ACE on these policies is $170,264.63. On
ACE's presentation of the check issued by BNY Mellon to ISM's bank, the institution
declined t.o honor it due to insufficient funds.
Similarly, within regard to premium payments by Olgas Shapiro d/b/a Pacific
Oil Co. [policy #'s 110845 5 120 and G24372972 - net due ACE $42,626.10 and
$11,812.60, respectively.] The total due ACE on these policies is $5 4,438.70. Again,
1SM's own bank declined to honor a check in the amount of $5 4,438.70 presented
by BNY Mellon. The combined remittances that ISM owes ACE total $224,703.33.
it is noted that ISM billed its clients for the premiums due on these specific policies
and received full payment. It did not, in turn, remit what was due ACE under the
.........  _....._
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 19 of 23
Producer Agreement, even though it was ISM's sole burden and responsibility to do
so, arguably even if its clients failed to pay the premiums to ISM.
What followed was a series of attempts by ACE to collect the remittances
owed by ISM, and a series of statements that ISM was unable to find critical
documentation, assertions that the premiums had, in fact, been remitted to ACE, etc.
ACE responded with clear documentation of failed transactions, "bounced checks,"
repetitive correspondence attempting to get ISM to respond and remit the
premiums due ACE. After ACE's attempts failed it filed the within action pursuant to
Section VI of the Producer Agreement.
ACE and ISM selected as Party Arbitrators, Bernd G. Heinze, Esquire [for ACE]
and Andrew Walsh, Esquire [for ISM]. Douglas Sisk [ADR Options, Inc.] was
selected as the Neutral Arbitrator/Umpire. After review of the initial filings, a
conference, in person and by telephone, was held December 12, 2014. The
Arbitration Panel and counsel agreed that a full hearing was unnecessary, and that
this matter could be determined on the papers. We directed further briefing. By
Brief filed January 30, 2015 , Respondent, ISM, conceded liability. ISM's Brief
restated the facts presented by ACE, and conceded that ACE's claimed amounts
"appear to be valid." Accordingly, we will award ACE a total of $224,703.33 due
pursuant to the Producer Agreement between Ace American Insurance, Company
and Westchester Surplus Lines Insurance Company [ACE) and Interstate Specialty
Marketing, Inc. D/B/A Interstate Specialty Marketing And/or ISM (ISM), effective
January 1, 2009, as later modified.
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 20 of 23
r  ^i
In its February 18, 2015 Reply Brief, ACE argues that this panel must enter
an award in ACE's favor and against ISM for the principal amount of
unremitted premiums claimed, as well as prejudgment interest on that amount
through the date of the award. We agree. ACE is entitled to prejudgment interest
on the amount due from ISM as a matter of law because ISM's breach of the
Producer Agreement in this case consisted of the failure to pay a definite sum of
money. Cresci Const.
Services, Inc. v. Mart in, 64
A.3d 25 4, 25 8-25 9 (Pa.Super. 2013).
The applicable prejudgment interest rate is six percent (6%) per annum. 41 P.S. 202
(2014).
ACE requests an award of attorneys' fees and costs in the amount of
$33,895 .96due to ISM's arbitrary and vexatious resistance to ACE's claim in this
matter. 1
The Panel unanimously agrees that ISM's conduct in this matter is
ACE cites 42 P.S. § 25 03(9) (authorizing award of attorneys' fees where other
party's conduct, including the raising of defenses, was "arbitrary, vexatious or in bad
faith"); Thunbery v. St rause,
682 A.2d 295 , 299 (Pa. 1996) ("arbitrary" conduct
means conduct based on random or convenient selection rather than reason;
"vexatious" means "without sufficient grounds in law or in fact" and serving the sole
purpose of causing annoyance.
§
25 03. Right of participants to receive counsel fees.
The following participants shall be entitled to a reasonable counsel fee as part of the
taxable costs of the matter:
(9) Any participant who is awarded counsel fees because the conduct of another
party in
commencing the matter or otherwise was arbitrary, vexatious or in bad
faith.
1O 37O44
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 21 of 23
i-( ~ l.L#
arbitrary and vexatious, and it would ordinarily warrant imposition of attorneys'
fees. We believe, however, that we are constrained by Section VI. C. of the Producer
Agreement, which states in pertinent part,
Proceedincrs_. - .
The arbitrators will have not authority
to award punitive damages or any other or any
other damages not measured by actual damages.
While ISM's dilatory, unjustified and obdurate actions in this matter arguably merit
an award of attorneys' fees, we find that we cannot impose them under the terms of
the Producer Agreement or pursuant to 42 P.S. § 25 03(9). Further, we cannot
invoke the "English Rule" to justify and award attorneys' fees, as Pennsylvania has
not adopted it, even in a modified fashion.
Award:
We rule in favor of ACE in the amount of $224,703.33 due pursuant to the
Producer
Agreement. We also award ACE prejudgment interest [6% per annum] in
in the amount of $31,5 93.05 , as of April 1,
2015 2, as well the administrative costs of
The vexatious conduct, cited in Thunherg and other cases which rely on Thunberg,
however, relate to the award of, or refusal to award, attorneys' fees for vexatious, obdurate
conduct by the Plaintiff/Complainant,
not the Defendant/Respondent
during the pendency of
the matter. ACE's conduct in this matter was not unjustified, vexatious or obdurate.
2 The prejudgment interest calculation is based on the Table at p. 3, ACE's Reply
Grief, filed February 18, 2015 . '['he amounts in that table were calculated as of
3/15 /2015 . The amounts below are calculated as of April 1, 2015 .
[A] Policy # [B] Interest Due [C] Daily i % [Dl = TOTAL [B + GRAND
as of 3/15 /2015 accrual 11i7 da s D TOTAL
--H0845 2362 24,069.94
27.23 462.91 24,5 32.85
E.
ii iJU3 f7144'
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 22 of 23
-N
jc -;
ADR Options. Pursuant to the Arbitration Agreement, the parties will bear their
own costs and attorneys' fees, as well as the fees of the party Arbitrators. ACE and
ISM will divide the fees due the Umpire/Neutral Arbitrator.
For the Panel,
lily
c
P. DougJs Sisk,
Umpire
G24162679  
662.75
H08455120  487689
G24372972  
1351.49
.76
7.01
12.92
119.17
679.67
4996.06
1 1.94 32.98 1384.47
$31, 593.05
I ,. ......................-,  • .. .'. 1J(  (U
Case 2:15-cv-02528-LDD Document 1 Filed 05/07/15 Page 23 of 23

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