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

ACE AMERICAN INSURANCE COMPANY v. ALI 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.

Embedded Scribd iPaper - Requires Javascript and Flash Player
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page1 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
NEIL S. LERNER (SBN 134031) COX WOOTTON LERNER GRIFFIN HANSEN & POULOS, LLP 12400 Wilshire Boulevard, Suite 1300 Los Angeles, California 90025 Telephone (310) 979-9144 Facsimile (310) 979-9244 E-mail nsl@cwlfirm.com Attorneys for Plaintiff, ACE AMERICAN INSURANCE COMPANY UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ● SAN JOSE ACE AMERICAN INSURANCE COMPANY, Plaintiff, vs. SYED ALI, Defendant. Plaintiff ACE AMERICAN INSURANCE COMPANY (“ACE”) complains against Defendant, SYED ALI (“Defendant”) and alleges, on information and belief, the following: JURISDICTION AND VENUE 1. This is an action for rescission and voiding of a marine insurance policy. It is an admiralty and maritime claim within the meaning of Rules 9(h) and 38(e) of the Federal Rules of Civil Procedure and falls within the admiralty and maritime jurisdiction of this Court pursuant to 28 U.S.C. § 1333. /// /// 1
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
Case No. IN ADMIRALTY COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page2 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
2.
Pursuant to the Declaratory Relief Act, 28 U.S.C. §§ 2201 et seq., this
action also seeks a determination of the rights and obligations of the parties to a marine insurance policy regarding a coercive claim. In addition, it seeks relief under Sections 1900 and 1904 of the California Insurance Code and relief under the general maritime law. 3. Venue is proper in this Court because the subject marine insurance policy was issued in this district, because the insurance application at issue was filled out and executed in this district, because the Defendant resides in this district and this Court has personal jurisdiction over him, because the vessel at issue is home-ported in this district and because ACE conducts business in this district. 4. 5. ACE is a corporation organized and existing under the laws of the State of ACE is licensed to do business in the State of California, and in this Delaware with its principal place of business in Philadelphia, Pennsylvania. judicial district, as an insurer of marine risks, and ACE issues marine insurance policies in California and in this judicial district. 6. ACE is informed and believes, and thereon alleges, that Defendant is an GENERAL ALLEGATIONS 7. Defendant claims, and at all times relevant to this action has claimed, to be the owner of a vessel named “007,” a 2009 or 2010 43-foot Donzi bearing official number 1225832 (the “Vessel”). 8. Prior to January 7, 2011, Defendant contacted, either directly or indirectly through an agent, broker or other representative, ACE to exchange information about the Vessel for purposes of obtaining a policy of marine insurance. This commenced the underwriting process. 9. On or about January 7, 2011, Defendant signed and completed, or had signed and completed for him and was adopted by him, a Marine Insurance Application (herein “Application”) and submitted, or caused to be submitted, said Application to 2
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
individual and resident of Santa Clara County in the State of California.
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page3 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
ACE. The Application was said to be signed by, or as, “Syed Ali,” as the “applicant” for a marine insurance policy with ACE. A true and correct copy of the Application is attached hereto as Exhibit “A” and is incorporated herein by reference. 10. The signed Application submitted to ACE by Defendant, or on his behalf (a) A section that asked for the vessel’s “Purchase Price,” with a and adopted by him, contained: corresponding blank space that was filled in by Defendant, or on his behalf and adopted by him, as $650,000. (b) A section that asked for the “Primary Owners SSN,” (Social Security Number) with a corresponding blank space that was filed in by Defendant, or on his behalf and adopted by him, with the last four digits as 7031. (c) by him, as / (d) A section that asked for the applicant’s “Birth Date,” with a /1964. A section that asked for the “Size and Type of Vessel(s) Owned & corresponding blank space that was filled in by Defendant, or on his behalf and adopted
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Operated” by applicant, with a corresponding blank space that was filled in by Defendant, or on his behalf and adopted by him, as This 1 Year, 56’ Carver, 38’ Donzi, 45’ Bayliner. (e) by him, as 85. (f) A reference to Defendant’s MVR (Motor Vehicle Record) being received by ACE in connection with the underwriting process. During that process, Defendant was asked by ACE to provide his California driver’s license number so that his MVR could be obtained and reviewed as part of the underwriting of the Vessel and ACE was provided with the following driver’s license number: C2901741. (g) A set of “Acknowledgements,” directly above the signature line, that stated, inter alia, as follows: “Any person who knowingly and with intent to 3
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
A section that asked for the Vessel’s “Maximum Speed,” with a
corresponding blank space that was filled in by Defendant, or on his behalf and adopted
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page4 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
defraud any insurance company or another person files an application for insurance containing any materially false information, or conceals for the purposes of misleading, information concerning a fact material thereto, commits a fraudulent insurance act, which is a crime and subjects the person to criminal and civil penalties.” (h) true. An “Applicant’s Statement,” directly above the signature line, that stated: “I certify that to the best of my knowledge all statements on this application are I understand and agree that the company may obtain from third parties information regarding me, my watercraft, and listed operators, including driving records, financial credit information and prior claims information. I understand that I have the right of access and correction with respect to all such information collected and that the company will provide further information regarding my statutory rights upon request.” (i) (j) 11. A section that asked for the “Signature of Applicant” that contained A section that asked for Ownership Information and that specifically a signature that purported to be that of the Defendant. asked for information concerning any “additional owners” that was left blank. By completing, signing and submitting the Application, or by having the Application completed, signed and submitted on his behalf and adopting it, Defendant verified that the information contained on it was true, that all statements on the Application were true and that no statements had been false, misleading, concealed, distorted or misrepresented. 12. Based, in part, on the information contained in the Application and, in part, on the information obtained by ACE in the underwriting process, in particular his MVR, ACE issued a High Performance Marine Insurance Policy to Defendant for the Vessel, bearing Policy No. Y08728677 003, (herein “the Policy”). The named insured on the Policy was Defendant and the Vessel was insured for a hull value limit of $650,000.00. The Policy incepted on or about January 7, 2011, was renewed annually and was in place on January 19, 2013, when it sustained a loss on the navigable waters 4
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page5 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
of the United States. True and correct copies of the Policy and Declarations Page are attached hereto as Exhibit “B” and are incorporated herein by reference. 13. On or about January 19, 2013, while upon the navigable waters of the United States, in Northern California, with Defendant at the helm, the Vessel allegedly encountered a series of very large waves and slammed down hard on the ocean causing substantial damage to the Vessel. 14. Thereafter, Defendant made an insurance claim against the Policy, thus beginning the claims process. During that process, claim number JY13J0215622 was assigned to the claim. 15. During the investigation that was undertaken as part of the claims process, ACE ascertained that during the underwriting process, Defendant had made either unintentional misrepresentations or concealments of material facts, or intentional misrepresentations or concealment of non-material facts, or both. 16. The facts misrepresented and/or concealed were either material to the risk or intentionally concealed and misrepresented, or both, and would have impacted either upon ACE’s decision to accept the risk or the amount of premium ACE charged for the Policy or prompted further questions. These unintentional or intentional misrepresentations and concealments include, but are not limited to, the following: (a) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that the purchase price of the Vessel was “$650,000” and concealed the exact and whole truth from ACE that the purchase price of the Vessel was $550,000, of which $250,000 was a credit from Donzi as part of a transaction to trade in a prior vessel owned by Defendant, all of which, collectively, is substantially different from a Vessel with a purchase price of $650,000. The purchase price of a vessel is, and at all times relevant was, a material fact; (b) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that his social security number was one that contained the last four digits of “7031,” and concealed the exact and whole truth from ACE that his social 5
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page6 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
security number was
-
-4549, which does not contain the last four digits 7031. To
ACE, the social security number of an applicant for marine insurance is, and at all times relevant was, a material fact. In addition, the social security number of an applicant for marine insurance, particularly when asked on a marine insurance application, is, and at all times relevant was, a material fact. (c) Defendant either intentionally or unintentionally misrepresented to / / /1964 and concealed the exact and /1973. To ACE, the birth date of an ACE on the Application that his birth date was whole truth from ACE that his birth date was
applicant for marine insurance is a material fact. In addition, the birth date of an applicant for marine insurance, particularly when asked on an application for marine insurance, is, and at all times relevant was, a material fact. (d) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that his vessel ownership and vessel operatorship history included a 38’ Donzi and a 45’ Bayliner and concealed the exact and whole truth from ACE that he had never owned a 45’ Bayliner and that he had owned two prior 38’ Donzi’s, not just one. A marine insurance applicant’s ownership and operatorship histories are, and at all time relevant were, material facts. (e) Defendant either intentionally or unintentionally misrepresented to ACE on the Application, and during the underwriting process, that his California Driver’s License number was C2901741 and concealed the exact and whole truth from ACE that his Driver’s License number was A5453947. The driver’s license number of an applicant for marine insurance is, and at all times material was, a material fact. In addition, to ACE, the driver’s license number for an applicant for marine insurance is, and at all times relevant was, material. (f) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that the Maximum Speed of the Vessel was “85,” and concealed the exact and whole truth from ACE that the Maximum Speed of the Vessel was over one hundred miles per hour. The maximum speed of a vessel is, and at all 6
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page7 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
times relevant was, a material fact. In addition, to ACE, the maximum speed of a vessel is, and at all times relevant was, a material fact. (g) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that he was going to be the only “regular operator” of the Vessel and concealed the exact and whole truth from ACE that his brother, whose name is also Syed Ali, was going to be a regular operator as well. The identity of all regular operators of a vessel is, and at all times relevant was, material. (h) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that he was the primary owner of the Vessel and misrepresented to ACE on the Application that there were no additional owners, by leaving a blank in the section of the Application asking for “Additional Owners,” and concealed the exact and whole truth from ACE that his brother, whose name was also Syed Ali, was a co-owner of the Vessel. The identity of all owners of a vessel is, and at all times relevant was, material to a marine insurance risk. (i) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that the information placed on the application by him, or by someone else on his behalf and adopted by him, pertained to his brother, whose name was also Syed Ali, and concealed that it did not pertain to Defendant. This information is, and at all times relevant was, material. (j) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that to the best of his knowledge all statements on the Application were true and concealed the exact and whole truth from ACE that he had never seen the Application until after the loss, that the entries on the Application were not made by him and that all of the statements on the Application were not true. This information is, and at all times relevant was, material. (k) Defendant either intentionally or unintentionally misrepresented to ACE on the Application that the signature on the Application was his and concealed the
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
7
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page8 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
exact and whole truth from ACE that the signature on the Application was not his. This information is, and at all times relevant was, material. (l) ACE is informed and believes and on that basis alleges that Defendant either intentionally or unintentionally misrepresented and concealed certain other facts, material or otherwise. ACE will amend this complaint in a timely fashion once the substance of these other misrepresentations and concealments is ascertained. 17. In issuing the Policy to Defendant, ACE relied upon Defendant complying with his disclosure obligations under the general maritime law doctrine of utmost good faith, or uberrimae fidei: to voluntarily and spontaneously disclose all facts material to the risk, even if not asked; to disclose all facts material to the risk fully and accurately; to disclose the exact and whole truth on all matters inquired into by ACE; to not misrepresent or conceal, intentionally or unintentionally, material or not material, any information; and to ensure that all statements on the Application were true. 18. On or about January 8, 2013, ACE rescinded and voided the Policy, and denied all policy benefits demanded by or on behalf of Defendant. A true and correct copy of the letter rescinding and voiding the Policy and denying policy benefits is attached hereto as Exhibit “C” and is incorporated by reference herein. 19. ACE is informed and believes and on that basis alleges that Defendant contests the rescission and voiding of the Policy and has made threats to file a lawsuit against ACE if his claim is denied or not paid. Accordingly, ACE is forced to proceed with the filing of this action. FIRST CLAIM FOR RELIEF (Rescission of Marine Insurance Policy for Misrepresentation and Concealment) 20. 21. ACE realleges as though set forth herein the allegations of paragraph 1 As a result of the intentional or unintentional concealments and through 19 above, including all subparagraphs. misrepresentations of facts set forth above, ACE hereby exercises its rights under the doctrine of utmost good faith or uberrimae fidei, which is required of all parties to 8
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page9 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
marine insurance policies, including the insured and his agents and representatives, and as provided for by federal maritime law, and by California Insurance Code §§ 1900 – 1904, which is completely harmonious with, and materially the same as, federal maritime law on this issue, to rescind the maritime insurance policy, in its entirety against all persons or entities claiming an entitlement to benefits under the Policy. 22. 23. ACE has returned, or will in the near future return, all premiums paid to ACE has suffered and will continue to suffer irreparable and substantial SECOND CLAIM FOR RELIEF (Voiding of Marine Insurance Policy for Misrepresentation and Concealment) 24. 25. ACE realleges as though set forth herein the allegations of paragraphs 1 At all material times the Policy contained, under the heading “GENERAL through 23 above, including all subparagraphs. CONDITIONS AND EXCLUSIONS”, in clear and conspicuous language, the following unambiguous provision: CONCEALMENT, MISREPRESENTATION OR FRAUD: All coverage provided by us will be voided from the beginning of the Policy Period if you intentionally conceal or misrepresent any material fact or circumstance relating to this contract of insurance, or the application for such insurance, whether before or after a loss. 26. As a result of the intentional and unintentional concealments and ACE by Defendant on the Policy. harm if the Policy is not so rescinded.
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
misrepresentations of material facts as set forth above, ACE hereby exercises its rights to void the insurance policy in its entirety against all persons or entities claiming an entitlement to benefits under the Policy. 27. /// 9
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
ACE has suffered and will continue to suffer irreparable and substantial
harm if the Policy is not so voided.
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page10 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
THIRD CLAIM FOR RELIEF (Declaratory Relief Under 28 U.S.C. §§ 2201, et. seq.) 28. 29. ACE realleges as though set forth herein the allegations of paragraphs 1 There exists a genuine and bona fide dispute, and an actual controversy through 27 above, including all subparagraphs. between ACE and Defendant in that ACE contends that for the reasons set forth in paragraphs 1 through 26 inclusive, the Policy is null and void because of the Defendant’s misrepresentations and concealments of material facts made in the Application and during the underwriting process and, as a result, there is no Policy to provide coverage for the loss or damage allegedly sustained by the Vessel; whereas, Defendant claims that the Policy is not null and void and has made a demand for payment of benefits under the Policy. 30. Pursuant to the Uniform Declaratory Judgment Act, 28 U.S.C. §§ 2201, et. seq., ACE requests a judicial determination of the parties’ respective contentions, rights, and obligations under the Policy with regard to coverage. Such a determination is necessary and appropriate at this time because until the parties’ rights and obligations under the Policy are construed by the Court, ACE will suffer uncertainty with respect to those rights and obligations. WHEREFORE, ACE prays in the alternative as follows: 1. 2. 3. That the Court enter a judgment in ACE’s favor with costs, rescinding the That the Court enter a judgment in ACE’s favor with costs, voiding the That the Court enter a declaratory judgment in ACE’s favor with costs, Policy in its entirety; Policy ab initio; adjudging that ACE is not legally obligated to pay anyone any sum arising from or related to the damage or loss allegedly sustained by the Vessel; and/or /// /// 10
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case5:14-cv-00271-HRL Document1 Filed01/16/14 Page11 of 11
1 2 3 4 5 6 7 8 9 10 11
Cox Wootton Lerner
12400 WILSHIRE BOULEVARD, SUITE 1300 LOS ANGELES, CALIFORNIA 90025 TELEPHONE 310-979-9144
4. and proper.
That the Court grant such other and further relief as the Court deems just
DATED: January 16, 2014
COX WOOTTON LERNER GRIFFIN HANSEN & POULOS, LLP By: /s/ Neil S. Lerner NEIL S. LERNER Attorneys for Plaintiff, ACE AMERICAN INSURANCE COMPANY
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
11
COMPLAINT FOR RESCISSION AND VOIDING OF A MARINE INSURANCE POLICY AND DECLARATORY RELIEF

Published under a Creative Commons License By attribution, non-commercial
date: 
Thu, 2014-01-16
AttachmentSize
D.E. 1 COMPLAINT for Rescission and Voiding of a Marine Insurance Policy and Declaratory Relief against Syed Ali .pdf123.51 KB

Like us on facebook!