N.H. Ins. Co. v. Ace Ina Holdings Inc.

Decision Date30 June 2010
Docket NumberNos. 07 CV 2898, 09 CV 2026.,s. 07 CV 2898, 09 CV 2026.
Citation722 F.Supp.2d 948
PartiesAMERICAN INTERNATIONAL GROUP, INC., AIG Casualty Company f/k/a, Birmingham Fire Insurance Company of Pennsylvania, AIU Insurance Company, American Home Assurance Company, American International Pacific Insurance Company f/k/a American Fidelity Company, American International South Insurance Company f/k/a American Global Insurance Company, American International Specialty Lines Insurance Company f/k/a Alaska Insurance Company, Commerce and Industry Insurance Company, Inc., Granite State Insurance Company, Inc., Illinois National Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, New Hampshire Indemnity Company, and New Hampshire Insurance Company, Plaintiffs, v. ACE INA HOLDINGS, INC., ACE INA Holdings, Inc., Advantage Workers Compensation Insurance Company, Alaska National Insurance Company, Amtrust Group, Berkley Risk Administrators Co. LLC, Chubb Group of Insurance Companies, Cincinnati Insurance Company, Cigna Group Inc., Companion Property & Casualty Insurance Company, the Covenant Group, Crum & Forester, Guard Insurance Company, General Casualty Insurance Companies, Harleysville Insurance Group, the Hartford Financial Services Group, Inc., Liberty Mutual Group, Inc., Memic Indemnity Company, Safeco Corporation, Travelers Insurance Group, Sentry Insurance Group, Truck Insurance Exchange, and Utica National Insurance Co., Defendants. Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Liberty Insurance Corp., the First Liberty Insurance Corp., Employers Insurance Company of Wausau, Wausau Business Insurance Company, Wausau General Insurance Company, and Wausau Underwriters Insurance Company, Counter-Claimants, v. American International Group, Inc., AIG Casualty Company f/k/a, Birmingham Fire Insurance Company of Pennsylvania, AIU Insurance Company, American Home Assurance Company, American International Pacific Insurance Company f/k/a American Fidelity Company, American International South Insurance Company f/k/a American Global Insurance Company, American International Specialty Lines Insurance Company f/k/a Alaska Insurance Company, Commerce and Industry Insurance Company, Inc., Granite State Insurance Company, Inc., Illinois National Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, New Hampshire Indemnity Company, and New Hampshire Insurance Company, Counter-Defendants. Safeco Insurance Company of America and Ohio Casualty Insurance Company, individually, and on behalf of a class consisting of members of the National Workers Compensation Reinsurance Pool, Plaintiffs, v. American International Group, Inc., AIG Casualty Company f/k/a, Birmingham Fire Insurance Company of Pennsylvania, AIU Insurance Company, American Home Assurance Company, American International Pacific Insurance Company f/k/a American Fidelity Company, American International South Insurance Company f/k/a American Global Insurance Company, American International Specialty Lines Insurance Company f/k/a Alaska Insurance Company, Commerce and Industry Insurance Company, Inc., Granite State Insurance Company, Inc., Illinois National Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, New Hampshire Indemnity Company, and New Hampshire Insurance Company, Defendants.
CourtU.S. District Court — Northern District of Illinois

OPINION TEXT STARTS HERE

COPYRIGHT MATERIAL OMITTED.

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Rowe W. Snider, Daniel I. Schlessinger, John F. Kloecker, Margaret Marcia Schuchardt, Matthew T. Furton, Patrick Sean Coffey, Locke Lord Bissell & Liddell LLP, Andrew Dylan Campbell, Stephen Novack, John F. Shonkwiler, Patrick A. Fleming, Novack and Macey LLP, William M. Hannay, Charles H. R. Peters, Lisa Michelle Natter, Marci A. Eisenstein, Thomas John Henehan, Schiff Hardin LLP, Chicago, IL, Graham J. Hill, Locke Lord Bissell & Liddell LLP, Houston, TX, Brendan N. Snodgrass, Jennifer J. Barrett, Michael B. Carlinsky, Quinn Emanuel Urquhart Oliver & Hedges LLP, New York, NY, for Plaintiffs, Counter-Defendants.

Harry N. Arger, Renee Lynn Zipprich, Michael Cullen Borders, Elizabeth Coker Osborne, Rosa Maria Tumialan-Landy, Dykema Gossett PLLC, Meredith Deddish Schacht, Michael D. Sher, Athanasios Papadopoulos, Emily Mulder Milman, Neal, Gerber & Eisenberg, Edward P. Gibbons, Christopher A Wadley, Walker, Wilcox, Matousek LLP, Richard Patrick Darke, Duane Morris LLP, Daniel Richard Formeller, Katherine Louise Haennicke, Todd S. Schenk, Tressler, Soderstrom, Maloney & Priess, Daniel G. Litchfield, Omar S. Odland, Litchfield Cavo LLP, James I. Rubin, Amy B. Kelley, James A. Morsch, Jason S. Dubner, Mark A. Schwartz, Butler Rubin Saltarelli & Boyd LLP, Norman K. Beck, Courtney M. Oliva, Samantha Lyn Maxfield, Timothy John Rooney, Winston & Strawn LLP, Christopher S. Naveja, Hal R. Morris, Nicole A. Gross, Arnstein & Lehr, LLP, Dan L. Boho, David Alfini, James Constantine Vlahakis, Hinshaw & Culbertson, Edward W. Feldman, Marc Oliver Beem, Roger J. Perlstadt, Miller Shakman & Hamilton, LLP, Chicago, IL, Christine Megna Van Gelder, Kimball Ann Lane, Thomas R. Newman, Duane Morris LLP, New York, NY, Christopher A. Thompson, David T. Moran, Jackson Walker LLP, Dallas, TX, Stephen C. Borgsdorf, Dykema Gossett PLLC, Ann Arbor, MI, Stacy X. Allen, Jeffery R. Johnson, Marilyn Marie Montano, Jackson Walker LLP, Austin, TX, for Defendants, Counter-Defendants.

James I. Rubin, Amy B. Kelley, James A. Morsch, Jason S. Dubner, Mark A. Schwartz, Butler Rubin Saltarelli & Boyd LLP, Chicago, IL, for Counter-Claimants.

MEMORANDUM OPINION AND ORDER

ROBERT W. GETTLEMAN, District Judge.

American Insurance Group, Inc. (AIG) and its affiliates and subsidiaries, AIG Casualty Company f/k/a Birmingham Fire Insurance Company of Pennsylvania, AIU Insurance Company, American Home Assurance Company, American International Pacific Insurance Company f/k/a American Fidelity Company, American International South Insurance Company f/k/a American Global Insurance Company, American International Specialty Lines Insurance Company f/k/a Alaska Insurance Company, Commerce and Industry Insurance Company, Inc., Granite State Insurance Company, Illinois National Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, New Hampshire Indemnity Company, and New Hampshire Insurance Company (collectively the “AIG Companies” and with AIG, Plaintiffs/AIG Defendants/Class Defendants) have filed a ten-count first amended complaint against defendants/counter-plaintiffs: the National Worker's Compensation Reinsurance Pool (“NWCRP” or the “Pool”); the Pool's administrator and attorney-in-fact, the National Council on Compensation Insurance, Inc. (NCCI); 1 and nineteen insurance companies that have served on the Board of Governors of the Pool (the “Pool Board Members”), including Liberty Mutual Group (Liberty Mutual), Travelers Insurance Group (“Travelers”), The Hartford Financial Services Group (together with its subsidiaries, “The Hartford”), and ACE INA Holdings, Inc. (“ACE”, together with Liberty Mutual, Travelers, and The Hartford, collectively the RICO Defendants), and Sentry, an insurance company that participates in the Pool and allegedly underreported premium data (together with the RICO Defendants, collectively the “Underreporting Participating Companies”).

The amended complaint alleges violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c) and (d) (RICO), against the RICO Defendants (Counts One and Two), civil conspiracy against the RICO Defendants (Count Three), breach of fiduciary duty against the Pool Board Members (Count Four), two counts of fraud against the Underreporting Participating Companies (Counts Five and Six), breach of contract against the Underreporting Participating Companies (Count Seven), unjust enrichment against the Underreporting Participating Companies (Count Eight), equitable accounting against the Underreporting Participating Companies, the Pool, and NCCI (Count Nine), and an action on an open, mutual, and current account against the Underreporting Participating Companies, the Pool, and NCCI (Count Ten).

The Underreporting Participating Companies have moved to dismiss Counts One through Four and Count Eight for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). The Pool Board Members who have not allegedly underreported their premium data, including Advantage Workers Compensation Insurance Company, Alaska National Insurance Company, Amtrust Financial Service, Inc., Berkley Risk Administrators Company LLC, Chubb & Son, a Division of Federal Insurance Company, Cincinnati Insurance Company, Companion Property & Casualty insurance Company, GUARD Insurance Group, Inc., General Casualty Company of Wisconsin, Harleysville Mutual Insurance Company, MEMIC Indemnity Company, Safeco Insurance Company of America, Trust Insurance Exchange, and Utica Mutual Insurance Company (collectively the Non-Underreporting Pool Board Members) have moved to dismiss Count Four pursuant to Rule 12(b)(6). Finally, NWCRP and NCCI have each independently moved to dismiss Counts Nine and Ten on various grounds.

Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Liberty Insurance Company, and The First Liberty Insurance Corporation (collectively the Liberty Plaintiffs) together with Employers Insurance Company of Wausau, Wausau Business Insurance Company, Wausau General Insurance Company, and Wausau Underwriters Insurance Company (collectively the “Wausau Plaintiffs,” and together with the Liberty Plaintiffs the “Liberty Parties), have brought a ten count counterclaim alleging: violations of RICO, 18 U.S.C. §§ 1962(c) and (d), against AIG (Claims...

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