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Cushman & Wakefield, Inc. v. Illinois National Insurance Co.

United States District Court, N.D. Illinois, Eastern Division

May 11, 2015

CUSHMAN & WAKEFIELD, INC., Plaintiff,
v.
ILLINOIS NATIONAL INSURANCE COMPANY, ACE AMERICAN INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE COMPANY, and RLI INSURANCE COMPANY, Defendants.

OPINION AND ORDER

JOAN H. LEFKOW, District Judge.

Cushman & Wakefield, Inc. ("Cushman") filed a twelve-count complaint against Illinois National Insurance Company ("Illinois National"), ACE American Insurance Company ("ACE"), Liberty Mutual Insurance Company ("Liberty"), and RLI Insurance Company ("RLI") seeking a declaration of insurance coverage with respect to certain underlying matters. (Dkt. 1 ("Compl.").) Cushman also brings claims for breach of contract and breach of the implied covenant of good faith and fair dealing. (Id. ) ACE has moved to dismiss three of the four claims brought against it (counts III, IX, and XII) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. 63.) ACE has also moved to strike Cushman's requests for consequential damages, attorney's fees, and punitive damages. (Id. ) For the reasons stated below, ACE's motion is granted in part and denied in part.[1]

BACKGROUND[2]

I. The Parties

Cushman is a corporation organized under the laws of New York, with its principal place of business in New York. (Compl. ¶ 14.) Cushman is the world's largest privately held commercial real estate services firm and offers, among other things, real estate appraisal services for a variety of property types. (Id. ¶ 2.)

Both Illinois National and RLI are corporations organized under the laws of Illinois, with their principal places of business in Illinois.[3] (Id. ¶¶ 15, 18.) ACE is a Pennsylvania corporation and maintains its principal place of business in Pennsylvania. (Id. ¶ 16.) Liberty Mutual is a corporation organized under the laws of Massachusetts, with its principal place of business in Massachusetts. (Id. ¶ 17.) The defendants are insurance companies that sold Cushman the claims-made excess insurance policies discussed below.

II. The Insurance Policies

Between 2009 and 2013, Cushman arranged its insurance policies in tiers, with each level of policy designed to kick in when the coverage provided by the lower level of insurance became exhausted. Nottingham Indemnity, Inc. ("Nottingham") served as Cushman's primary insurer during this time period and provided Cushman $2 million in coverage for each respective policy year. (Id. ¶ 23.) Under "the Nottingham Policies, " Nottingham agreed to indemnify Cushman for "all sums in excess of the Deductible which the Insured shall become legally obligated to pay as Damages and Claims Expenses for claims first made against the Insured during the Policy Period... as a result of a Wrongful Act of the Insured... aris[ing] out of the rendering or failure to render Professional Services." (Id. ¶ 24 (first alteration in original).) The Nottingham Policies also agreed to defend Cushman and provided that Nottingham had "the sole right to appoint counsel and the right and duty to defend any Claim or Suit brought against the Insured seeking Damages on account of a Wrongful Act even if such Claim or Suit is groundless, false or fraudulent." (Id. ¶ 25.) Each of the excess policies issued to Cushman by the defendants is subject to all of the terms and conditions of the Nottingham Policies, unless expressly stated otherwise, and thus contains both indemnity and defense obligations. (Id. ¶¶ 23, 28, 30, 32.)

Illinois National served as Cushman's first-level excess insurer between 2009 and 2013 and sold Cushman four insurance policies during that time period ("the Illinois National Policies") that sat directly above the Nottingham Policies:

(1) Policy No. 01-911-84-71, which was in effect from May 31, 2009 to May 31, 2010 and provided $23 million in coverage for sums exceeding $2 million;
(2) Policy No. 01-877-33-21, which was in effect from May 31, 2010 to May 31, 2011 and provided $23 million in coverage for sums exceeding $2 million;
(3) Policy No. 01-880-59-08, which was in effect from May 31, 2011 to June 30, 2012 and provided $23 million in coverage for sums exceeding $2 million; and
(4) Policy No. 0230588092, which was in effect from June 30, 2012 to August 31, 2013 and provided $15 million in coverage for sums exceeding $2 million.

(Id. ¶ 21.)

ACE served as Cushman's second-level excess insurer for the 2009-10 policy year and sold Cushman Policy No. XEO G23658495 ("the ACE Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Id. ¶ 27.) The ACE Policy provided $10 million in coverage for sums exceeding $25 million. (Id. ¶ 27-28.)

Liberty and RLI served as Cushman's third-level excess insurers for the 2009-10 policy year. Liberty sold Cushman Policy No. EO5N454658004 ("the Liberty Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Id. ¶ 29.) Similarly, RLI sold Cushman Policy No. EPG0009165 ("the RLI Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Id. ¶ 31.) Both policies sat directly above the ACE Policy, and each provided $7.5 million in coverage for sums exceeding $35 million, for a total of $15 million in coverage. (Id. ¶¶ 29-32.)

Thus, the arrangement of Cushman's insurance policies for the 2009-10 policy year can be ...


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