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

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

April 20, 2018

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, U.S. 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") (collectively, "Defendants") seeking a declaration of insurance coverage with respect to certain underlying matters.[1] (Dkt. 1.) Cushman has also brought claims against Illinois National and ACE for breach of contract and breach of the implied covenant of good faith and fair dealing, some of which have been dismissed.[2] (Id; dkt. 63.) Illinois National asserted twelve affirmative defenses and counterclaimed for declaratory relief and recoupment. (Dkt. 84.) ACE similarly asserted thirteen affirmative defenses and counterclaimed for recoupment. (Dkt. 115.) Liberty and RLI also asserted certain affirmative defenses. (Dkts. 108, 112.) Defendants now move for summary judgment in four separate motions, each seeking slightly different relief, as discussed further below. (Dkts. 203, 207, 210, 220.) Cushman also moves for partial summary judgment requesting entry of an order granting judgment in its favor as to counts I, III, IV, V, and VI and dismissing the counterclaims and corresponding affirmative defenses filed by Illinois National and ACE. (Dkt. 221.)[3] For the reasons stated below, Cushman's motion for partial summary judgment is granted in part and denied in part, Illinois National's motion for partial summary judgment is granted in part and denied in part, ACE's motion for summary judgment is denied, Liberty's motion for summary judgment is denied, and RLI's motion for summary judgment is denied.

         BACKGROUND[4]

         I. The Insurance Policies

         Cushman is the world's largest privately held commercial real estate services firm, offering, among other things, real estate appraisal services for a variety of property types. (Dkt. 225, Cushman's Local Rule 56.1 Statement of Material Facts ("Cushman Stmt.") ¶¶ 35-36.) Between 2009 and 2013, Cushman purchased a series of real estate professional liability insurance policies (collectively, the "Policies") from Defendants. (Id. ¶ 1.) The Policies were arranged in tiers, with each policy tier designed to kick in when the coverage provided by the lower-tier insurance policy was exhausted. Nottingham Indemnity, Inc. ("Nottingham"), Cushman's primary insurer during this time period, provided an initial $2 million layer of coverage subject to a $50, 000 deductible pursuant to a series of nearly identical annual or biannual policies (collectively, the "Nottingham Policies").[5] (Id. ¶ 2.) Illinois National served as Cushman's first-level excess insurer between 2009 and 2013 and sold Cushman four insurance policies during that time period (collectively, the "Illinois National Policies").[6] (Id. ¶ 3.) The Illinois National policies for the 2009-2010, 2010-2011, and 2011-2012 policy years each provided $23 million in coverage for sums exceeding $2 million. The policy for 2012-2013 provided $15 million in coverage for sums exceeding $2 million. (Id.; Dkt. 225, Pl. Exs. 2, 7, 9, 11.) ACE served as Cushman's second-level excess insurer for the 2009-2010 policy year and sold Cushman Policy No. XEO G23658495 002 (the "ACE Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Cushman Stmt. ¶ 3; Dkt. 225, Pl. Ex. 3.) The ACE Policy provided $10 million in coverage for sums exceeding $25 million. (Id.) Liberty and RLI served as Cushman's third-level insurers for the 2009-2010 policy year. Liberty sold Cushman Policy No. EO5N454658004 (the "Liberty Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Cushman Stmt. ¶ 3; Dkt. 225, Pl. Ex. 4.) Similarly, RLI sold Cushman Policy No. EPG0009165 (the "RLI Policy"), which was in effect from May 31, 2009 to May 31, 2010. (Cushman Stmt. ¶ 3; Dkt. 225, Pl. Ex. 5.) Both the Liberty Policy and the RLI Policy provided $7.5 million in coverage for sums exceeding $35 million, for a total of $15 million in coverage. (Cushman Stmt. ¶ 3; Dkt. 225, Pl. Exs. 4, 5.) The Cushman insurance tower for the 2009-2010 policy year is illustrated as follows[7]:

Level of Insurance

Insurance Company

Coverage Amount for 2009-2010 Policy Year

Primary Insurer

Nottingham

$2 million

First-Level Excess Insurer

Illinois National

$23 million for sums exceeding $2 million

Second-Level Excess Insurer

ACE

$10 million for sums exceeding $25 million

Third-Level Excess Insurer

Liberty

$7.5 million for sums exceeding $35 million

Third-Level Excess Insurer

RLI

$7.5 million for sums exceeding $35 million

         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." (Cushman Stmt. ¶ 5; Dkt. 225, Pl. Exs. 1, 6, 8A-B, 10 at § 1.)[8] Nottingham also agreed to defend Cushman and provided that it 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."[9] (Cushman Stmt. ¶ 14; Pl. Exs. 1, 6, 8A-B, 10 at § 2.) Further, the Nottingham Policies defined certain relevant terms as follows[10]:

• "Damages" means "[a]ny compensatory sum which an Insured is legally obligated to pay for any Claim" including judgments and settlements. (Cushman Stmt. ¶ 6; Dkt. 225, Pl. Exs. 1, 6, 8A-B, 10 at Defin. 3.)
• "Claims Expenses" are expenses incurred in the "investigation, adjustment, negotiation, arbitration, defense and appeal of any Suit or Claims for Damages." (Cushman Stmt. ¶ 7; Dkt. 225, Pl. Exs. 1, 6, 8A-B, 10 at Defin. 2.)
• "Wrongful Act" means "[a]ny actual or alleged act, error or omission committed in connection with the conduct of the Insured's Professional Services." (Cushman Stmt. ¶ 8; Dkt. 225, Pl. Exs. 1, 6, 8A at Defin. 9.)[11]
• "Professional Services" means "[a]ll services rendered or to be rendered by the Insured for or on behalf of customers or clients." (Cushman Stmt. ¶ 10; Dkt. 225, Pl. Exs. 1, 6 at Defin. 6.)[12]
• "Claim" means "[a] written demand for money or services naming any Insured and alleging a Wrongful Act to which this policy applies, " and "[f]or purposes of this definition, knowledge of a Claim or of a Wrongful Act that could reasonably be expected to result in a Claim shall mean knowledge by the General Counsel and Risk Manager of the Named Insured." (Cushman Stmt. ¶ 12; Dkt. 225, Pl. Exs. 1, 6, 8A-B, 10 at Defin. I.)[13]

         Defendants' Policies "follow[ed] form to" or adopted the terms and conditions of the Nottingham Policy for its year, unless expressly stated otherwise. (Cushman Stmt. ¶ 4.)

         In addition to laying out indemnification and defense obligations, certain policies also contained exclusions to coverage. Two such exclusions are relevant to the present case. The first-Endorsement # 5, Section 1 ("Endorsement 5"[14]) of the Illinois National Policies-states:

This policy does not apply to any Claim alleging, arising out of, based upon, resulting from, directly or indirectly, or in any way involving ... (a) the exercise of any authority or discretionary control by an Insured with respect to any client's funds or accounts; (b) any actual or alleged commingling of funds or monies; (c) an Insured selecting an investment manager, investment advisory or custodial firm; (d) any Insured advising as to, promising or guaranteeing the future value of any investment or any rate of return or interest; or (e) the failure of any investment to perform as expected or desired.[15]

(Id. ¶ 18; Dkt. 225, Pl. Exs. 2, 7, 9 at Endmt. 5; Pl. Ex. 11 at Endmt. 13.) The second-the "Prior Knowledge Exclusion" to the Nottingham Policies-states:

This Policy does not apply ... to any Claim arising from any Wrongful Act committed prior to the beginning of the Policy Period, if on or before the inception date of this Policy any Insured knew of such Claim or the occurrence of a Wrongful Act that could reasonably be expected to result in such Claim.

(Cushman Stmt. ¶ 30; Dkt. 225, Pl. Exs. 1, 6 at Excl. 8; Pl. Exs. 8A-B, 10 at Excl. 7.)

         The Nottingham Policies and the Illinois National Policies also contained provisions delineating when certain Wrongful Acts would be considered the same as or related to another Wrongful Act (the "Related Wrongful Act Provisions"). The Nottingham Policies provide:

If additional Claims are subsequently made which arise ou[t] of the same Wrongful Act as Claims already made and reported to the Company, all such Claims, whenever made, shall be considered first made when the earliest Claim arising out of such Wrongful Act was made and all such Claims shall be subject to one such Limit of Liability.
For purposes of the Limits of Liability, a series of continuous, repeated or interrelated Wrongful Acts shall be considered as one Wrongful Act.

(Dkt. 225, Pl. Exs. 1, 6, 8A-B, 10 at Limits of Liability.) The Illinois National Policies also state:

If during the Policy Period . . . (i) written notice of a Claim has been given to the Insurer ... or (ii) . . . written notice of circumstances that may reasonably be expected to give rise to a Claim has been given to the Insurer, then any Claim that is subsequently made against the Insureds and reported to the Insurer alleging, arising out of, based upon or attributable to the facts alleged in the Claim or circumstances of which such notice has been given, or alleging any Wrongful Act which is the same as or related to any Wrongful Act alleged in the Claim or circumstances of which such notice has been given, shall be considered made at the time such Claim or circumstances has been given to the Insurer.

(Cushman Stmt. ¶ 31; Dkt. 225, Pl. Exs. 2, 7, 9, 11 at § V(b).)

         II. The Underlying Claims

         From 2004 to 2007, certain Credit Suisse AG entities ("Credit Suisse") retained various Cushman subsidiaries to perform real estate appraisals in connection with loans made to developers of large, master-planned residential communities ("MPCs"). (Cushman Stmt. ¶¶ 38-39.) In preparing the appraisals, Cushman used a Total Net Value ("TNV") methodology.[16] (Id. ¶ 40.) TVN is defined as "the sum of the market value of the bulk lots of the entire planned community, as if all of the bulk lots were complete (in terms of backbone and infrastructure) and available for sale to merchant builders, as of the date of the appraisal. ... It does not reflect the deduction for developers profit or the time value of money." (Id. ¶ 44; See, e.g., Dkt. 225, Pl. Ex. 42 at 2.) Between 2008 and 2010, several of the loans went into default and lawsuits surrounding the use of the TNV appraisal method were brought against Cushman, certain of its subsidiaries, and others. (Cushman Stmt. ¶¶ 67-68.) Cushman's alleged role was to appraise the MPCs improperly using the TNV definition, which resulted in a higher valuation than a more standard "market value" appraisal. (Id. ¶ 73.) Credit Suisse could then allegedly earn fees by originating and servicing large syndicated loans using the MPCs as collateral. (Id. ¶ 72.) The claims included four specific claims (the "Underlying Claims") as well as a handful of additional claims arising out of the Credit Suisse appraisals (the "Other Claims"). (Id.) The Underlying Claims included (1) a January 3, 2010 putative class action lawsuit filed in the District of Idaho on behalf of property owners in various MPCs, Gibson v. Credit Suisse AG, No. 1:10-cv-00001 (the "Gibson Action")[17]; (2) a November 2010 demand by a hedge fund that purchased shares of syndicated loans Credit Suisse originated using the appraised properties as collateral (the "Highland Demand")[18]; (3) a February 14, 2012 lawsuit filed in the District of Colorado by a shareholder in a MPC developer, Blixseth v. Cushman & Wakefield of Colorado, Inc., No. 1:12-cv-00393 (the "Blixseth Action"); and (4) a January 25, 2013 third-party lawsuit filed in the United States Bankruptcy Court for the District of Nevada by a MPC developer, Rhodes v. Credit Suisse AG, No. 2:12-cv-01272 (the "Rhodes Action"). (Id. ¶¶ 67-71, 75; Dkt. 225, Pl. Exs. 12, 16, 19, 23.)

         More specifically, plaintiffs in the Gibson Action are individuals and entities that purchased homes or lots at four MPCs: Lake Las Vegas, Yellowstone Club, Tamarack, and Ginn sur Mer. (Dkt. 208, Illinois National's Local Rule 56.1 Statement of Material Facts ("Illinois National Stmt.") ¶ 26.) Timothy Blixseth, founder; manager; and developer of Yellowstone, filed the Blixseth Action.[19] (Id. ¶ 47.) The Highland Demand involved plaintiffs whose claims arose out of loans involving, among others, Yellowstone Club, Ginn Clubs & Resorts, and Rhodes Ranch. (Id. ¶ 37.) Finally, the Rhodes Action was brought by certain borrowers, including Rhodes Ranch. Not only did the Underlying Claims involve overlapping properties, but all Underlying Claims also alleged that Credit Suisse and Cushman conspired to intentionally overvalue the MPCs so Credit Suisse could generate fees and that the TNV appraisals were inherently misleading. (Id. ¶ 55; Cushman Stmt. ¶¶ 72-73.) Plaintiffs in the Gibson Action claimed that the alleged scheme began at Lake Las Vegas and was repeated at various properties around the country. (Dkt. 225, Pl. Ex. 14 ¶ 53.)

         The court in the Gibson Action granted Cushman's motion for summary judgment and dismissed the case with prejudice as to Cushman. (Cushman Stmt. ¶ 83; Dkt. 225, Pl. Ex. 15.) Plaintiffs appealed to the Ninth Circuit and the case was argued on February 9, 2018. See Gibson v. Credit Suisse Group Securities, No. 16-35705 (9th Cir. Aug. 29, 2016). The parties await a decision from the appellate court. The court in the Blixseth Action dismissed the case in a decision subsequently upheld by the Tenth Circuit. (Cushman Stmt. ¶ 86; Dkt. 225, Pl. Exs. 17-18.) The Highland Demand was settled for $12 million while the Rhodes Action was settled for $362, 500. (Cushman Stmt. ¶ 87; Dkt. 225, Pl. Exs. 22, 24.)

         III. Notice of and Communications Related to the Underlying Claims

         A. The Gibson Action

         Cushman provided notice to Defendants of the Gibson Action on January 12, 2010, during the 2009-2010 policy period. (Cushman Stmt. ¶ 90; Dkt. 225, Pl. Ex. 45.) After receiving notice, Illinois National sent Cushman a reservation of rights letter on February 9, 2010, accepting the Gibson Action as a Claim under the 2009-2010 Illinois National Policy. (Cushman Stmt. ¶ 91; Dkt. 225, Pl. Ex. 46.) The letter also contained the following statement: "This letter is not, and should not be construed as a waiver of any terms, conditions, exclusions or other provisions of the [Illinois National] Policy, or any other policies of insurance issued by Illinois National or any of its affiliates." (Dkt. 225, Pl. Ex. 46.)

         B. The Highland Demand

         In October 2010, Cushman advised Illinois National of claims alleged by Highland Capital in an email noting that Cushman was providing some "supplemental information related to the LJ. Gibson and Beau Blixseth legal action." (Cushman Stmt. ¶ 90, Dkt. 225, Pl. Ex. 47; Illinois National Stmt. ¶ 64.) On October 7, 2010, Cushman's Risk Manager emailed Cushman's broker and informed her that since the Highland matter "is directly related to the Credit Swiss [sic] claim reported to underwriters in the 2009-2010 policy year, please treat the Highland Capital matter as a continuation of the same claim and report to the underwriters under the 2009- 2010 program." (Illinois National Stmt. ¶ 65; Dkt. 209, Illinois National Ex. FF.) Cushman also reached out to Illinois National in March 2011 to confirm that its insurers agreed that the Highland matter should be treated as related to the Gibson Action, and Cushman explained to Illinois National in April 2011:

The Highland Capital claim was categorized as a subset of the Credit Suisse claim because its genesis is [] many of the same loans made by Credit Suisse based upon the appraisal work performed by [Cushman], all at issue in the Gibson lawsuit. Highland Capital funds were members of the syndicates established by Credit Suisse in connection with the syndication of the various resort loans.

(Illinois National Stmt. ¶¶ 68-70; Dkt. 209, Illinois National Exs. GG, HH, II.) Cushman and Highland also entered into a tolling agreement in 2010 in an attempt to find an amicable resolution and avoid litigation; this agreement was terminated on June 11, 2013. (Illinois National Stmt. ¶¶ 35-36, 95; Dkt. 209, Illinois National Ex. QQ.) Just before this termination, Cushman's loss run (as of May 31, 2013) listed the Gibson Action, the Highland Demand, and the Blixseth Action under the 2009-2010 policy year, and bracketed the three matters together. (Illinois National Stmt. ¶ 103; Dkt. 209, Illinois National Ex. UU.) Similarly, on June 14, 2013, Cushman asked that the insurers be notified that the "Highland Capital claim, reported in the 2009/2010 claim year, " was no longer dormant and that Highland Capital affirmatively stated it would bring suit against Cushman. (Illinois National Stmt. ¶ 100; Dkt. 209, Illinois National Ex. TT.) The email also asked that notice to the insurer be provided "for that particular claim year." (Id.) But by July 23, 2013, Cushman asserted, "[U]pon reviewing the Highland lawsuits and other documents, we noted numerous distinguishing characteristics of Highland's claims as compared to Gibson/Blixseth's claims that lead us to believe that the claims should be paid out of the 2010/11 claim year based on the timing of Highland's notice of the claims to [Cushman]."[20] (Illinois National Stmt. ¶ 99; Dkt. 209, Illinois National Ex. SS.)

         C. The Blixseth Action

         Cushman also put Illinois National on notice of Timothy Blixseth's intervening complaint in the Gibson Action on July 25, 2011, noting that the "factual background for the new complaint is substantively identical to that of the existing Gibson action." (Illinois National Stmt. ¶ 43; Dkt. 209, Illinois National Ex. W.) On April 24, 2012, Cushman's risk management department asked that the insurers be put on notice of the Blixseth Action and advised that it "is related to the Gibson/Credit Suisse claim filed in the 2009-2010 year." (Illinois National Stmt. ¶ 73, Dkt. 209, Illinois National Ex. JJ.)

         D. The Notice of Circumstances and Supplemental Reservation of Rights

         In June 2012, approximately two years after receiving notice of the Gibson Action, Illinois National requested that Cushman provide it with a notice of circumstances ("NOC") for all other TNV appraisals. (Cushman Stmt. ¶ 95; Dkt. 225, Pl. Ex. 50.) Cushman sent a NOC letter on June 28, 2012, which attached a list of appraisals done using the TNV method of which Cushman was aware and stated that with regard to future claims based on TNV appraisals, "to the extent a 'Claim' is ultimately made against the Tnsureds' for an alleged 'Wrongful Act' as discussed below, you shall treat the 'Claim' as having been made during the currency of policy no. 01-880-59-08 for the 2011-2012 policy year." (Cushman Stmt. ¶ 95; Dkt. 225, Pl. Ex. 51.) Illinois National acknowledged receipt of the NOC on July 9, 2012, and provided an initial coverage position, reserving rights under the 2011-2012 Illinois National Policy. (Cushman Stmt. ¶ 96; Dkt. 225, Pl. Ex. 52.)

         On August 7, 2012, Illinois National issued a supplemental reservation of rights letter, which pointed out potential defenses based on Endorsement 5, the Prior Knowledge Exclusion, and fortuity. (Cushman Stmt. ¶ 99; Dkt. 225, Pl. Ex. 53.) The letter also asserted that the Underlying Claims all related to the Gibson Action, and thus fell within coverage of the 2009-2010 Policies, "because the appraisals performed on the four MPC projects all used the [TNV] method." (Cushman Stmt. ¶ 102; Dkt. 225, Pl. Ex. 53 at 5.) In November 2012, Illinois National further notified Cushman that any appraisal listed in the NOC would be deemed to fall under the 2009-2010 policy period, and that the 2011-2012 claim file would be closed. (Cushman Stmt. ¶ 106; Dkt. 225, Pl. Ex. 54.) On May 21, 2013, Cushman sent a letter to Illinois National stating that it disagreed with Illinois National's conclusion that "all claims which may be made in the future that claim some damages resulting from Total Net Value Appraisals are related to the Gibson class action suit and the Blixseth suit and should be considered as one claim under the 2009-2010 policy." (Dkt. 225, Pl. Ex. 57.) On January 24, 2014, Illinois National again issued a supplemental reservation of rights letter, stating that it had "discovered" additional factual bases for its assertion that coverage for the Underlying Claims was barred by the Prior Knowledge Exclusion and/or because they were "fortuitous." (Id.¶ 112; Dkt. 225, Pl. Ex. 64.)

         D. The Rhodes Action

         Meanwhile, on April 1, 2013, Cushman gave notice of the Rhodes claim. (Cushman Stmt. ¶ 107; Dkt. 225, Pl. Ex. 55.) On April 7, 2013, Illinois National acknowledged receipt of the notice of claim, citing to the 2012-2013 Illinois National Policy. (Cushman Stmt. ¶ 107; Dkt. 225, Pl. Ex. 56.) Four months later, on July 26, 2013, Illinois National determined that "[u]pon further review of the Rhodes Complaint, " it related to the Gibson Action, and thus would be considered under the 2009-2010 policy year. (Cushman Stmt. ¶ 108; Dkt. 225, Pl. Ex. 59.)

         IV. The Standstill Agreement

         On April 14, 2014, Cushman, Illinois National, and ACE entered into a Standstill Agreement in an effort to secure payment for the Highland and Rhodes settlements and to ensure that defense costs for the Gibson and Blixseth Actions would continue to be paid. (Cushman Stmt. ¶ 136; Dkt. 225, Pl. Ex. 69.) Illinois National and ACE agreed to equally split the ongoing defense costs related to the Underlying Claims, Illinois National agreed to fund the Rhodes settlement for $362, 500, and Illinois National and ACE agreed to fund the Highland settlement, with Illinois National paying $10 million and ACE paying $2 million. (Id.) The parties agreed to table an ongoing issue of whether Illinois National and ACE had any rights to recoupment. (Cushman Stmt. ¶ 136-37; Dkt. 225, Pl. Ex. 69.) To date, Illinois National has paid more than $26 million and ACE has paid more than $7 million in defense and indemnity payments for the Underlying Claims. (Cushman Stmt. ¶¶ 88-89; Dkt. 225, Pl. Exs. 70-71.)

         V. Overview of the Motions for Summary Judgment

         Defendants and Cushman have each filed separate motions for summary judgment. Given the complexity and disparate nature of the relief sought by the parties, the details of each motion are outlined below.

         A. Illinois National's Motion for Summary Judgment

         Illinois National asks the court to declare that Endorsement 5 of the Illinois National Policies and the Prior Knowledge Exclusion of the Nottingham Policies apply to preclude all coverage under the Illinois National Policies for the Underlying Claims, and to grant judgment in its favor on Illinois National's counterclaim for recoupment of all defense costs and indemnity payments in an amount to be determined by the court. (Dkt. 207.) In the alternative, Illinois National seeks a declaration that the Blixseth Action, the Highland Demand, and the Rhodes Action are related to the Gibson Action, which would trigger only the 2009-2010 Illinois National Policy, and asks the court to order Cushman to reimburse Illinois National for all payments of defense costs and indemnity in excess of the $23 million Illinois National limit. (Id.) In the second alternative, Illinois National asks the court to find and declare that Endorsement 5 and the Prior Knowledge Exclusion apply to exclude coverage for the Blixseth Action, the Highland Demand, and the Rhodes Action under the 2011, 2012, and 2013 Illinois National Policies, and order that Cushman reimburse Illinois National for all payments of defense costs and indemnity paid for the Blixseth Action, the Highland Demand, and the Rhodes Action. (Id.)

         B. ACE's Motion for Summary Judgment

         ACE moves for summary judgment on count III (declaratory relief against ACE), asking the court to declare that the ACE Policy does not provide coverage for the matters described in the Complaint. (Dkt. 210.) Unlike Illinois National, ACE contends that the Blixseth Action, the Highland Demand, and the Rhodes Action are not related to the Gibson Action. In other words, each action triggers coverage under a separate policy year and the ACE Policy is not triggered because the primary and first-insurer policies have not been exhausted. (Dkt. 213.) ACE further argues that the ACE Policy has not been triggered because all loss arising from the Gibson Action, the Blixseth Action, and the Rhodes Action is precluded by Endorsement 5. (Id.) ACE also moves for summary judgment on count X (breach of contract against ACE as it pertains to the Standstill Agreement) under the theory that Cushman has failed to establish damages attributable to ACE. (Id.) Finally, ACE asks the court to grant judgment on its counterclaim for recoupment of amounts advanced pursuant to the Standstill Agreement because, according to ACE, the ACE Policy has not been triggered. (Id.)

         C. Liberty Mutual's Motion for Summary Judgment

         Like ACE, Liberty Mutual requests a declaration that each of the Underlying Claims is covered under a separate policy year because, among other reasons, the Blixseth Action, the Highland Demand, and the Rhodes Action are not related to the Gibson Action. Such a declaration would mean that the Liberty Policy is not triggered because the primary, first-insurer and second-insurer policies have not been ...


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