Case 1:08-cv-01760-WYD-MEH Document 1 Filed 08/18/08 USDC Colorado Page 1 of 10

UNITED STATES DISTRICT COURT

DISTRICT OF COLORADO

Civil Action No.:

THE MARIANIST PROVINCE OF THE

UNITED STATES, INC., SOCIETY OF
MARY, PROVINCE OF ST. LOUIS and at
other times, RONCALLI HIGH SCHOOL,

Plaintiff,

vs.

ACE USA, a Pennsylvania Corporation, and affiliated

Insurer INSURANCE COMPANY OF NORTH
AMERICA (“INA”), a Pennsylvania, Corporation,

Defendants.

COMPLAINT FOR BREACH OF CONTRACT, BAD FAITH, VIOLATION OF

COLORADO UNFAIR CLAIMS-DECEPTIVE PRACTICES ACT, AND COLORADO
CONSUMER PROTECTION ACT with JURY DEMAND

COMES NOW Plaintiff The Marianist Province of the United States, Inc., Society of

Mary, Province of St. Louis and at other times Roncalli High School, through counsel William J.

Brady of Grimshaw & Harring, P.C., and for its Complaint seeking damages for breach of

contract, bad faith, violation of the Colorado Unfair Claims-Deceptive Practices Act, and the

Colorado Consumer Protection Act against Defendant ACE USA and affiliated insurer Insurance

Company of North America (“INA”), alleges and avers as follows:

I. PARTIES, JURISDICTION AND VENUE

1. Plaintiff The Marianist Province of the United States, Inc., Society of Mary,

Province of St. Louis and at other times Roncalli High School (hereinafter “The Marianists”) is a

Missouri corporation having its principal place of business in St. Louis, Missouri.
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2. Upon information and belief, Defendant ACE USA is an insurance company

incorporated in Pennsylvania, having its principal place of business in Philadelphia,

Pennsylvania, and has succeeded to the rights and obligations under certain policies of insurance

issued by Defendant INA to The Marianists, and by virtue thereof has acquired successor

liability for all policies pertinent to this civil action.

3. Upon information and belief, Defendant INA is an insurance company

incorporated in Pennsylvania, having its principal place of business in Philadelphia,

Pennsylvania, and is an ACE USA affiliated insurance company.

4. Jurisdiction is based on diversity of citizenship under 28 U.S.C. §1332 to

determine real and justiciable controversies among the parties hereto, who reside in states other

than that of The Marianists, as well as based upon the amount in controversy being in excess of

$75,000 and the jurisdictional limits of the court, as well as The Marianists and ACE USA and/or

INA doing business in and maintaining sufficient contacts with the State of Colorado.

5. Venue is proper pursuant to 28 U.S.C. §1391 (a) because a substantial part of the

events or omissions giving rise to the claim for insurance coverage occurred in the District of

Colorado, the underlying controversies giving rise to the claim for insurance coverage occurred

and are currently proceeding in Colorado, and arise under Colorado law.

II. FACTS GIVING RISE TO COMPLAINT

6. INA, upon information and belief, acting in its capacity as an affiliated company

of ACE USA, is and was at all times herein mentioned in the business of insuring and providing

commercial general liability (“CGL”) coverage for members of the general public, including The

Mariansts and other policyholders doing business in Colorado, as well as consumers not a party

to this action who are similarly situated to Plaintiff.

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7. INA issued CGL contracts of insurance to The Marianists as a named insured,

otherwise known and numbered as INA policy numbers AGP 1 99 23 (1/10/68-1/10/71); AGP 2

09 51 (1/10/71-1/10/73); AGP 12 91 93 (1/10/73-1/10/76); AGP 13 96 72 (issued for 1/10/76-

1/10/79, cancelled effective 1/10/76), for the period commencing January 10, 1968 through and

including January 10, 1976, and said CGL policies were in effect at all times pertinent hereto.

8. Upon information and belief, said CGL policies covered the activities and

operations of the named insured, including inter alia, Roncalli High School specifically, a

Catholic boys’ school, operated by The Marianists under the direction and control of, and owned

by, the Bishop of Pueblo, and hazards arising therefrom as provided by the policy insuring

agreements, terms and conditions, and which operations have allegedly resulted in injuries,

damages and losses as set forth in multiple complaints filed in legal proceedings naming the

Bishop of Pueblo and The Marianists as Defendants (hereinafter “the Underlying Complaints”).

9. Each CGL policy contained both a duty to defend and a duty to indemnify The

Marianists for injuries, damages and losses arising from certain of its activities and operations,

including but not limited to personal injury as provided by the policy insuring agreements, terms

and conditions.

10. Upon information and belief, certain activities and operations of The Marianists

both before and during the insurance policy coverage periods have allegedly resulted in injuries,

damages and losses, including but not limited to personal injury, as more fully set forth in the

Underlying Complaints.

11. The Underlying Complaints further state that both before and during the said

insurance policy coverage periods, and during pendency of Marianist teaching responsibilities at

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Roncalli High School, a certain Brother in the service of The Mariansts allegedly engaged in

conduct detrimental to the well being of some of the students.

12. ACE USA and INA is and was at all times herein mentioned in the business of

insuring and providing CGL coverage for members of the general public, including The

Marianists.

13. Despite repeated and persistent requests from The Marianists to ACE USA, and

INA through its affiliated insurance company ACE USA, both insurance companies have

persistently and repeatedly refused to provide full coverage to The Marianists, as required by the

CGL policies of insurance and Colorado law, thus wrongfully denying their contractual

obligations under the policies, including, inter alia, failing to timely reimburse The Marianists

for onerous defense costs for more than a two year period after having agreed to defend,

continuing to delay and deny payment of a portion of reasonable defense costs, refusing to

meaningfully participate in settlement negotiations by not fully honoring their indemnification

obligation, requiring burdensome and unwarranted participation from The Marianists, permitting

reasonable settlement opportunities to expire, and generally placing their own interests ahead of

their policyholder by not acting in its best interests.

14. Once the lawsuits, which are the subject of the Underlying Complaints, have been

concluded by way of settlement or otherwise, ACE USA and/or INA are obligated to The

Marianists for full indemnification for actual losses as defined by said CGL policies, up to their

limits of liability, as well as reimbursement for all fees and costs expended in the defense of the

Underlying Complaints.

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15. Said CGL policies constitute valid contracts of insurance, for which premiums

were paid upon the reasonable expectation of insurance coverage for claims alleged against The

Marianists in the Underlying Complaints.

16. Upon information and belief, The Marianists have performed all conditions

precedent arising under said CGL policies, including giving timely notice and tendering defense

to ACE USA and INA.

FIRST CLAIM FOR RELIEF

(Breach of Contract)

17. All of the prior allegations are incorporated by reference herein as if fully set

forth.

18. The Marianists seek damages for breach of contract in an amount which will

provide appropriate payments for each of the coverages existing under the aforesaid policies, and

to further provide full indemnification for any actual covered losses sustained within the

meaning of said CGL policies at the conclusion of the underlying lawsuits, up to each of their

limits of liability.

SECOND CLAIM FOR RELIEF

(Common Law Insurance Bad Faith)

19. All of the prior allegations are incorporated by reference herein as if fully set

forth.

20. Based on the aforesaid described events, and by ACE USA’s and/or INA’s

persistently and repeatedly refusing to provide full coverage to The Marianists as required by the

said CGL policies and Colorado law, wrongfully denying their contractual obligations under the

policies, including, inter alia, failing to timely reimburse The Marianists for defense costs for

more than a two year period after having agreed to defend, continuing to delay and deny

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payment of a portion of reasonable defense costs, refusing to meaningfully participate in

settlement negotiations by not fully honoring their indemnification obligation, requiring

burdensome and unwarranted participation from The Marianists, both financial and otherwise,

permitting reasonable settlement opportunities to expire, and generally placing their own

interests ahead of their policyholder by not acting in its best interests, ACE USA and/or INA are

each in bad faith breach of its CGL policy insurance contracts and their duty of good faith and

fair dealing.

21. As a result of the combined actions and/or inactions of ACE USA and/or INA,

The Marianists have been damaged and continue to suffer damages, flowing as a direct and

proximate result from the combined tortious conduct of said insurance companies, as well as

their unreasonable failure or refusal to honor their obligations under said CGL policies and

Colorado law.

22. The Marianists seek damages for ACE USA’s and/or INA’s bad faith in the

handling of it claims and the failure to authorize payments of covered benefits under its policy of

insurance with The Marianists, and an order finding damages therefor, and requiring ACE USA

and/or INA to provide appropriate payments for each of the coverages existing under the

aforesaid CGL policies, including timely reimbursement for all fees and costs expended in the

defense of the Underlying Complaints, and ultimately for full indemnification for any actual

losses sustained, within the meaning of said CGL policies at the conclusion of the underlying

lawsuits up to their limits of liability.

THIRD CLAIM FOR RELIEF

(Statutory Insurance Bad Faith)

23. All of the prior allegations are incorporated by reference herein as if fully set

forth.
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24. On August 6, 2008, HB-1407 became law, codified in pertinent part as C.R.S.

§10-3-1115 and §10-3-1116, which provide a civil remedy to be imposed against insurance

companies who unreasonably delay or deny insurance claims under insurance policies of the type

issued by ACE USA and/or INA to The Marianists, including, inter alia, the payment of double

the covered benefit damages, attorneys fees and costs.

25. ACE USA and/or INA have unreasonably delayed or denied authorizing

payments of covered benefits under its CGL policies of insurance issued to The Marianists, in

violation of C.R.S. §10-3-1115 and §10-3-1116.

26. The Marianists seek damages for ACE USA’s and/or INA’s bad faith in the

handling of it claims and the failure to authorize payments of covered benefits under its policy of

insurance with The Marianists, and an order finding damages therefor, and requiring ACE USA

and/or INA to provide appropriate payments for each of the coverages existing under the

aforesaid CGL policies, including timely reimbursement for all fees and costs expended in the

defense of the Underlying Complaints, and ultimately for full indemnification for any actual

losses sustained within the meaning of said CGL policies at the conclusion of the underlying

lawsuits up to their limits of liability, including payment of double the covered benefit damages

and reasonable attorneys fees and costs incurred in the bringing of this action as authorized by

Colorado law.

FOURTH CLAIM FOR RELIEF

(Violation of the Colorado Unfair Claims-Deceptive
Practices Act, § 10-3-1101 et seq., C.R.S. and the
Colorado Consumer Protection Act, § 6-1-101 et seq., C.R.S.)

27. All of the prior allegations are incorporated by reference herein as if fully set

forth.

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28. Upon information and belief, ACE USA and/or INA are attempting to avoid their

legitimate coverage obligations to The Marianists and other members of the public similarly

situated by relying in part upon an adopted company policy based on unreasonable delay, denial,

and brinksmanship tactics to force their policyholders to shoulder burdensome and unwarranted

participation in litigation processes, and further, by employing a strategy designed to permit

reasonable settlement opportunities to expire, ACE USA and/or INA are placing their own

interests ahead of their policyholders’, to whom they owe a fiduciary duty of good faith and fair

dealing, and are unfairly attempting to place the burden of litigating coverage on members of the

public who are consumers of their services, forcing them, inter alia, to engage counsel and

expend resources and time, thereby further delaying payments of policy benefits to which their

policyholders are otherwise legitimately entitled, all of which constitute a "special injury" to the

public as well as to The Marianists.

29. As an alternative to the relief requested in the Third Claim for Relief herein, or in

proper sequential application as the Court deems appropriate, ACE USA’s and/or INA’s bad

faith conduct as alleged herein constitutes a violation of the Colorado Unfair Claims-Deceptive

Practices Act, C.R.S. §10-3-1101 et seq. (“UCDPA”) and further constitutes a violation of the

Colorado Consumer Protection Act, C.R.S. §6-1-101 et seq. (“CCPA”), as The Marianists are a

policyholder/insured and consumer within the meaning of said acts.

30. As an alternative to the relief requested in the Third Claim for Relief herein, or in

proper sequential application as the Court deems appropriate, violation of the UCDPA and the

CCPA entitles The Marianists to further relief as provided by said acts, including but not limited

to treble damages and reasonable attorneys’ fees and costs.

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PRAYER FOR RELIEF

WHEREFORE, Plaintiff The Marianist Province of the United States, Inc., Society of

Mary, Province of St. Louis and at other times Roncalli High School, prays that judgment enter

in its favor and against Defendants ACE USA and affiliated insurer Insurance Company of North

America/INA in an amount to be determined at trial, to include but not be limited to

indemnification for Plaintiff’s losses in the underlying action, reasonable attorneys' fees and

costs incurred but not yet paid in the underlying action, as well as for reasonable attorneys fees

and costs in maintaining claims set forth in the within action, and/or for double the covered

benefit damages as pled in the Third Claim for Relief, or alternatively and/or in proper sequential

application as the Court deems appropriate, treble damages and attorneys’ fees as provided by

the UCDPA and CCPA, and additionally for an order requiring indemnification by Defendants

pursuant to said CGL policies, as well as statutory interest, both pre-judgment and post-judgment

costs, including consulting and expert witness fees, consequential damages, and other relief as

the Court deems proper.

JURY DEMAND

Plaintiff hereby requests a Trial by Jury on all issues so triable.

DATED this 18th day of August, 2008.

GRIMSHAW & HARRING, P.C.

s/ William J. Brady
William J. Brady, Esq.
1700 Lincoln St., Suite 3800
Denver, CO 80219
Tele: 303-839-3800 | Fax: 303-839-3838
E-mail: wmjbrady@grimshawharring.com

ATTORNEY FOR PLAINTIFF

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Plaintiff’s Address
Provincial of The Marianists of the United States
4425 W. Pine Blvd.
St. Louis, MO 63108 2301

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