Guaranteed Rate, Inc. v. Ace Am. Ins. Co.

Guaranteed Rate, Inc. v. Ace Am. Ins. Co.

Opinion

JOHNSTON, J.

FACTUAL AND PROCEDURAL CONTEXT

In this insurance coverage case, Plaintiff Guaranteed Rate, Inc. ("GRI") seeks coverage for approximately $18 million in connection with a federal government investigation ("Government Investigation"). The U.S. Attorney's Office for the Northern District of New York and the U.S. Department of Justice initiated an investigation of alleged violations of the False Claims Act.¹ GRI received a Civil Investigative Demand ("CID") on June 27, 2019.

GRI was in the business of underwriting and issuing federally-insured mortgage loans. GRI purchased a Private Company Management Liability Policy from Defendant ACE American Insurance [*2]  Company ("ACE"). On July 8, 2019, GRI gave notice of the CID to ACE. By letter dated January 13, 2020, ACE denied that the CID constituted a "Claim" under the Policy, and declined to advance defense costs.

GRI has filed a Motion for Partial Judgment on the Pleadings on three issues:

(1) whether the CID was a Claim first made during the Policy period;

(2) whether exclusions in the Policy, including the Professional Services Exclusion negate ACE's obligations to advance GRI's defense costs; and

(3) whether, by refusing to acknowledge the CID as a Claim and refusing to advance GRI's defense costs, ACE breached the Policy.

Defendant ACE² filed a Cross Motion for Judgment on the Pleadings. ACE contends:

(1) that the Professional Services Exclusion bars coverage under the D&O part;

(2) that GRI has not pleaded a claim for loss under the EPL part; and

(3) that GRI's bad faith claim also should be dismissed.

STANDARD OF REVIEW

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