COURT DENIES MOTION TO DISMISS FINDING ALTERNATIVE AVENUE FOR RECOVERY
In an action arising out of an alleged failure to honor a reinsurance agreement, defendant reinsurer Carnforth Limited filed a third-party complaint against Mosaic Global Holdings asserting two breach of contract claims and a declaratory judgment claim. According to the third party complaint, Mosaic breached an Intercorporate Agreement and a 2007 Settlement Agreement by “refusing to honor its defense and indemnity obligations to Carnforth for the TIG Reinsurance Claims.” Mosaic subsequently moved to dismiss the third party complaint and to strike Carnforth’s claims for attorneys’ fees. The district court denied the motion to dismiss, citing that under the facts pled by Carnforth, Mosaic may be obligated to indemnify Carnforth for the costs it incurs in the defense of plaintiff TIG’s complaint. Thus, even if Mosaic was not found liable with respect to TIG’s complaint, Carnforth’s third-party complaint still provides an avenue of recovery against Mosaic. Finally, the court denied Mosaic’s motion to strike attorneys’ fees noting that the language of the parties’ Intercorporate Agreement requires Mosaic to indemnify Carnforth “for all sums expended in the defense, settlement and satisfaction of the TIG reinsurance.” Carnforth Ltd. v. Mosaic Global Holdings, Inc., Case No. 08-3618 (USDC N.D. Ill. April 22, 2009).
This post written by John Black.
