Dellwood Insurance Files to Dismiss ‘Insufficient’ Case Brought by AIG

Dellwood Insurance Group has filed to dismiss a lawsuit against it by American International Group, who is using the court system “as a cudgel to crush a fledgling startup,” the new surplus insurer said.

According to the motion filed last week in U.S. District Court in New Jersey, Dellwood contends AIG cannot bring the same claims against Dellwood as it did against three former AIG executives who founded the company after those claims were dismissed by AIG late last month.

“AIG’s dismissal with prejudice has consequences: AIG’s remaining claims against Dellwood are, in addition to being legally insufficient and/or non-cognizable, now barred by res judicata,” Dellwood said.

AIG and a group of its excess and surplus lines subsidiaries filed suit against Dellwood Insurance Group (DIG) and Michael Price, Kean Driscoll, and Thomas Connolly about a month after the nationwide E&S lines insurance holding company was launched. AIG seeks injunctive relief and damages on allegations of breaches of contract, breaches of fiduciary duty, unfair competition, violations of trade-secret laws, and other claims.

With the claims dropped against Price, Driscoll, and Connolly, Dellwood said AIG’s claims against its newest competitor are void “because AIG’s causes of action against Dellwood arise out of the same alleged conduct underlying the dismissed claims against the individuals.” Even before the voluntary dismissal of claims against its former employees, AIG’s claims were “legally insufficient and/or fatally duplicative,” said Dellwood’s lawyers in the motion.

The only support for much of AIG’s allegations, Dellwood said, is an “assertion that no insurance company in this market could launch successfully without misappropriating AIG’s trade secrets, which is implausible on its face and, if accepted as true, would result in a pervasive restraint of trade.”

DIG will be dedicated to P/C wholesale brokers with an emphasis on small- and middle-enterprise risks. Its Dellwood Specialty Insurance Company received a financial strength rating of A- (Excellent) from AM Best earlier this week.

Price was AIG’s CEO of North America General Insurance before ending his tenure with the company about a year ago. He is now CEO of DIG. Driscoll was AIG’s global chief underwriting officer of General Insurance. He is now chief underwriting officer. Connolly, formerly chief financial officer of AIG’s North America General Insurance, is now Dellwood’s chief financial officer. AIG’s claims against the trio were dropped, according to Dellwood, only after the former employees demanded defense costs, which Dellwood asserts “would defeat AIG’s effort to use the burden and cost of litigation to their strategic advantage.”

Topics AIG