In a recent case with a complex overlay of Bankruptcy procedures, a U.S. District Judge denied American International Group's and National Union Fire Insurance Company's Motion to Transfer and/or Reassign a Bad Faith Case to the Federal Judge who presided over a Jury Trial in a previous Case resulting in a $4 Million Verdict against the Policyholder: Tucker v. American Int'l Grp., Inc., Download Tucker v. AIG (D. Conn. Case No. 3.09CV1499, Memorandum and Order Filed August 4, 2010) PUBLIC ACCESS also published as 2010 WL 3058687 (D. Conn. August 4, 2010)(Westlaw subscription required to access Westlaw).
In the first case, the Plaintiff, Ms. Teri Tucker, brought a Claim in Federal Court "for unlawful termination" in violation of Federal and Connecticut State Law. "More specifically, Tucker contended that she was terminated for opposing sexually harassing behavior by a subordinate employee and for refusing to testify falsely in her employer's defense to a sexual harassment complaint regarding the subordinate's behavior." Tucker, 2010 WL 3058687 at *1. Ms. Tucker received a Jury Verdict for $4 Million: "$1 million in compensatory damages and $3 million in punitive damages." Id. The Federal Judge entered Judgment on the Jury Verdict in the first case.
The Employer-Policyholder, Journal Register East, thereafter filed for Bankruptcy under Chapter 11. An automatic stay was immediately effective. Tucker sought relief from the Bankruptcy Court as against the Employer-Policyholder's Insurance Coverage under an Employment Practices Liability Insurance Policy issued to Journal Register East's parent company by the Defendants. Id. at *2 & n.8. She "made a motion in bankruptcy court for relief from the automatic stay for the purpose of pursuing recovery of the $4 million judgment ... from Journal Register East's insurer ... up to the limits of Journal Register East's employment practices liability insurance policy ('EPL Policy')." Id. Journal Register East stipulated to the relief requested and the Bankruptcy Judge approved the Stipulation.
Tucker then filed her present Federal Case No. 2, in which she alleged Claims for Breach of the Implied Covenant of Good Faith and Fair Dealing, and for Unfair Trade Practices, and for the Tort of Bad Faith Claims Handling, among other Claims. Id. at *3. The Defendants, National Union and its parent AIG, countered with a Motion to Transfer Case No. 2 or Reassign it to the Federal Judge who presided over the earlier sexual harassment Case which Tucker filed against Journal Register East.
The Motion was Denied in the subject Memorandum and Order. In that Bad Faith and Unfair Trade Practices Acts Case, "the central issue is whether defendants' EPL Policy with the Journal Register Company covers the damages resulting from plaintiff's allegedly wrongful termination," which was never an issue in the first case. Id. at *6. Since Case No. 2 did not involve "identical" issues but instead an Insurance Coverage Issue which was critical to all the Plaintiff's Bad Faith and Unfair Practices Claims, as well as all her other Claims, the Motion to Transfer and/or Reassign was accordingly denied in this Case.
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