Calif. Superior Court Judge Tosses Out Lawsuit Involving ACE Companies

The ACE Group of Companies announced Tuesday that California Superior Court Judge James Warren has entered judgment in favor of several ACE companies in a lawsuit brought against Insurance Company of North America (INA), INA Financial Corporation, ACE Property and Casualty Insurance Company and Century Indemnity Company by AICCO Inc. and Granite State Insurance Company, members of the AIG group, and Northwest Pacific Indemnity Company, a member of the Chubb group.

The lawsuit challenged the effectiveness of the division of INA under Pennsylvania corporate statutes into two separate companies — an active insurance company and an inactive run-off company — and claimed that under California law, California policyholders should retain the ability to require INA to process their claims.

Judge Warren noted that Proposition 64, passed by California voters on Nov. 2, 2004, stipulates that such lawsuits can only be brought by plaintiffs who have suffered harm as a result of allegedly unfair business practices. The plaintiffs in this case did not claim that they or any policyholders had suffered any injury.

Judge Warren further found that Proposition 64 properly applies to cases pending on the date of its enactment as well as to future cases.

On the basis of Proposition 64, Judge Warren granted judgment in favor of the ACE companies.