# Cushman & Wakefield, Inc. v. Illinois National Insurance Company

> District Court, N.D. Illinois · October 23, 2018

URL: https://www.frixlaw.com/law-library/cases/10139595

## Case

- **Court:** District Court, N.D. Illinois
- **Decided:** October 23, 2018
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

CUSHMAN & WAKEFIELD, INC., )
)
Plaintiff, )
)
v. )
) Case No. 1:14-cv-08725
ILLINOIS NATIONAL INSURANCE )
COMPANY, ACE AMERICAN )
INSURANCE COMPANY, LIBERTY )
MUTUAL INSURANCE COMPANY, and )
RLI INSURANCE COMPANY, )
)
Defendants. )

DEFENDANT ILLINOIS NATIONAL INSURANCE COMPANY’S MOTION FOR
ENTRY OF FINAL JUDGMENT AND AWARD OF PREJUDGMENT INTEREST AND
BRIEF IN SUPPORT

On the Brief:

Robert Novack*
rnovack@bressler.com
J. Emma Mintz*
jmintz@bressler.com
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, NY 10004
T: (212) 425-9300
F: (212) 425-9337
*Admitted Pro Hac Vice
Attorneys for Illinois National
Insurance Company
I. FINAL JUDGMENT SHOULD BE ENTERED
Illinois National Insurance Company (“Illinois National”) hereby moves for Entry of
Final Judgment and an award of prejudgment interest pursuant to this Court’s April 20, 2018
Opinion & Order granting partial summary judgment in favor of Illinois National. In its April
20, 2018 Opinion and Order, the Court held that “Illinois National is entitled to reimbursement
of amounts paid in excess of Illinois National’s limit of $23 million for the 2009 – 2010 policy
year; and ACE, Liberty and RLI must pay, to the extent the ACE, Liberty, and RLI 2009–2010

Policies are triggered, all amounts incurred in connection with each Underlying Claim that are in
excess of the 2009–2010 Illinois National Policy (as to ACE) and the 2009–2010 ACE Policy (as
to Liberty and RLI), up to their respective Policies’ limits.” April 20, 2018 Opinion & Order,
Dkt. No. 354, at 42.
The parties agree that Illinois National has paid $32,374,402.47 in indemnity and defense
costs to or on behalf of Cushman with respect to certain claims. See McKool Smith email dated
August 21, 2018 attached as Ex. A to the October 23, 2018 Declaration of Robert Novack
(“Novack Decl.”). These claims include the four Underlying Actions, (i) Gibson, et al. v. Credit
Suisse AG, et. al., Case No. 1:10-cv-00001-EJL (the “Gibson Lawsuit”); (ii) the Highland
Capital matter; (iii) Blixseth v. Cushman & Wakefield of Colorado, Inc., et al., Case No. 1:12-cv-

00393-PAB (the “Blixseth Lawsuit”); and (iv) Rhodes, et al. v. Credit Suisse AG, et al., Case No.
2:12-cv-01272-MMD (the “Rhodes Lawsuit”) (collectively the “Underlying Actions”), as well as
several unrelated claims that were paid by Illinois National under its 2009-10 Policy. These
payments are delineated in the schedule attached to the Declaration of Brian Sweeney and the
parties agree such payments erode the 2009-2010 Illinois National Policy. See Declaration of
Brian Sweeney (“Sweeney Decl.”).
Therefore, under this Court’s April 20, 2018 Opinion and Order, Illinois National is
entitled to reimbursement of $9,374,402.47. ACE has paid $8,070,119.63 to date. See
Declaration of Susan K. Slim, attached as Ex. B to the Novack Decl. Accordingly, ACE should
be ordered to reimburse Illinois National the sum of $1,929,880.37 thereby exhausting its $10
million policy limit. RLI and Liberty should each be ordered to reimburse Illinois National the

sum of $3,722,261.05 for a total of $7,444,522.10.
II. ILLINOIS NATIONAL IS ENTITLED TO RECOVER PREJUDGMENT
INTEREST FROM CUSHMAN
In its April 20, 2018 Opinion & Order, the court found that New York law applied to this
case. See April 20, 2018 Opinion & Order at 19-21. Under New York CPLR § 5001(a),
prejudgment interest “shall be recovered upon a sum awarded because of a breach of
performance of a contract, or because of an act or omission depriving or otherwise interfering
with title to, or possession or enjoyment of, property.” CPLR § 5001(a). The statutory rate of
interest is 9% per year. See CPLR § 5004. The principle behind prejudgment interest is that the
breaching party should compensate the wronged party for the loss of use of the money. NML
Capital v Republic of Argentina, 17 NY3d 250, 266 (2011). Interest is not a penalty. Rather, it is
simply the cost of having the use of another person's money for a specified period. Love v State
of New York, 78 NY2d 540 (1991).
CPLR § 5001(a) has been interpreted by the courts to include breaches of third-party
insurance policies. “[T]he awarding of interest on breach of contract claims, including breach of
third-party insurance policies, is non-discretionary. See N.Y. C.P.L.R. § 5001 (McKinney 2007);

Langenberg v. Sofair, No. 03 Civ. 8339(KMK) (FM), 2006 U.S. Dist. LEXIS 88157 (S.D.N.Y.
Dec. 7, 2006).” Turner Constr. Co. v. Am. Mfrs. Mut. Ins. Co., 485 F. Supp. 2d 480, 490.
In Seward Park Hous. Corp. v. Greater NY Mut. Ins. Co., 63 AD3d 525 (1st Dept 2009),
the defendant-insurer moved for restitution, and plaintiff-insured was ordered to return $1.6
million of the $18.4 million defendant-insurer had paid to plaintiff in satisfaction of a judgment
that was partially vacated. The Appellate Division modified the order of the Supreme Court and
directed Plaintiffs to pay prejudgment interest on the $1.6 million. See also C.S. Behler, Inc. v

Daly & Zilch, Inc., 277 AD2d 1002 (4th Dept 2000) (although in a completely different context,
the plaintiffs sought, by way of a recoupment action, $28K on a bond that discharged its
mechanics’ lien and they were awarded prejudgment interest on that amount.).
In the insurance context, prejudgment interest accrues from the date the insurer actually
makes payment. See St. Paul Fire & Marine Ins. Co. v. Fox Insulation Co., Docket No. 96-CV-
0502E(F), 1999 U.S. Dist. LEXIS 15471 (W.D.N.Y. Sep. 29, 1999). “An award of statutory
prejudgment interest is available as a matter of right on a judgment in a subrogation action
brought by an insurance company to recover for negligent injury to its insured's property.
Prejudgment interest accrues from the date the insurance company makes payment.” Id. at *3.

See also Am. Home Assurance Co. v. Morris Indus. Builders, Inc., 192 AD2d 477 (App. Div.
1993) (Where plaintiff issued checks to its insured for $1,745,000, but because the jury awarded
plaintiff only $1,200,000, the court determined that interest should run from the various dates of
the checks but only for the respective amounts totaling the jury's award. Id. at 478-79. See also
United States v. Qurashi, No. CR 05-498 (SJF) (AKT), 2009 U.S. Dist. LEXIS 132679
(E.D.N.Y. Aug. 26, 2009) “Here, the Government and the carriers agree, and the Court concurs,
that prejudgment interest should be calculated for the period beginning on the dates on which
MetLife and New York Life paid defendant on the Adnan Policies. See Kirton v Northwestern
Mut. Life Ins. Co., 2006 US Dist LEXIS 78915 (EDNY Oct. 24, 2006) (awarding prejudgment
interest on insurance proceeds, which had been paid by insurance companies pursuant to
defendant's fraudulent scheme, from date of payment of the proceeds).” Id. at 131. See also St.
Paul Fire & Marine Ins. v. Schneider Nat'l Carriers, Inc., 2006 U.S. Dist. LEXIS 28284, at *6-7
(S.D.N.Y. May 10, 2006) (Plaintiff insurer received prejudgment interest for the period between
their payments to AIT and the Court's Order.).

Illinois National has calculated interest from the time that it made each payment upon
exceeding its $23 million limit. See Declaration of Jo-Ann Spinelli. Based on the these
calculations, Illinois National is entitled to $2,838,842.89 in interest under New York’s 9 percent
rule calculated through October 23, 2018. Id. Illinois National is also entitled to 9 percent
prejudgment interest from October 23, 2018 through the date of entry of final judgment.
III. CUSHMAN’S REMAINING COUNTS THAT RELATE TO “OTHER
CLAIMS” SHOULD BE DISMISSED
The only remaining claims in this action include Count II, Count VII, Count X and
Count XI – but only to the extent they relate to the so-called “Other Claims.” April 20, 2018
Opinion & Order, Dkt. No. 354, at 43. The Other Claims do not involve the TNV Appraisals
and are not impacted by the Court’s April 20, 2018 Opinion and Order. The Other Claims
should be dismissed because they have been settled or dismissed and do not present any
coverage issues, or as to one claim, the coverage issues are not ripe.

The Other Claims that have been settled or dismissed include : Fiddler’s Creek, Sofka,
the Angino & Rovner, Barrons Family Trust, Behringer Harvard, Citadel, Kornievsky,
McCready, Orient Overseas, Studio Mix, Sunflower Square, and Universal Green Solutions. See
Declaration of Robert Novack (“Novack Delc.”), ¶11. Only one claim, Berish Berger et al. v.
Cushman & Wakefield of Pennsylvania et al., S.D.N.Y. No. 12-cv-09224-JPO-HBP (the “Berger
Claim”) remains pending. Id. at ¶12. Illinois National has been defending the Berger Claim and
has paid millions in defense costs. Id. at ¶13. The matter is currently scheduled for a settlement
conference in Pennsylvania Federal Court on November 13, 2018.
Cushman acknowledges that there is no case or controversy here with regard to any of
the Other Claims. The Other Claims were not litigated in this action since. Id. at ¶14. The
parties agreed in August 2015 that all discovery be stayed with respect to the Other Claims. Id.

No discovery whatsoever has taken place with respect to the Other Claims. Id. Because all but
one of the Other Claims is resolved and the Berger Claim coverage issues have not been litigated
in this action, Cushman represented at the June 19, 2018 Status Conference that the parties had
an agreement in principle to enter into a stipulation of dismissal without prejudice because the
Other Claims were not litigated here nor ripe for adjudication. Id. at ¶8. Cushman’s counsel, Ms.
Romagnoli, stated:
MS. ROMAGNOLI: No, I think -- I think the rest of the case can be
settled. There are two issues that the parties are working through right
now. There -- in our complaint, in Cushman's complaint, there was
reference to some coverage issues that we -- with respect to, quote, other
claims that didn't have to do with appraisals. The majority of those other
claims are no longer an issue. We have one active other claim that Illinois
National has denied coverage for. But it happened after discovery and
after the summary judgment briefing. So it is really not ripe right now for
any sort of judicial determination. And I certainly don't want to
misrepresent the status of the parties's negotiations. And Mr. Novak can
correct me if I am wrong, but we -- we have, I think, an agreement in
principle that we are going to enter into a stipulation of dismissal without
prejudice, so it will remove that issue entirely from the case before your
Honor, and we will just deal with that separately.

Transcript of the June, 19, 2018 Court Conference at 5:3-20, attached as Ex C to the
Novack Decl.
Accordingly, the Berger Claim coverage action is not ripe and should be dismissed
without prejudice along with the Other Claims that have been settled or dismissed. Federal
courts have authority under the Constitution to answer such questions only if necessary to do so
in the course of deciding an actual “case” or “controversy.” Hollingsworth v. Perry, 570 U.S.
693, 700 (2013). An “actual controversy,” is defined as a “real and substantial controversy
admitting of specific relief through a decree of a conclusive character, as distinguished from an
opinion advising what the law would be upon a hypothetical state of facts.” Aetna Life Ins. Co. of
Hartford Conn. v. Haworth, 300 U.S. 227, 241 (1937). There is no current case of controversy

with respect to the Other Claims and therefore they should be dismissed without prejudice.
CONCLUSION
We respectfully submit that the Court should enter a Final Judgment in favor of
Defendant Illinois National on its Counterclaim as follows:
1) Illinois National is entitled to reimbursement of $9,374,402.47 representing payments

made in excess of Illinois National’s limit of $23 million for the 2009–2010 policy
year. ACE should be ordered to reimburse Illinois National the sum of $1,929,880.37
thereby exhausting its $10 million policy limit. RLI and Liberty should each be
ordered to reimburse Illinois National the sum of $3,722,261.05 for a total of
$7,444,522.10.
2) Cushman should pay Illinois National prejudgment interest at the rate of 9 percent per
year on $9,374,402.47 pursuant to New York CPLR § 5001(a) in the amount of
$2,838,842.89 representing interest calculated through October 23, 2018. Cushman
should also pay an additional 9 percent interest for the period October 23, 2018

through the entry of Final Judgment.
3) The Court should dismiss Count II, Count VII, Count X and Count XI with respect to
the “Other Claims” without prejudice.

Dated: October 23, 2018 Respectfully submitted,
By: /s/David T. Brown
David T. Brown
KAUFMAN DOLOWICH
& VOLUCK, LLP
135 S. LaSalle Street, Suite 2100
Chicago, IL 60603
T: (312) 646-6744
F: (312) 896-9403
Email: dbrown@kdvlaw.com
and
Robert Novack*
J. Emma Mintz*
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, NY 10004
T: (212) 425-9300
*Admitted Pro Hac Vice

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10139595. Public record. Not legal advice.