Wesco Insurance Company v. Wood et al

Filing 130

MEMORANDUM Opinion and Order Signed by the Honorable Ronald A. Guzman on 9/27/2017: The motion of American Zurich Insurance Company for summary judgment 92 is granted. The motion of Wesco Insurance Company for summary judgment 100 is granted in part and denied in part. The motion of Bari Wood and the Law Offices of Bari Wood, P.C. for summary judgment 104 is denied. The motion of American Zurich Insurance Company to strike the expert report of Charles D. Henderson and bar his testimony [ 71] is denied as moot. Summary judgment is entered: (1) in favor of American Zurich Insurance Company and against Bari Wood on Zurichs crossclaim and on Counts I and II of Woods counterclaim; (2) in favor of Zurich and against Wesco Insurance Company on Count IV of Wesco's amended complaint; (3) in favor of Wesco and against Wood, P.C. and John E. Gierum, as Trustee for thebankruptcy estate of Jonathan F. Glick, on Count I of Wesco's amended complaint; and (4) in favor of Wesco and aga inst Wood and John E. Gierum, as Trustee for the bankruptcy estate of Jonathan F. Glick, on Counts II and III of Wesco's amended complaint. Counts III and IV of Wood's counterclaim and Count V of Wesco's amended complaint are dismissed as moot. Civil case terminated. [For further details see Memorandum Opinion and Order.] Mailed notice(is, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WESCO INSURANCE COMPANY,

)
)
Plaintiff,
)
)
v.
)
)
BARI WOOD; LAW OFFICES OF BARI
)
WOOD, P.C.; JOHN E. GIERUM, solely in his
)
capacity as Trustee for the bankruptcy estate
)
of Jonathan F. Glick; and AMERICAN ZURICH )
INSURANCE COMPANY,
)
)
Defendants.
)
__________________________________________

No. 15 C 7190
Judge Ronald A. Guzmán

AMERICAN ZURICH INSURANCE COMPANY, )
)
Cross-Plaintiff,
)
)
v.
)
)
BARI WOOD; LAW OFFICES OF BARI
)
WOOD, P.C.; and JOHN E. GIERUM, solely in
)
his capacity as Trustee for the bankruptcy estate
)
of Jonathan F. Glick,
)
)
Cross-Defendants.
)
__________________________________________
BARI WOOD,

)
)
Counterplaintiff,
)
)
v.
)
)
WESCO INSURANCE COMPANY and
)
AMERICAN ZURICH INSURANCE COMPANY, )
)
Counterdefendants.
)

MEMORANDUM OPINION AND ORDER

This is an insurance-coverage dispute in which the parties seek declaratory relief
regarding the obligations of Wesco Insurance Company (“Wesco”) and American Zurich
Insurance Company (“Zurich”) under lawyers professional liability policies issued to the Law
Offices of Bari Wood and/or the Law Offices of Bari Wood, P.C. (“Wood, P.C.”). The primary
issues are whether a potential claim was sufficiently reported to Zurich during the policy period
and the applicability of certain exclusions in the policies. Wesco, Zurich, and Wood all move
for summary judgment under Federal Rule of Civil Procedure 56. Zurich also moves to strike
the report and bar the testimony of Wesco’s expert witness, Charles D. Henderson. For the
reasons explained below, Zurich’s motion for summary judgment is granted; Zurich’s motion to
strike Henderson’s report and bar his testimony is denied as moot; Wesco’s motion for summary
judgment is granted in part and denied in part; and Wood’s motion for summary judgment is
denied.
MATERIAL FACTS AND PROCEDURAL BACKGROUND
The facts are generally undisputed. Zurich issued a Lawyers Professional Liability
Insurance Policy (the “Zurich Policy”) to the Law Offices of Bari Wood on a “claims made and
reported” basis, for the policy period of May 6, 2013 to May 6, 2014 (the “Zurich Policy
Period”). Subject to limitations and exclusions, the policy contains a duty to defend claims
based on an act or omission in Wood’s rendering or failing to render legal services for others.
(Dkt. No. 93-1, Zurich Policy at 1.) Specific provisions of the Zurich Policy are set out below in
the Court’s discussion of the parties’ summary judgment motions.
On May 18, 2013, Jonathan F. Glick, who is not a party to this case, filed a Chapter 7
bankruptcy petition, which was assigned Case Number 13 B 20989 (the “Glick Bankruptcy”).
On March 5, 2014, during the Zurich Policy Period, four of Glick’s creditors (the “Moving
2

Creditors”) filed a “Joint Motion for Authority to Issue Rule 2004 Subpoenas on Individuals
and/or Entities Owned, Controlled, Affiliated or Related to the Debtor, Jonathan Glick” (the
“Motion for Leave”). Those individuals included Bari Wood. In the motion, the Moving
Creditors noted that Glick had stated in his bankruptcy schedules that he had been an officer of
thirty-seven business entities within the preceding six years, and that Glick had testified at the
meeting of creditors that many of those entities were insolvent. (Dkt. No. 93-3, Mot. for Leave
at 2.) The Moving Creditors further stated that they had learned that certain corporations Glick
operated and held in a Glick-controlled trust were in fact not insolvent, so they sought leave to
serve subpoenas in order to obtain information about contributions made to Glick-controlled
trusts, the timing of those contributions, and payments made by and among various of Glick’s
business entities. (Id. at 3-8.) That information, they said, would enable them to determine
Glick’s “true financial condition.” (Id. at 8.) The Moving Creditors sought documents from
Bari Wood as well as her deposition. (Id. at 9.) They stated that she was “the in-house general
counsel for most of the Glick companies” and sought information from her “with respect to
testimony related to Play Makers Group, LLC and the invoicing and correspondence handled by
Bari Wood,” in order “to understand the various payments made by [Glick] on behalf of Play
Makers Group, LLC among other things.” (Id. at 4, 6.)
On March 7, 2014, Wood reported the Motion for Leave to her insurance broker, M.G.
Welbel and Associates, Inc. (“Welbel”), which on the same date faxed and emailed to Zurich a
copy of the Motion for Leave; requested “pre claims assistance” on Wood’s behalf; and
requested that Zurich contact Wood by phone or at her email address, “[e-mail].”
(Dkt. Nos. 27-1; 93-3.) In a letter dated March 10, 2014 from Zurich Team Manager Laurence
Grob (the “Grob Letter”), Zurich acknowledged receipt of the information; identified the matter
3

with a claim number and the assigned claim handler, Louis Peraggine; stated that Peraggine
would contact Wood; and further stated that “[f]or effective notice,” her policy required that the
following information be sent to Zurich: “[t]he description of the alleged act or omission”; “[t]he
identities of the claimants or potential claimants”; “[t]he identities of the responsible insured(s)”;
and “[t]he date and circumstances by which the insured(s) first became aware of the alleged act
or omission.” (Dkt. No. 101-5.) The Grob Letter bears the email address “[e-mail],”
not Wood’s correct email address. Wood says that she did not receive the Grob Letter via email
or U.S. Mail; rather, she received it months later, in June 2014, when Welbel emailed her a copy.
(Dkt. No. 101-4, Dep. of Bari Wood at 69-71.)
On March 10, 2014, Peraggine telephoned Wood to discuss the Motion for Leave.
Peraggine recalled that he and Wood discussed, among other things, the motion and subpoena,
the background of the Glick entities and the bankruptcy, and what type of work Wood performed
for the Glick entities. (Dkt. No. 101-12, Dep of Louis A. Peraggine at 42-43.) Peraggine also
said that Wood answered all of his questions. (Id. at 52-53.) Wood says that Peraggine did not
tell her that she needed to take any further action by way of notice to Zurich. (Wood Dep. at 50.)
On March 25, 2014, Wood completed and signed a Zurich form titled “Notice of
Circumstance/Claim Reporting Form—Lawyers Professional Liability Insurance Policy”
(“Notice of Circumstance Form”), which instructed that it be completed for “each claim or
circumstance that could result in a claim.” (Dkt. No. 27-2.) Wood identified her law office as
the applicant; stated that March 7, 2014 was the date she “first had reason to believe that a claim
might be made or an incident (circumstance) report made”; and, in response to the question that
sought the names of the claimants or potential claimants, stated: “None at this time. Please see
Number 8.” (Id.) In response to Question 8, which asked for a “[d]escription of [the] alleged act
4

or omission,” Wood stated: “On 3/7/14 Bari Wood received a Motion for Leave to Issue 2004
[sic] Subpoenas in Case No. 13-20989, which is a bankruptcy matter. A copy of said motion
was delivered to Zurich on 3/7/14.” (Id.) She further stated that “business transaction/advice”
was the area of practice from which the circumstance that could result in a claim arose. (Id.)
On March 26, 2014, Wood signed a Zurich form titled “Lawyers Professional Liability
Insurance Application” (the “2014 Application”), which had been completed by Welbel, to seek
renewal of her insurance policy. Wood checked the “Yes” box in response to Question 37,
which asked: “Is any Attorney in Question 2 [Wood] . . . aware of any circumstance, incident,
act, error or omission that could result in a claim or suit against the applicant or any predecessor
or any of the former or current Attorneys or employees of the Applicant?” (Dkt. No. 27-3 at 4.)
Wood attached an additional sheet to the 2014 Application further explaining her answer to
Question 37 as follows: “Applicant has provided Zurich with a Motion for Authority to Issue
Rule 2004 Subpoena in relation to Case Number 13-20989.” (Id. at 5.) On March 27, 2014,
Welbel submitted the Notice of Circumstance Form and 2014 Application to Zurich.
In the Glick Bankruptcy, the court granted the Motion for Leave, and on April 8, 2014, a
subpoena for document production and deposition was issued to Wood. She forwarded a copy of
the subpoena to Zurich on June 17, 2014. In a July 23, 2014 letter to Wood (the “Reservation of
Rights Letter”), Peraggine acknowledged Zurich’s receipt of the subpoena; notified Wood that
Zurich had retained “pre-suit counsel for the limited purpose of assisting [Wood] with
responding to the subpoena” in the Glick Bankruptcy; reserved the right to deny coverage based
on a number of specifically-identified policy provisions and exclusions; and generally reserved
all rights and defenses available under the Zurich Policy. (Dkt. No. 23-6.) Subsequently,
attorney Thomas Pontikis assisted Wood with producing documents in response to the subpoena
5

and testifying at her deposition. Pontikis also regularly reported to Peraggine on the events of
the bankruptcy proceeding.
Zurich did not renew the Zurich Policy, which expired on May 6, 2014. Wood obtained
insurance from Wesco, which issued to the Law Offices of Bari Wood, in reliance on the
representations Wood made in the 2014 Application,1 a Lawyers Professional Liability Policy
(the “First Wesco Policy”) on a “claims made and reported” basis, for the policy period of May
6, 2014 to May 6, 2015 (the “First Wesco Policy Period”). Wesco later issued, to the Law
Offices of Bari D. Wood, P.C., a Lawyers Professional Liability Policy (the “Second Wesco
Policy”) on a “claims made and reported’ basis, for the policy period of May 6, 2015 to May 6,
2016 (the “Second Wesco Policy Period”). Subject to limitations and exclusions, the policies
contain a duty to defend Wood on claims for damages that arose out of an act or omission in
rendering or failing to render legal services. (Dkt. No. 101-1, First Wesco Policy at 1-2; Dkt.
No. 101-2, Second Wesco Policy at 1-2.) Specific provisions of the Wesco Policies are set out
below.
On May 15, 2015, John E. Gierum, the Trustee in the Glick Bankruptcy, filed an
Adversary Complaint, Number 15-00324, against Wood and others (the “Adversary
Proceeding”). On August 19, 2015, the Trustee filed an Amended Adversary Complaint against
Wood and others. The gist of the Trustee’s allegations is that Glick, with the assistance of his
family, business associates, and lawyers, created “fictitious” trusts and a complicated web of
sham companies, in an effort to fraudulently transfer assets and shield those assets from

1

Wesco explains in its amended complaint that although this application was completed on
a Zurich application form, it was submitted to (and evidently accepted by) Wesco. (Dkt. No. 19,
Am. Compl. ¶ 177.)
6

creditors. The Amended Adversary Complaint contains three claims against Bari Wood. The
Trustee alleges that Wood aided and abetted Glick’s fraudulent scheme with respect to Play
Makers Group, LLC and one of Glick’s trusts (Counts XV and XVI) and seeks turnover of
allegedly unauthorized post-petition payments she received from certain trust entities (Count
XVII). (Dkt. No. 93-9, Am. Adversary Compl.) The Trustee further alleges that Wood, “both as
legal counsel and Chief Operating Officer of Glick Group, played a vital role in the formation of
[Glick’s trusts], the transfer of [a] license and the ongoing scheme to defraud creditors.” (Id. ¶
589.)
On May 20, 2015, Welbel sent Zurich a copy of the Adversary Complaint, stating that the
matter “relates back to the pre-claim notice provided on March 7, 2014.” (Dkt. No. 27-4.)
Welbel gave Wesco notice of the Adversary Complaint on the same date. Zurich has declined to
provide Wood a defense and has not paid any defense costs incurred by Wood in the Adversary
Proceeding. Wesco agreed to provide to Wood with a defense in the Adversary Proceeding
subject to a reservation of rights.
On August 17, 2015, Wesco filed the instant action against Wood; Wood, P.C.; Zurich;
and Gierum, in his capacity as Trustee,2 in which Wesco seeks declaratory judgments that it
owes Wood, P.C. no duty to defend or indemnify (Count I); it owes Wood no such duties
(Counts II and III); Zurich owes Wood a duty to defend her in the Adversary Proceeding (Count
IV); and the Wesco Policies are excess insurance vis-à-vis the Zurich Policy (Count V).

2

Wesco does not seek any relief with respect to Gierum other than a declaration that Wesco
has no duty to pay the Trustee or anyone else any amount of any judgment entered against Wood
in, or for settlement of, the Adversary Proceeding. (Am. Compl., Prayer for Relief C.) Zurich states
that it names Gierum in the crossclaim solely “by virtue of his status as a necessary party claimant.”
(Dkt. No. 23, Crosscl. ¶ 5.)
7

On October 2, 2015, Zurich sent Wood a letter stating that Zurich was declining to
participate in her defense of the Adversary Proceeding; it understood that Wesco was paying for
her defense; and it intended to resolve coverage issues in the action Wesco filed. (Dkt. No. 277.) The letter cited specific policy provisions upon which Zurich based its denial. Six days later,
Zurich sent Wood a revised letter that cited an additional policy exclusion. (Dkt. No. 27-8.)
On December 22, 2015, Zurich filed a crossclaim against Wood and Gierum, in his
capacity as Trustee, in which Zurich seeks declaratory judgments that it owes Wood no duty to
defend or indemnify because no claim or potential claim was made and reported during the
Zurich Policy Period (Count I); Exclusion D of the Zurich Policy relieves Zurich of such duties
(Count II); and the policy’s Full Firm Prior Acts Endorsement relieves Zurich of such duties
(Count III). (Dkt. No. 23, Crosscl.)3 Zurich’s claims are not properly separate “counts” in the
traditional sense of being discrete claims. Rather, they are three potential bases for a declaration
that Zurich owed Wood no duty to defend or indemnify, so the Court has considered them to be
three parts of a single claim and will not enter separate judgments on each count.
On January 26, 2016, Bari Wood filed a counterclaim against Zurich and Wesco, in
which she seeks declaratory judgments that Zurich owes her duties to defend and indemnify her
in the Adversary Proceeding (Counts I and II), and, in the alternative, that Wesco owes her such
duties under the Second Wesco Policy (Counts III and IV). Wood also alleges that Zurich’s

3

Although Zurich includes Wood, P.C. as a cross-defendant in the caption of its crossclaim,
it does not identify it as a cross-defendant in the body of the crossclaim, nor does it seek any relief
specific to Wood, P.C. other than the declaratory judgments sought against Wood herself.
8

refusal to defend her is “vexatious and unreasonable,” and she seeks “statutory penalties.” (Dkt.
No. 27, Countercl. ¶¶ 82, 83(b).)4
Zurich moves for summary judgment on its crossclaim, on Counts IV and V of Wesco’s
amended complaint, and on Counts I and II of Wood’s counterclaim. Zurich also moves to
strike the report of Wesco’s expert witness and to bar his testimony. Wesco moves for summary
judgment on all counts of its amended complaint and on Counts III and IV of Wood’s
counterclaim. Wood and Wood, P.C. move for summary judgment on Counts I and II of Wood’s
counterclaim and on Zurich’s crossclaim.
The parties recently jointly supplemented the record to provide notice to the Court of the
bankruptcy court’s dismissal with prejudice of all claims against Wood in the Adversary
Proceeding. (Dkt. No. 127, Joint Mot. to Suppl.)
DISCUSSION
A.

Motions for Summary Judgment
1.

Legal Standards

It appears that the insurance policies at issue do not contain choice-of-law provisions.
The parties do not address the threshold issues of choice of law and applicable substantive law,
but they all rely on Illinois law. Therefore, the Court will apply the substantive law of Illinois.

4

A provision of the Illinois Insurance Code, 215 ILCS 5/155, permits a court to award an
additional amount plus attorneys’ fees and costs for an insurer’s “vexatious and unreasonable”
action or delay. “[S]ection 155 is procedural rather than substantive . . . ; it provides a remedy in
a specified type of ‘action’ (case); it does not create a cause of action; it presupposes rather than
authorizes a suit.” Hennessy Indus. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 770 F.3d 676,
679 (7th Cir. 2014). “Section 155 ‘simply provides an extracontractual remedy to an action on a
policy.’” Id. at 679-80 (quoting Cramer v. Ins. Exch. Agency, 675 N.E.2d 897, 902 (Ill. 1996)).

9

See Harter v. Iowa Grain Co., 220 F.3d 544, 559 n.13 (7th Cir. 2000) (a court will not perform
an independent choice-of-law analysis where the parties agree on the governing law and the
choice bears a “reasonable relation” to their dispute).
“Under Illinois law, ‘the construction of an insurance policy and a determination of the
rights and obligations thereunder are questions of law for the court which are appropriate
subjects for disposition by way of summary judgment.’”

Hurst-Rosche Eng’rs, Inc. v.

Commercial Union Ins. Co., 51 F.3d 1336, 1342 (7th Cir. 1995) (brackets omitted) (quoting
Crum & Forster Managers Corp. v. Resolution Tr. Corp., 620 N.E.2d 1073, 1077 (Ill. 1993)).
“The court shall grant summary judgment if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “A factual dispute is ‘genuine’ only if a reasonable jury could find for either party.”
Nichols v. Mich. City Plant Planning Dep’t, 755 F.3d 594, 599 (7th Cir. 2014) (citation and
internal quotation marks omitted).

On cross-motions for summary judgment, the Court

construes all inferences in favor of the party against whom the motion under consideration is
made. Westfield Ins. Co. v. Nat’l Decorating Serv., Inc., 863 F.3d 690, 695 (7th Cir. 2017).
Under Illinois law, an insurer has an obligation to defend its insured in an underlying
lawsuit if the complaint in the underlying lawsuit alleges facts potentially within the coverage of
the insurance policy, even if the allegations are groundless, false or fraudulent. BASF AG v.
Great Am. Assurance Co., 522 F.3d 813, 819 (7th Cir. 2008). “[A]n insurer may justifiably
refuse to defend only where it is apparent from such a comparison that the allegations fail to
state any claim within, or potentially within, the scope of policy coverage.” Int’l Minerals &
Chem. Corp. v. Liberty Mut. Ins. Co., 522 N.E.2d 758, 762 (Ill. App. Ct. 1988). “‘The insurer’s
duty to defend its insured arises from the undertaking to defend as stated in the contract of
10

insurance.’”

James River Ins. Co. v. Keyes2Safety, Inc., No. 11 C 901, 2012 WL 3023334, at

*2 (N.D. Ill. July 24, 2012) (quoting Zurich Ins. Co. v. Raymark Indus., 514 N.E.2d 150, 161 (Ill.
1987)). Thus, “[t]he extent of an insurer’s duty to defend is determined by the language in the
contract/policy.”

Lifschultz Fast Freight, Inc. v. Transcon. Freight Sys., Inc., No. 91 C 688,

1993 WL 787511, at *4 (N.D.Ill. Aug. 24, 1993). When the terms of the policy are clear, the
court must construe them according to their plain and ordinary meaning, but if any policy
language is ambiguous, it must be interpreted against the insurer. Valley Forge Ins. Co. v.
Swiderski Elecs., Inc., 860 N.E.2d 307, 314 (Ill. 2006). Generally, the insured bears the burden
of proving her claim falls within the policy’s grant of coverage, and the insurer bears the burden
of proving that a limitation or exclusion applies. Addison Ins. Co. v. Fay, 905 N.E.2d 747, 752
(Ill. 2009). If the insurer relies on an exclusionary provision, it must be “clear and free from
doubt that the policy’s exclusion prevents coverage.” Travelers Ins. Cos. v. Penda Corp., 974
F.2d 823, 833 (7th Cir. 1992). As long as the exclusions are not prohibited by statute or public
policy, an insurer can include any number of them to limit its liability and obligations to the
insured. Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 462 (7th Cir. 1997).
2.

Zurich

The Zurich Policy identifies Zurich as the “Company” and the Law Offices of Bari Wood
as the “Named Insured.” The Zurich Policy includes the “Named Insured” in its definition of the
“Insured,” along with certain affiliated lawyers and employees. (Zurich Policy at 8.) There is no
dispute that Bari Wood is an “Insured” under the Zurich Policy. The “Insuring Agreement”
section of the Zurich Policy provides as follows:

A.

COVERAGE
11

The Company5 will pay on behalf of an Insured, subject to the limit of
liability, all amounts in excess of the deductible shown in the Declarations
that an Insured becomes legally obligated to pay as Damages and Claim
Expenses because of a Claim6 that is both made and reported to the
Company during the Policy Period or any extended reporting period
based on an act or omission in the Insured’s rendering or failing to render
Legal Services for others. It is a condition precedent to coverage under
this policy that the act or omission occurred:
1.

during the Policy Period; or

2.

prior to the Policy Period, provided that all of the following four
conditions are met:
(a)

the Insured did not notify any prior insurer of such act or
omission or Related Act or Omission;7 and

(b)

prior to the inception date of the first policy issued by the
Company if continuously renewed, no Insured had any
basis (1) to believe that any Insured had breached a
professional duty; or (2) to foresee that any such act or
omission or Related Act or Omission might reasonably be
expected to be the basis of a Claim against any Insured;
and

(c)

prior to the date any Insured first became a member or
employee of the Named Insured, such Insured had no
basis (1) to believe that any Insured had breached a
professional duty; or (2) to foresee that any such act or
omission or Related Act or Omission might reasonably be
expected to be the basis of a Claim against any Insured;
and

5

Terms that the Zurich Policy uses in boldface are defined therein.

6

“Claim” is defined as “a demand for money or Legal Services.” (Zurich Policy at 7.)

7

“Related Act or Omission” is defined as “an act or omission that forms the basis for two or
more claims, where a series of continuous, repeated, interrelated or causally connected acts or
omissions give rise to one or more claims, whether committed by one or more Insured(s).” (Zurich
Policy at 9.)
12

(d)

B.

there is no policy that provides insurance to the Insured for
such liability or Claim.

DEFENSE AND INVESTIGATION
The Company shall have the right and duty to defend any Claim based on
an act or omission in the Insured’s rendering or failing to render Legal
Services for others, seeking Damages that are covered by this policy . . .
even if any of the allegations of the Claim are groundless, false or
fraudulent. . . .

(Zurich Policy at 1.) Zurich contends that it owes Wood no duty to defend, for several reasons:
1) there was no “potential claim” against Wood that existed during the Zurich Policy Period; 2)
Wood did not give sufficient notice of a “potential claim”; 3) Exclusion D of the policy
precludes coverage; and 4) the Full Firm Prior Acts Endorsement precludes coverage.
a.

Estoppel

As a threshold matter, the Court will address Wood’s estoppel argument.8 Wood argues
that Zurich is estopped from asserting any coverage defenses because Zurich did not provide her
a defense to the Adversary Proceeding and did not seek a declaratory judgment until it filed its
Crossclaim on December 22, 2015, seven months after the Adversary Complaint was filed.
Zurich contends that Wood forfeited these arguments by failing to plead estoppel and waiver as
affirmative defenses. In reply, Wood contends that there is no prejudice to Zurich from her
assertion of these arguments, and she requests leave to assert the defenses “[t]o the extent that
[her] Counterclaim does not adequately raise the issues.” (Dkt. No. 124, Wood’s Reply at 7-8.)

8

Wesco adopts Wood’s estoppel and waiver arguments. (Dkt. No. 102, Wesco’s Mem.
Supp. Mot. & Resp. at 13-14.)
13

Federal Rule of Civil Procedure 8(c) requires a defendant to plead estoppel and waiver
and other affirmative defenses in her answer to a complaint. But “the rule that forfeits an
affirmative defense not pleaded in the answer (or by an earlier motion) is . . . not to be applied
rigidly.” Matthews v. Wis. Energy Corp., 642 F.3d 565, 570 (7th Cir. 2011) (citation and
internal quotation marks omitted). Generally, the failure to plead an affirmative defense works a
forfeiture only if the plaintiff is harmed by the defendant’s delay in asserting it. Id. Although
Zurich asserts that it “would be prejudiced by” Wood’s delay “in that it was deprived of the
opportunity to conduct discovery on Wood’s purported defenses in order to fully combat them”
(Dkt. No. 113, Zurich’s Combined Resp./Reply at 8), Zurich does not attempt to explain, and it
is unclear to the Court, what additional discovery it would have conducted if Wood’s answer had
included estoppel and waiver defenses. The facts that underlie Wood’s arguments have been
known to Zurich throughout this litigation. Because Zurich has shown no harm resulting from
Wood’s delay in asserting the affirmative defenses of estoppel and waiver, the Court finds that
Wood has not forfeited the defenses by failing to plead them in her answer to the crossclaim, and
grants Wood’s request for leave to assert them.9 See Sunny Handicraft (H.K.) Ltd. v. Envision
This!, LLC, No. 14 C 1512, 2017 WL 1105400, at *9 (N.D. Ill. Mar. 24, 2017) (concluding that
defendant had not waived a privilege defense by failing to plead it in its answer, where plaintiffs
were unable to show prejudice from the delay).
Nevertheless, Wood fails to persuade the Court that her estoppel argument has merit.
“Generally, where a complaint against an insured alleges facts within or potentially within the
coverage of the insurance policy, and when the insurer takes the position that the policy does not

9

Wood’s waiver argument is briefly discussed below at note 12.
14

cover the complaint, the insurer must: (1) defend the suit under a reservation of rights; or (2)
seek a declaratory judgment that there is no coverage. If the insurer fails to take either of these
actions, it will be estopped from later raising policy defenses to coverage.” Standard Mut. Ins.
Co. v. Lay, 989 N.E.2d 591, 596 (Ill. 2013). “To avoid estoppel, the insurer must take one of
these actions ‘within a reasonable time of a demand by the insured.’” Nautilus Ins. Co. v. Bd. of
Dirs. of Regal Lofts Condo. Ass’n, 764 F.3d 726, 733 (7th Cir. 2014) (quoting Korte Constr. Co.
v. Am. States Ins., 750 N.E.2d 764, 770 (Ill. App. Ct. 2001)).
In support of her argument, Wood cites Central Mutual Insurance Co. v. Kammerling,
571 N.E.2d 806 (Ill. App. Ct. 1991), in which the court held that the insurer was estopped from
raising policy defenses when it had not sought declaratory judgment until over six months after
acknowledging its duty to defend and ten months after it received notice of potential liability.
The extent of Wood’s argument is that “Zurich waited approximately seven months after it had
acknowledged a duty to defend . . . and approximately 22 months after receiving the notice of a
potential claim” before seeking declaratory judgment. (Dkt. No. 104, Wood’s Resp. & CrossMot. at 20.)
Wood misses the mark. The time period between notice of an underlying action and the
filing of a declaratory-judgment action—the “raw chronological delay”—is not determinative of
whether estoppel applies; rather, the most important factor is whether the insurer waited until
trial or settlement was imminent. Westchester Fire Ins. Co. v. G. Heileman Brewing Co., 747
N.E.2d 955, 965 (Ill. App. Ct. 2001) (concluding that insurer’s declaratory judgment action,
which was filed six months after insurer received notice of the underlying suit and fifteen
months before that suit was settled, was timely). Kammerling is distinguishable because there,
the insurer waited until it was notified of the possible settlement of the underlying action to
15

assert its obligation to seek declaratory relief as an alternative to its duty to defend. 571 N.E.2d
at 810. Here, the Adversary Proceeding was in its early stages at the time Zurich sought
declaratory judgment. The Court therefore declines to estop Zurich from asserting its policy
defenses.
b.

Potential Claim

In Section V, “CONDITIONS,” subsection B.3, “NOTICE OF A POTENTIAL
CLAIM,” the Zurich Policy provides as follows:
The Insured, as a condition precedent to this policy, shall immediately provide
Notice to the Company if any Insured has any basis to believe that any Insured
has breached a professional duty or to foresee that any such act or omission might
reasonably be expected to be the basis of a Claim. If during the Policy Period
the Insured shall become aware of any act or omission that may reasonably be
expected to be the basis of a Claim against an Insured and gives Notice to the
Company of such act or omission and the reasons for anticipating a Claim, then
any such Claim that is subsequently made against the Insured and reported to the
Company shall be deemed to have been made and reported at the time such
Notice was given.
(Zurich Policy at 4.)
Zurich maintains that there was no “potential claim” against Wood of which she could
provide notice during the Zurich Policy Period because it is “indisputable” that during that time,
Wood was unaware of anyone alleging that she had breached a professional duty. (Dkt. No. 94,
Zurich’s Mem. Supp. Mot. at 8.)

Zurich fails to address the remainder of the policy’s

description of the relevant inquiry—whether Wood became aware of an act or omission that may
reasonably have been expected to be the basis of a claim against her. According to Zurich, the
Moving Creditors’ Motion for Leave “indisputably does not allege any act or omission against
Wood.” (Zurich’s Combined Resp./Reply at 3.) Zurich is incorrect. The Motion for Leave
seeks information pertaining to the “invoicing and correspondence” Wood handled for Glick in
16

relation to Play Makers Group, LLC.

(Mot. for Leave at 6.)

Wood’s “invoicing and

correspondence” are the acts of which she became aware that were reasonably expected to be the
basis of a claim against her. Zurich places great emphasis on fact that the Motion for Leave does
not explicitly allege that Wood committed any “wrongdoing.” (Zurich’s Combined Resp./Reply
at 4.) All that the Zurich Policy requires for a potential claim, though, is an act or omission that
may reasonably be expected to be the basis of a claim; it does not require an explicit allegation
of wrongdoing.
c.

Notice

Zurich also contends that Wood insufficiently reported a potential claim by failing to
satisfy the notice condition of the Zurich Policy, which states as follows:
NOTICE means the Insured’s providing the following information to the
Company, either in writing or as otherwise authorized by the Company:
1.
2.
3.
4.

the description of the alleged act or omission; and
the identities of the claimants or potential claimants; and
the identities of the responsible Insured(s); and
the date and circumstances by which the Insured(s) first became
aware of the act or omission.

(Zurich Policy at 8.)
Notice provisions in insurance policies “impose valid prerequisites to insurance
coverage.” Country Mut. Ins. Co. v. Livorsi Marine, Inc., 856 N.E.2d 338, 343 (Ill. 2006).
Therefore, “[b]reaching a policy’s notice clause by failing to give reasonable notice will defeat
the right of the insured party to recover under the policy.” Id. Where, as here, the material facts
are undisputed, the reasonableness of notice to an insurer by its insured is a question of law. See
Kerr v. Ill. Cent. R.R., 670 N.E.2d 759, 766 (Ill. App. Ct. 1996). “The Illinois Supreme Court
has looked to several factors in assessing whether an insured’s notice is reasonable, including:

17

(1) the specific language of the policy’s notice provision; (2) the insured’s sophistication in
insurance matters; (3) the insured’s awareness of an event which may trigger insurance
coverage; (4) the insured’s diligence in ascertaining whether policy coverage is available; and
(5) prejudice to the insurer.” Essex Ins. Co. v. Vill. of Oak Lawn, 189 F. Supp. 3d 779, 790 (N.D.
Ill. 2016) (citing cases). “A proper analysis of the sufficiency of notice is whether the notice
given objectively complied with the potential claim notice provision of a policy.” Cont’l Cas.
Co. v. Coregis Ins. Co., 738 N.E.2d 509, 518 (Ill. App. Ct. 2000).
The record belies Zurich’s assertion that “no information was provided” to it, (Zurich’s
Mem. Supp. Mot. at 3), during the Zurich Policy Period that described Wood’s alleged acts or
omissions, identified the potential claimants, or identified the date and circumstances by which
Wood first became aware of the alleged acts or omissions. As discussed above, the Motion for
Leave, which alerted Wood as to the potential claim against her, was submitted to Zurich by
Wood’s insurance broker on March 7, 2014, two days after it was filed, and the motion described
certain “invoicing and correspondence” that Wood handled for a Glick entity. Three days later,
Wood spoke with Peraggine, Zurich’s claim handler, and provided additional information to
him. Peraggine’s understanding at that time was that creditors of Glick were seeking documents
and information from Wood. (Peraggine Dep. at 47.) In Zurich’s “claim notes” for Wood’s
claim, Peraggine made a note that day titled “INS[URE]D Law Offices of Bari Wood,” in which
he stated: “Receipt and review of new matter assigned to me on March 10 2014. Matter is a
potential claim.” (Dkt. No. 105-6, Ex. G, at 2-3.)10 He also noted that he had spoken to Wood

10

Peraggine testified at his deposition that he wrote that the matter was a “potential claim”
not as a coverage determination, but only as “an internal reference for the system.” (Peraggine Dep.
at 31-36.)
18

“in detail.” (Id. at 3.) In an additional entry on that date, Peraggine further described the topics
of Wood and Peraggine’s conversation, and stated in part:
[Wood] performs corporate work for [Glick’s companies], including reviewing
their agreements, financing agreements, and transaction documents. . . . The
insured did not speak with the attorneys who propounded the subpoena, but did
speak with bankruptcy counsel for Glick. He believes they are looking for
documents related to the various transactions that Playmakers was involved in.
He thinks they are looking for evidence of sales and who they are doing business
with.
(Id. at 2.)
In the Notice of Circumstance form that Wood submitted to Zurich on March 27, 2014,
Wood indicated that March 7, 2014 was the date she first had reason to believe a claim might be
made. And, although she responded to the question that sought the identity of the potential
claimants by stating “[n]one at this time,” she also referred therein to Question 8, in response to
which she referred to the Motion for Leave, a copy of which Zurich had. Although Wood
herself did not identify the potential claimants, it was evident from the motion that they would
likely be the creditors or the bankruptcy estate. In any event, Zurich did not request further
information from Wood, even after it did not receive a response to the evidently-misdirected
Grob Letter of March 10. Wood forwarded Zurich a copy of the subpoena in June 2014. Later
that month, Grob stated in a claim-handling note: “Ins[ure]d was served with a subpoena for
documents. Potential claim relates to ins[ure]d as counsel for certain corporate entities allegedly
shielding certain assets.” (Dkt. No. 105-6, Ex. H, at 4.) Under a reservation of rights, Zurich
then provided Wood “pre-suit counsel” to assist her with responding to the subpoenas. In its
July 2014 Reservation of Rights Letter to Wood, Zurich identified a number of potential
coverage defenses, but it did not indicate that it was expecting any further notice information
from Wood, nor did it identify any notice-based defense. There is no indication in Zurich’s
19

claim-handling notes that Zurich believed notice was incomplete.
Wood promptly notified Zurich of the Motion for Leave within two days of its filing.
Within three weeks, she provided Zurich, in writing, with her identity as the responsible Insured
and the date and circumstances by which she first became aware of the alleged act or omission.
By providing Zurich with a copy of the Motion for Leave and referring to it, she also provided
Zurich with a description of the alleged act or omission and the identities of the potential
claimants. Wood acted diligently. Zurich fails to discuss the specific language of the policy’s
notice provision, which also allows for the Insured to provide notice of the specified information
“as otherwise authorized by” Zurich. It is undisputed that Wood answered all of Peraggine’s
questions in their initial conversation about the potential claim and that Wood reported all of the
information she had to Zurich. Zurich did not follow up thereafter to seek any additional
information from Wood, nor did it identify a potential notice-based defense in the Reservation of
Rights Letter. Furthermore, Zurich does not identify any prejudice that resulted from what it
deems inadequate notice; in fact, it does not even explain what it did not know or how the
information Wood provided was incomplete. Application of the relevant factors considered by
the Illinois Supreme Court in determining reasonableness of an insured’s notice—the specific
language of the Zurich Policy’s notice provision, Wood’s awareness of the allegations in the
Motion for Leave and her diligence in notifying Zurich of the matter, and the lack of prejudice to
Zurich11—therefore compels the conclusion that Wood gave Zurich reasonable notice of a

11

The fifth factor is the insured’s sophistication in insurance matters. Zurich argues that
Wood is an attorney and “therefore, sophisticated in commerce and insurance matters,” (Zurich’s
Combined Resp. at 5), but that is a non sequitur, and Zurich does not cite any evidence. In any
event, on this record this factor has little to no relevance, so it favors neither party.
20

potential claim.12
Zurich cites no authority that supports its argument that the information provided by
Wood was insufficient to comply with the notice condition under Illinois law. Zurich cites, as an
“illustrative” decision, Illinois State Bar Association Mutual Insurance Co. v. Beeler Law, P.C.,
No. 1-14-0790, 2015 WL 1407310 (Ill. App. Ct. Mar. 25, 2015), in which the court affirmed the
circuit court’s ruling that the insured under a “claims made and reported” professional liability
insurance policy had failed to give proper notice within the policy period where the only
information it had provided prior to the policy’s expiration (and one day prior, at that) was the
following statement: “Potential claims: 1) RM Lucas, Co.; 2) R Magnum; 3) Abdul Razzaq.
Details to follow.” Id. at *1. Zurich’s reliance on Beeler is unavailing, for two reasons. First,
Beeler is an unpublished decision of the Illinois Appellate Court, so it has no precedential value.
See Ill. S. Ct. R. 23(e)(1) (unpublished orders are nonprecedential and generally may not be cited
by any party). Second, the decision is factually distinguishable because the insured provided the
insurer virtually no information about the potential claim during the policy period. Zurich also
cites and discusses Darwin National Assurance Co. v. Centre for Management and Technology,
Inc., Civ. Action No. MJG-06-3189, 2008 U.S. Dist. LEXIS 108184 (D. Md. Mar. 14, 2008),
which is inapposite because it applies Maryland law.
d.

Exclusion D

Even if Wood adequately reported a potential claim, says Zurich, Exclusion D of the
Zurich Policy precludes coverage. Exclusion D provides in relevant part as follows:
This policy shall not apply to any Claim based upon or arising out of, in whole or

12

Given this ruling, the Court need not discuss Wood’s argument that Zurich waived its right
to rely on the notice provision.
21

in part:
...
D. the Insured’s capacity or status as:
1. an officer, director, partner, trustee, shareholder, manager or employee
of a business enterprise . . .
(Zurich Policy at 2.)
According to Zurich, Exclusion D applies because the Adversary Proceeding arises at
least in part out of Wood’s status as an employee of a Glick entity or entities. It is undisputed
that Wood served as in-house general counsel and Chief Operating Officer (“COO”) of Glick
Group, LLC from fall 2008 to December 31, 2012, and that she did not begin practicing law as a
sole proprietor until May 6, 2013. The Trustee alleges in the Adversary Proceeding that Wood,
“as Chief Operating Officer and General Counsel of Glick Group . . . assisted with the
negotiation and review” of certain legal documents executed by Glick entities in 2012; knew of
“Glick’s mounting debts” through her roles as COO and in-house counsel; negotiated and
drafted in 2011 and 2012 certain agreements and licenses for Glick’s companies and created
certain Glick entities; “played a vital role in the formation of [a Glick trust and certain trust
entities], the transfer of [a] license and the ongoing scheme to defraud creditors,” as COO and
counsel; “aided and abetted [Glick’s] fraudulent transfer and concealment scheme”; and received
certain payments without authority from the Trustee. (Am. Adversary Compl. at 26, 76-83.)
In response, Wood argues that Zurich’s position ignores the plain language of Exclusion
D and the policy’s definition of “Insured.”13 In Wood’s view, because the policy includes

13

Wood also asserts that Zurich overlooks “the rationale behind business enterprise
exclusions in lawyers’ professional liability insurance policies,” (Wood’s Resp. & Cross-Mot. at 11),
but does not explain why the Court should consider this argument when neither Zurich nor Wood
contends that Exclusion D is ambiguous.
22

among its definition of an “Insured” “any lawyer or professional corporation listed in the
application on the day the Policy Period incepts until such time as the lawyer or professional
corporation ceases to be a member of the Named Insured,” the definition (and Exclusion D)
contains a “temporal component.” (Wood’s Resp. & Cross-Mot. at 11-12.) Therefore, says
Wood, because she left the Glick Group’s employ more than four months prior to becoming an
“Insured,” no “Insured,” as the policy defines that term, had any status as an employee of a
business enterprise during the term of the Zurich policy. (Id.)
The Court is unpersuaded by Wood’s tortured reading of Exclusion D, which is
unsupported by authority and at odds with the provision’s plain language.14 She effectively
grafts a temporal limitation onto the exclusion to require that the claim at issue have arisen out
of the Insured’s status as an officer or employee during the Policy Period. But that limitation
simply does not exist. The majority of the transactions upon which the Trustee bases his claims
against Wood are alleged to have occurred while Wood was acting as COO and general counsel
of Glick Group, prior to the time she began practicing law as a sole proprietor. The Trustee’s
claims thus arise at least in part if not wholly from Wood’s status as an officer and employee of a
business enterprise, and Zurich has therefore clearly demonstrated that Exclusion D precludes
coverage. Accordingly, summary judgment in favor of Zurich and against Wood is appropriate

14

Moreover, it would seem that Wood’s argument, taken to its logical extreme, would mean
that she would have no standing to sue under the Zurich Policy after it expired in May 2014 because
she was no longer an “Insured.”
23

on Zurich’s crossclaim as to the duty to defend, as well as on Count I of Wood’s counterclaim15
and Count IV of Wesco’s amended complaint.
Having held that Exclusion D relieves Zurich of the duty to defend Wood in the
Adversary Proceeding, the Court need not consider whether the Zurich Policy’s “Full Firm Prior
Acts Endorsement” exclusion does the same.
e.

Duty to Indemnify

“[I]f the Court concludes that there is no duty to defend, it can immediately address the
question of an insurer’s duty to indemnify even if the underlying liability of the insured remains
unresolved.”16 The Cincinnati Ins. Co. v. Berkshire Refrigerated Warehousing, LLC, 149 F.
Supp. 3d 867, 874 (N.D. Ill. 2015). “An insurer’s duty to defend is broader than its duty to
indemnify. If an insurer has no duty to defend, it has no duty to indemnify.” Nat’l Cas. Co. v.
McFatridge, 604 F.3d 335, 338 (7th Cir. 2010) (applying Illinois law). As a result, Zurich has
no duty to indemnify Wood, so summary judgment in favor of Zurich and against Wood is
appropriate on Zurich’s crossclaim as to the duty to indemnify, as well as on Count II of Wood’s
counterclaim.
3.

Wesco

Wood, P.C. does not assert a claim against Wesco, nor does Wood assert any claim based

15

As noted above, Wood also asserts in Count I of her counterclaim that she is entitled to
relief under section 155 of the Illinois Insurance Code for Zurich’s “vexatious and unreasonable”
refusal to defend her. Because the Court has concluded that Zurich did not have a duty to defend
Wood, she is not entitled to relief under section 155. See First Ins. Funding Corp. v. Fed. Ins. Co.,
284 F.3d 799, 807 (7th Cir. 2002).
16

In their recent motion to supplement the record, the parties state that the question of
indemnification by Zurich or Wesco “may become moot, depending on any potential appellate
review of” the bankruptcy court’s with-prejudice dismissal of the claims against Wood. (Joint Mot.
Supplement at 2 n.1.)
24

on the First Wesco Policy. Wood labels her claims against Wesco as being brought “in the
alternative.” (Wood’s Countercl. at 21, 23.) She states therein that “[i]n the event the Court
finds that none of Wood’s multiple notices to Zurich of the Motion for Leave constitute notice of
a potential Claim under the Zurich Policy, then the Adversary Complaint was a claim first made
against Wood and reported to Wesco during the period of the Second Wesco Policy, and Wood
neither knew of nor could reasonably have foreseen prior to the inception date of the First Wesco
Policy that any act or omission might be expected to be the basis of a claim.” (Id. ¶¶ 100, 111.)
The Court has held that Zurich has no duties to defend or indemnify Wood, but its holding is
based on Exclusion D, not the notice issue. Because the Court held that Wood sufficiently
reported a potential claim to Zurich during the Zurich Policy Period, Wood’s claims against
Wesco are rendered moot and therefore dismissed.
In its amended complaint, Wesco seeks declaratory judgments that it has no duty to
defend or indemnify Wood, P.C. or Wood under either Wesco policy. The First Wesco Policy
identifies the Law Offices of Bari Wood as the “Named Insured,” and the Second Wesco Policy
identifies the Law Offices of Bari D. Wood, P.C. as the “Named Insured.” The policies include
the “Named Insured” in the definition of the “Insured,” along with certain affiliated lawyers and
employees. (Wesco Policies at 3.) There is no dispute that Bari Wood is an “Insured” under the
policies. The “Insuring Agreement” section of the Wesco Policies provides as follows:
A.

COVERAGE
The Company17 will pay on behalf of the Insured sums in excess of the
deductible that the Insured shall become legally obligated to pay as

17

Terms that the Second Wesco Policy uses in boldface are defined therein.
25

damages because of a claim18 that is first made against the Insured and
reported to the Company during the policy period or any Extended
Reporting Period arising out of an act or omission in the performance of
legal services by the Insured . . . , provided that:
1.

prior to the inception date of the policy period, the Insured did
not give notice under any other insurance policy of such claim or
related claim19 or such act or omission or related act or
omission;20 and

2.

prior to the inception date of the first policy, or if this policy has
been continuously renewed, prior to the inception date of the first
policy issued by the Company, no Insured knew of or could
reasonably have foreseen that any such act or omission, or related
act or omission, might be expected to be the basis of a claim.

(Wesco Policies at 1.)
It is undisputed that no claim was made against Wood, P.C. and that Wood, P.C. did not
report any claim to Wesco during either Wesco Policy Period. It is also undisputed that Wood
did not report any claim to Wesco during the First Wesco Policy Period. Summary judgment in
favor of Wesco and against Wood, P.C. and Wood on Counts I and II of Wesco’s amended
complaint is therefore appropriate.
Although Wood reported a claim to Wesco during the Second Wesco Policy Period,
before that period she had previously given notice to Zurich of the acts alleged in the Motion for

18

“Claim” is defined as “a written or verbal demand received by the Insured for money or
services arising out of an act or omission . . . in rendering or failing to render legal services.”
(Wesco Policies at 2.)
19

“Related claim” is defined as “all claims arising out of a single act or omission or arising
out of related acts or omissions in the rendering of legal services.” (Wesco Policies at 4.)
20

“Related act or omission” is defined as “all acts or omissions in the rendering of legal
services that are temporally, logically or causally connected by any common fact, circumstance,
situation, transaction, event, advice or decision.” (Wesco Policies at 4.)
26

Leave, which at least meet the definition of “related act(s) or omission(s)” under the Wesco
Policies.

Thus, Wood cannot show that she satisfies the coverage condition set forth in

subsection A.1. of the Wesco Policies’ Insuring Agreement. Nor can she show that she satisfies
the coverage condition set forth in subsection A.2.21 Prior to the May 2014 inception date of the
First Wesco Policy, Wood knew that the acts included in the Motion for Leave might be
expected to be the basis of a claim. Indeed, in her March 2014 Application for insurance, Wood
responded in the affirmative to the question that asked whether she was aware of any act that
could result in a claim against her, and she referred to the Motion for Leave.
Coverage is also precluded under Exclusions D and F of the Wesco Policies, which
provide as follows:
This Policy does not apply:
...
D.
to any claim based on or arising out of an Insured’s capacity as:
1.

...
F.

a former, existing or prospective officer, director, shareholder,
partner or manager of a business enterprise . . . unless such
enterprise . . . is named in the Declarations . . . .22

to any claim based on or arising out of legal services performed for any
existing or prospective partnership, organization, corporation, company or
other business enterprise, including any claim made by or on behalf of
such [entity], if at the time of the act or omission giving rise to such
claim:
...
2.
any Insured:
a.

was a partner or employee of such enterprise . . . .

(Wesco Policies at 6.) As discussed above with respect to the Zurich Policy’s similar Exclusion

21

Wood does not argue otherwise as to A.1 or A.2.

22

The Glick Group is not named in the Declarations.
27

D, the Trustee’s claims arise out of Wood’s capacity as an officer of Glick Group and the legal
services she performed for the Glick Group as an employee, so Exclusions D and F of the Wesco
Policies also preclude coverage.23 Summary judgment in favor of Wesco and against Wood on
Count III of Wesco’s amended complaint is therefore appropriate. In view of these rulings, the
Court need not address Wesco’s arguments regarding the Wesco Policies’ Retroactive Date
Limitation Endorsement or definition of “damages.”
As a final matter with regard to Wesco’s motion, the Court must address Count V of the
amended complaint, in which Wesco alleges that its policies “are excess vis-à-vis the Zurich
Policy,” “[t]o the extent that the First Wesco Policy and/or the Second Wesco Policy apply to
any claim.” (Wesco’s Am. Compl. ¶ 239.) Because the Court has concluded that there is no
coverage under any of the policies, Count V is dismissed as moot.
B.

Zurich’s Motion to Strike Report and Bar Testimony of Wesco’s Expert Witness
Prior to the filing of the parties’ motions for summary judgment, Zurich moved to strike

the report of Wesco’s expert witness, Charles D. Henderson, and bar his testimony. None of the
parties’ motions for summary judgment, however, relied on the admission or exclusion of this
evidence. In its response to Zurich’s motion to strike, Wesco states that it intends to use
Henderson’s testimony “in the event that the court determines certain factual issues must be
resolved by a trier of fact.” (Dkt. No. 81, Wesco’s Opp’n Zurich’s Mot. Strike at 1.) The Court
has not made such a determination, and today’s ruling disposes of the entire case. Accordingly,

23

In response to Wesco’s argument regarding Exclusions D and F, Wood simply argues that
it “fails for the same reasons that Zurich’s motion fails” with respect to Zurich’s similar provision,
and she “incorporates her response to Zurich’s argument.” (Dkt. No. 118, Wood’s Resp. Wesco’s
Mot. at 8.) Wood does not present any argument on the particular language of Wesco’s Exclusions
D or F.
28

Zurich’s motion to strike is denied as moot.
CONCLUSION
The motion of American Zurich Insurance Company for summary judgment [92] is
granted. The motion of Wesco Insurance Company for summary judgment [100] is granted in
part and denied in part. The motion of Bari Wood and the Law Offices of Bari Wood, P.C. for
summary judgment [104] is denied. The motion of American Zurich Insurance Company to
strike the expert report of Charles D. Henderson and bar his testimony [71] is denied as moot.
Summary judgment is entered: (1) in favor of American Zurich Insurance Company and
against Bari Wood on Zurich’s crossclaim and on Counts I and II of Wood’s counterclaim; (2) in
favor of Zurich and against Wesco Insurance Company on Count IV of Wesco’s amended
complaint; (3) in favor of Wesco and against Wood, P.C. and John E. Gierum, as Trustee for the
bankruptcy estate of Jonathan F. Glick, on Count I of Wesco’s amended complaint; and (4) in
favor of Wesco and against Wood and John E. Gierum, as Trustee for the bankruptcy estate of
Jonathan F. Glick, on Counts II and III of Wesco’s amended complaint. Counts III and IV of
Wood’s counterclaim and Count V of Wesco’s amended complaint are dismissed as moot. Civil
case terminated.

DATE: September 27, 2017

____________________________________
Ronald A. Guzmán
United States District Judge

29