Insurance Companies Seek Declaration of No Obligation to Client

Fidelity and Guaranty Insurance Company (FGIC) and Travelers Property and Casualty Company of America (Travelers P&C) filed suit against defendants Bright Haven Behavioral Health Center, LTD., Samira Jimenez, and Clarity Clinic on Tuesday in the Northern District of Illinois Eastern Division. The suit seeks a judgment of no obligation to defend defendants Bright Haven and Jimenez in their ongoing litigation with defendant Clarity.

In late 2021, defendant Clarity filed a suit against defendant Bright Haven and defendant Jimenez for injunctive relief and monetary damages. The suit alleged that defendant Bright Haven “obtained and converted Clarity’s confidential information with respect to its business in providing clinical psychiatry and therapy services to patients.” Defendant Jimenez was accused of beginning to work for Bright Haven while still working for Clarity, and covertly sending along operational information and documents to Bright Haven so that they would be able to compete with Clarity.

When Clarity discovered Jimenez’s misconduct, they terminated her. Their complaint against Bright Haven and Jimenez cites breach of fiduciary duties, conversion, violations of the Illinois Trade Secrets Act, tortious interference with business expectancy, and civil conspiracy.

The plaintiff in this suit, Fidelity and Guaranty Insurance Company, or FGIC, issued a commercial insurance policy to defendant Bright Haven from September 2021 to September 2022.

The cyber coverage portion of the policy asserts that FGIC will not have a duty to defend the insured “against any claim or suit seeking damages for loss to which the insurance provided under your cyber liability coverage forms does not apply.” Bright Haven’s cyber liability coverage does not apply to criminal, dishonest, fraudulent, or malicious wrongful acts or knowing violations of rights or laws. Another clause in their contracts explains that FGIC will not be responsible for incurred costs of the insured if those costs come about from a knowing violation of intellectual property.

Plaintiff Travelers P&C also issued an insurance policy to Bright Haven, titled the excess follow-form and umbrella liability insurance policy. In the policy, Travelers P&C asserts that it will provide coverage only if the underlying insurance (FGIC) would apply to the damages sought in the lawsuit, which it does not. Therefore, Travelers P&C maintains that is has no obligation to provide coverage.

Since Clarity alleges that Bright Haven obtained their trade secrets illegally, FGIC asserts that it has no duty to defend or indemnify either Bright Haven or its employee, Jimenez. Based off of this assertion, Travelers P&C also explains that it has no obligation to the defendants. The plaintiff are seeking declarations of no obligation to defend Bright Haven and Jimenez and any other relief deemed proper by the Court.

The plaintiffs are represented by Aronberg Goldgehn Davis & Garmisa.