An insurance company called Houston Specialty Insurance, has filed a ‘complaint for declaratory judgment’ in a court in the United States claiming that it has no obligation to defend Dr. Papa Kwesi Nduom and his conglomerate.
Lawyers for Birim Group LLC have filed a writ at a court in Chicago, US, against Dr. Nduom, his family and companies, to retrieve lost investments on behalf of some Ghanaians, and in the ensuing tussle, the defendants’ insurers have ran to United States District Court for the Northern District of Illinois Eastern Division, trying to push that its agreement with GN Bank of Illinois belonging to the defendants, does not cover the reliefs that Birim is seeking.
Houston Specialty, a Texas stock insurance company with its principal place of business in Houston, are claiming that the action by Birim against Dr. Nduom is outside the scope of the agreement they had with GN Bank of Illinois and appeared to claim that what Birim has accused the defendants of, bothers on alleged fraud, which the insurers are saying they do not cover.
Plaintiff & Defendants
In the complaint for declaratory judgment, the plaintiff, Houston Specialty Insurance Company (Houston Specialty), through its attorneys, John E. DeLascio and Paris B. Glazer of Hinshaw & Culbertson LLP, said their action is against “Defendants (1) GN Bank, a federally-chartered institution (“GN Bank of Illinois”), (2) Paa Kwesi Nduom aka Dr. Paa Kwesi Nduom , Papa Kwesi Nduom, Kwesi P. Nduom (“Paa Nduom”), an individual, (3) Yvonne Nduom, an individual, (4) Nana Kweku Nduom, an individual, (5) Edjah Nduom, an individual, (6) Nana Aba Nduom, an individual, (7) Robert Klamp, an individual, (8) James L. Buckner, an individual, (9) Lisa Finch, an individual, (10) Francis Baffour, an individual, (11) William C. Case: 1:21-cv-01749 Document #: 1 Filed: 03/31/21 Page 1 of 34 PageID #:12 1039341\307747800.v1 Goodall, an individual, (12) Donald Davidson, an individual, and (13) Birim Group, LLC, a California limited liability company.”
Nature of Action
They are moving that “This is an insurance coverage action. Houston Specialty seeks a declaratory judgment that, under an insurance policy issued to GN Bank of Illinois for the policy period of June 30, 2020 to June 30, 2021, it owes no duty to advance ‘Defense Costs’, to defend, to provide indemnity, or to pay or reimburse “Defense Costs” or “Loss” for the Complaint filed in the lawsuit captioned Birim Group, LLC v. Paa Kwesi Nduom, et al., Case no. 1:20-cv-07198, pending in the United States District Court for the Northern District of Illinois (the ‘Birim Lawsuit’).”
Maddoff on Steroids
The insurers are saying that “The underlying Complaint filed in the Birim Lawsuit pleads, among other things, counts for RICO and fraud against GN Bank of Illinois and other defendants, and alleges that ‘the scale of defendants’ fraudulent and criminal conduct will put Bernie Maddoff (sic) to shame’ and ‘is best described as Maddoff (sic) on steroids’.”
“The underlying Complaint in the Birim Lawsuit was filed by the Birim Group, LLC, as an assignee, which alleges that, in December 2019, it was assigned the claims and rights of an account holder of Gold Coast Fund Management (located in Ghana) and an account holder of a different ‘GN Bank,’ a Ghanaian business entity (located in Ghana).”
They pushed further that “the bases for the relief requested in this Complaint for Declaratory Judgment include (a) that, even if the underlying Complaint fell within the policy’s Insuring Agreements, coverage is excluded for the underlying Complaint by the policy’s Retroactive Date endorsement (which has Retroactive Date of June 30, 2020) and its Prior Acts Exclusion endorsement (which has a date of June 30, 2020); and (b) that, in any event, the underlying Complaint does not fall Case: 1:21-cv-01749 Document #: 1 Filed: 03/31/21 Page 2 of 34 Page ID #:23 1039341\307747800.v1 within the policy’s Insuring Agreements for Insured Persons Liability/Company Indemnification or Bankers Professional Liability.”
Plaintiff’s Direction
According to the insurer, the defendant GN Bank of Illinois “is a federally-chartered institution, with a principal place of business in Chicago, Illinois, and is not a citizen of the State of Texas,” and adds that “On information and belief, Defendant Paa Nduom is a natural person who is doing business within the State of Illinois and/or has transacted business within the State of Illinois related to the matters addressed in this Complaint, and who is not a citizen of the State of Texas.”
The insurer goes ahead to list all the other defendants and traces their business backgrounds in the writ.
Jurisdiction & Venue
According to the insurer, the court “has personal jurisdiction over the Defendants pursuant to Fed. R. Civ. P. 4(k)(1) and 735 ILCS 5/2-209(a), 5/2-209(b), and/or 5/2-209(c),” adding “this Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) (1) because, on information and belief, there is diversity of citizenship between the Case: 1:21-cv-01749 Document #: 1 Filed: 03/31/21 Page 5 of 34 Page ID #:56 1039341\307747800.v1.”
“Plaintiff, Houston Specialty, and all the Defendants, and the amount in controversy exceeds $75,000, exclusive of interest and costs, based on the allegations and prayer for relief of the Birim Lawsuit, which has been tendered to Houston Specialty for payment of defense costs and indemnity under an insurance policy which is subject to, among other limits, a Total Policy Limit of $1,000,000 for all Insuring Agreements, regardless of whether such Insuring Agreement is provided as a sublimit or separate limit.”
It said further that “this Court has subject matter jurisdiction over the several declaratory judgment counts of this Amended Complaint pursuant to 28 U.S.C. § 2201(a),” adding “An actual, immediate, and justiciable controversy exists between the parties with respect to the liability insurance policy, such that a declaratory judgment will affect the rights and interests of the parties.”
“Venue is proper in this district pursuant to 28 U.S.C. § 1391(b) (2), because a substantial part of the events or omissions giving rise to the claim took place in Cook County, Illinois, which is located in this district, and/or pursuant to 28 U.S.C. § 1391(b) (3) because, on information and belief, one or more of the Defendants is subject to personal jurisdiction in this district,” it added.
It is unclear if the defendants have yet filed any response to the insurer’s claims before the court.
Documents filed on the website of the court do not show any response from the defendants.
By Ernest Kofi Adu