The Texas Case
This dispute arises from a lawsuit filed against Colliers in Texas State Court by plaintiffs, Mattress Firm Inc., a Colliers client, who alleged that former Colliers executive, Alexander Deitch was involved in various acts of corruption, including bribery, receiving kickbacks and self-dealing.
Colliers was first put on notice regarding the corrupt broker allegations in March 2016, but because no actual suit had been filed, Colliers did not report it to its insurer Maxum until June 2017, after it had received a draft copy of Mattress Firm Inc.’s complaint.
Mattress Firm Inc filed its complaint in October 2017. Colliers informed Maxum that it had retained Lewis Brisbois Bisgaard & Smith LLP as its defense counsel and at that time requested Maxum make a determination regarding their coverage position.
Maxum’s Coverage Position
After a review of the claim, Maxum sent Colliers a “reservation of rights” letter in January 2018, claiming that it would honor its defense obligations under its professional liability insurance policy, while also stating that it was reserving its right to withdraw defense and refuse indemnification.
