Adams Golf - Nets Partial Summary Judgment for $5M

[GolfSpy_X]

Adams Golf Inc. (Nasdaq: ADGF) said a partial summary judgment by an Illinois court found Zurich American Insurance Co. in breach of contract, opening up the possibility of winning back $5 million it paid to settle a class-action lawsuit. The Plano-based maker of golf clubs and accessories disclosed in an SEC filing that the Circuit Court of Cook County granted its motion for partial summary judgment but dismissed a claim for misrepresentation and unfair claims settlement practices under Chapter 541 of the Texas Insurance Code. The court also denied Zurich's motion for summary judgment on Adams Golf's claim for violations of the Texas Prompt Payment of Claims statute.

 

Because the rulings are interlocutory, the state court, which is due to hear the case in August, can alter or vacate them. However, if the rulings stand, Adams Golf could get $5 million plus 18 percent interest from the date of loss and "reasonable attorneys' fees," the company reported in the filing. Adams Golf also is seeking consequential damages.

 

Adams Golf's case came after a federal court ordered it and its insurers to pay $16.5 million in a class-action lawsuit related to the company's initial public offering. Of that amount, Adams paid $5 million and claimed it from its former insurance broker, Thilman & Filipini LLC, and from Zurich, contending that it held valid corporate liability insurance coverage for its directors and officers.

 

However, Zurich, which provided insurance coverage of $5 million for a layer of exposure between $15 million and $20 million, contended it had notified Adams Golf on March 30, 2006, that it was denying coverage because it was not provided timely notification of the class-action lawsuit.

 

http://dallas.citybizlist.com/16/2011/6/19/Adams-Golf-Scores-Minor-Victory-in-5M-Pursuit-of-Zurich-American-Insurance--cbl.aspx