Blue Man Group Holding V Ironshore Indemnity

FILED: NEW YORK COUNTY CLERK 04/20/2018 11:36 AM INDEX NO.
651925/2018
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/20/2018
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
BLUE MAN GROUP HOLDINGS, LLC,
Index No.
Plaintiff,
-against-
Date Purchased:
IRONSHORE INDEMNITY, INC.,
SUMMONS
Defendant.
TO: Ironshore Indemnity, Inc.

Ironshore Insurance Services, LLC
7th
One State Street Plaza, FlOOr
New York, New York 10004
YOU ARE HEREBY SUMMONED and required to serve upon the undersigned
attorneys for Plaintiff Blue Man Group Holdings, LLC an answer to the complaint in this action
within twenty (20) days after the service of this summons, exclusive of the day of service, or
within thirty (30) days after service is complete if this summons is not personally delivered to
you within the State of New York.
YOU ARE HEREBY NOTIFIED THAT should you fail to answer, a judgment will be
entered against you by default for the relief demanded in the complaint.
Plaintiff designates New York County as the place of trial. Pursuant to CPLR § 503,
venue is proper pursuant because Plaintiff and Defendant reside in New York County.
Dated: New York, New York

April 20, 2018
VENABLE LLP
By: /s/ Patrick J. Boyle

Patrick J. Boyle
Rockefeller Center
1270 Avenue of the Americas, 24th Floor
New York, New York 10020

Tel: (212) 307-5500
Fax: (212) 307-5598
Attorneys for Plaintiff Blue Man Group Holdings, LLC
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FILED: NEW YORK COUNTY CLERK 04/20/2018 11:36 AM INDEX NO. 651925/2018
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
BLUE MAN GROUP HOLDINGS, LLC,
Plaintiff, COMPLAINT
--against-- Index No.
IRONSHORE INDEMNITY INC.,
Defendant.
Plaintiff Blue Man Group Holdings, LLC ("BMGH"), by and through undersigned
("Ironshore,"
counsel, for its Complaint against defendant Ironshore Indemnity Inc. or
"Defendant"
"Defendant") states and alleges as follows:
NATURE OF THE DISPUTE
1. This insurance coverage dispute arises out of Ironshore's refusal to indemnify
reported"
BMGH for losses covered under a "claims made and Directors, Officers and Private
Company Liability Insurance Policy, issued by Ironshore to BMGH, Policy No. 001692002 (the
"Policy"
"Policy"). In 2016, an individual named Ian Pai brought a lawsuit against BMGH, other entities
related to BMGH and the individual founding members of the Blue Man Group (the "Pai
Action"
Action"). Although Ironshore had previously agreed to pay 70% of the costs of defense for the
Pai Action, Ironshore steadfastly, and wrongly, refuses to indemnify Plaintiff for a settlement it
reached with Mr. Pai.
2. BMGH is suing Ironshore for breach of contract and a declaration that Ironshore
is required to indemnify BMGH for a settlement it reached with Mr. Pai, up to the remaining
limits of the Policy.
3. Briefly, the Policy provides coverage for costs of defense and indemnifies (up to
"Claim" Act,"
the Policy limits of $3,000,000) for any for any "Wrongful which includes any
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alleged act by directors, officers, employees or the company itself. Mr. Pai both brought such
claims in the Pai Action, and Plaintiff reported those claims to Ironshore, within the policy
period of the Policy.
4. Ironshore initially disclaimed coverage and refused to pay any of the costs of
defense, on the ground that Mr. Pai allegedly had first raised his issues with the Blue Man Group
by way of a letter sent by his counsel in September of 2014. Ironshore argued that the claim
therefore predated the policy period and it refused to provide coverage on that basis.
5. Plaintiff responded that Ironshore's coverage position was contrary to the express
"Claim"
language of the Policy. Plaintiff pointed out that even if Mr. Pai's 2014 letter was a as
that term is defined in the Policy, which it was not, the Pai Action was commenced and reported
to Ironshore during the Policy Period, and the Policy does not allow Ironshore to relate a timely
claim to a claim or circumstance arising prior to the Policy Period for the purpose of denying
coverage.
6. Ironshore thereafter executed a funding agreement with Plaintiff by which it
agreed to pay 70% of the costs of defense for the Pai Action.
7. Ironshore, however, reserved its rights with respect to its duty to indemnify the
Blue Man Group under the Policy for any settlement or judgment obtained by Mr. Pai.
8. In January of 2018, with the trial in the Pai Action fast approaching, Plaintiff
requested Ironshore's contribution to a potential settlement with Mr. Pai. In response, on
January 9, 2018, with much more than $2,000,000 remaining of the $3,000,000 limits of the
Policy, Ironshore agreed to contribute only $350,000 towards settlement on the ground that this
amount appeared to be within what it had budgeted for costs of defense. Ironshore refused to
contribute any further amounts because it did not believe that it had "any indemnity obligation
for this matter, and that its contribution to a settlement would be limited to defense cost
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avoidance."
9. Thereafter, Plaintiff continually kept Ironshore apprised of the imminent trial date
in the Pai Action and potential settlement opportunities.
10. Ironshore did not cooperate with Plaintiff or participate meaningfully in the
settlement negotiations. For example, with a little more than a week to go before trial, Ironshore
actually lowered the amount it was offering from $350,000 to $280,000. On the eve of trial,
Ironshore increased its contribution towards settlement, but only to $500,000. Without a
meaningful settlement contribution from Ironshore, Plaintiff and the other defendants in the Pai
Action could not settle the case with Mr. Pai.
11. Trial commenced on April 9, 2018. On April 10, 2018, Plaintiff informed
Ironshore that Plaintiff had received a new settlement demand from Mr. Pai. Plaintiff further
informed Ironshore that if Ironshore contributed the remaining value of the Policy, or potentially
even something less than that, Plaintiff would be able to make up the difference and to accept
Mr. Pai's demand. Plaintiff requested that Ironshore tender the policy limits. Ironshore refused.
On April 12, 2018, after two more full days of trial, Plaintiff settled with Mr. Pai without
Ironshore's participation.
12. Plaintiff brings this lawsuit as a means to compel Ironshore to live up to its
coverage obligation under the Policy to indemnify Plaintiff for its settlement with Mr. Pai.
Plaintiff seeks the amount left on the Policy (approximately $2,000,000) after Ironshore fully
honors the funding agreement it made with Plaintiff regarding the costs of defense for the Pai
Action.
PARTIES
13. Plaintiff Blue Man Group Holdings, LLC ("BMGH") is a Delaware limited
liability company with its principal place of business at 599 Broadway, Sixth Floor, New York,
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NY 10012.
14. Upon information and belief, Defendant Ironshore Indemnity, Inc. is qualified to
do business in New York and maintains an office located at One State Street Plaza, New York,
New York for the purpose of issuing insurance policies to citizens of New York.
JURISDICTION AND VENUE
15. This Court has personal jurisdiction over Ironshore pursuant to CPLR § 301
and/or CPLR § 302.
16. Among other things, Ironshore transacted business with Plaintiff in New York,
where Plaintiff is headquartered, and Plaintiff's claims arise from such acts. These acts are
including but not limited to negotiating and placing the Policy with Plaintiff, and denying
coverage under the Policy to Plaintiff, a citizen of New York, for a settlement arising out of a
litigation in New York against Plaintiff and other insureds brought by Mr. Pai, who is also
located in New York.
17. Upon information and belief, among other things, Ironshore:
a. is qualified to do business in New York;
b. maintains an office in New York for the purpose of conducting business
with citizens of New York; and
c. regularly does and solicits business, and derives substantial revenue from
insurance policies placed in New York.
18. Venue is proper in this County pursuant to CPLR § 503 because Plaintiff and
Defendant reside in this County.
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FACTS
I. The Blue Man Group
19. The Blue Man Group is a performing group, best known for its award-winning
Show"
show (the "Blue Man Group Show"), a dynamic combination of performance art, comedy, music
and technology. The members of the Blue Man â€”

Group-Matt
founding Goldman, Phillip
Stanton and Chris â€”

Wink-were friends over 25 years developed the original
who, ago,
performance that became the Blue Man Group Show. Since 1991, the Blue Man Group Show
has been performed continuously in multiple venues and has been seen in 15 countries by over
35 million people worldwide and is a world-renowned global entertainment phenomenon.
II. The Policy Issued by Ironshore to BMGH
20. The Policy, No. 001692002, is a directors, officers and private company liability
insurance policy with a policy period of September 1, 2015 to September 1, 2016 (the "Policy
Period"
Period").
21. BMGH is the named Insured on the Policy.
22. The Policy is a claims made and reported insurance policy. Pursuant to the
"Loss"
Policy's Section I, Ironshore agreed to pay on behalf of the Insured all which the Insured
against"
"shall be legally obligated to pay as a result of a Claim first made the Insured "during
Act,"
the Policy Period or the Discovery Period for a Wrongful and "reported to the Insurer
VII."
pursuant to Section Section VII requires the Insured to "give the Insurer notice in writing
Period,"
of any Claim which is made during the Policy Period or Discovery and such notice
"shall be given as soon as practicable but in no event later than thirty (30) days after the end of
applicable."
the Policy Period or Discovery Period, if The bolded, capitalized terms are
expressly defined by the Policy.
"Claim"
23. Under the Policy, the term is defined as follows:
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"Claim"
shall mean a civil, criminal, governmental, regulatory, administrative, or
arbitration made against Insured or non-
proceeding any seeking monetary
monetary relief and commenced by the service of a complaint or similar pleading,
the return of an indictment, or the receipt or the filing of a notice of charges or
similar document, including any proceeding initiated against any Insured before
(" EEOC"
the U.S. Equal Employment Opportunity Commission ("EEOC"), or any similar
governmental body, or other written demand for monetary or non-monetary relief
"Claim"
made against any Insured. However, in no event shall the term include
any labor or grievance proceeding which is subject to a collective bargaining

agreement.
Act"
24. A "Wrongful is "any actual or alleged act, omission, error, misstatement,
misleading statement, neglect or breach of duty . . . by any Insured Person in their capacity as
Company;"
such with the and "any actual or alleged act, omission, error, misstatement,
Company."
misleading statement, neglect or breach of duty . . . by the
"Company" Subsidiary,"
25. The is defined as BMGH "and any and "Insured
Person" Employees"
is defined as "Directors, Officers and of the Company.
"'Loss'
26. Under the Policy, shall mean compensatory damages (including back pay
and front pay), punitive or exemplary damages, the multiple portion of any multiplied damage
pre- Defense."
award, judgments, settlements, and post-judgment interest, and Costs of In turn,
Defense'
"'Costs of shall mean reasonable and necessary legal fees, costs and expenses incurred
Claim...." ."
in the investigation, defense or appeal of any Claim . . .
27. Thus, Ironshore is obligated to pay BMGH, its subsidiaries and its directors,
employees' "Loss"
officers and under the Policy, in excess of the Retention amount, up to a
$3,000,000 "aggregate limit of liability for all Claims made or deemed made during the Policy
Period." "settlements"
Such Loss may include of any Claim.
28. The Policy replaced a previous directors and officers insurance policy issued by
Ironshore, No. 001692001, with a policy period of June 6, 2014 to June 6, 2015 (the "2014/15
Policy"
Policy") which in all material respects contained identical policy wording.
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III. The September 4, 2014 Letter from Mr. Pai
29. On September 4, 2014, counsel for Mr. Pai (a former employee) wrote a letter to
two of the Blue Man Group's founders, Phillip Stanton and Chris Wink, and Blue Man Group
Letter"
Productions, LLC (hereinafter, the "Pai Letter").
with"
30. In the Pai Letter, Mr. Pai's counsel alleged that Mr. Pai had been "involved
success."
the Blue Man Group Show "virtually from its start and contributed greatly to its
"contributed"
31. The Pai Letter described alleged ways in which Mr. Pai to the Blue
"co-compos[ing]" "co-
Man Group Show in the early 1990s, including by allegedly music,
show," direction," "costuming,"

writing parts of the providing "stage "building and painting
sets," 1991,"
and other artistic contributions. The Letter noted that "[b]eginning in late and for
show."
an unspecified period, Mr. Pai was "paid for his appearances as a performer in every
32. The Pai Letter further stated, "[f]or many years, Mr. Pai has accepted royalty
payments (and some minimal flat fees) related to Blue Man Group performances without
clarified,"
complaint, even though the precise basis has never been and that now, Mr. Pai "would
like to set a fixed entitlement to royalties that is commensurate with the investment Mr. Pai has
arrears."
made in Blue Man Group, and payment of
33. The Pai Letter did not state a legal basis for entitlement to royalties other than
partner"
through Mr. Pai's alleged "contributions as an early collaborator and in the early 1990s.
In particular, the Letter did not make any mention of a prior agreement to pay royalties, quantum
meruit, unjust enrichment, breach of fiduciary duty, or representations by the Blue Man Group
concerning the payment of royalties.
IV. Mr. Pai's 2016 Lawsuit Against the Blue Man Group
34. Over a year later, on May 12, 2016, Mr. Pai filed a Complaint in the Pai Action
against BMGH, Messrs. Goldman, Stanton and Wink, and certain subsidiaries of BMGH,
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specifically Blue Man Group Publishing, LLC, Blue Man Productions, LLC, Blue Man Vegas
LLC, Blue Man Boston Limited Partnership, Blue Man Chicago Limited Partnership, Blue Man
International, LLC, Blue Man Touring, LLC, Astor Show Productions, LLC and Zebra Horse,
Subsidiaries,"
LLC (the "BMG with BMGH and Messrs. Goldman, Stanton and Wink,
Defendants"
collectively referred to herein as the "Blue Man Group Defendants") in Supreme Court of the
State of New York, County of New York, in an action titled Pai v. Blue Man Group Publishing,
LLC, et al., Index No. 650427/2016 (Sup. Ct. N.Y. Cnty.). The Honorable Barry R. Ostrager,
J.S.C. was ultimately assigned to the case.
35. The Complaint alleged seven causes of action against the Blue Man Group
Agreement,"
Defendants for (1) breach of fiduciary duty, (2) breach of a "Music Director (3) an
accounting, (4) quantum meruit, (5) unjust enrichment, (6) fraud, and (7) breach of a
Agreement."
"Songwriter's
36. The Complaint alleged wholly new and distinct (even contradictory) facts, as
compared to the Pai Letter.
V. Plaintiff Notifies Ironshore of the Pai Action
37. On July 12, 2016, counsel for the Blue Man Group Defendants notified Ironshore
of the Pai Action as a covered Claim under the Policy.
"Claim"
38. The Pai Action as filed constituted a under the Policy, as it was a "civil .
. . proceeding made against any Insured seeking monetary or non-monetary relief and
pleading...." ."
commenced by the service of a complaint or similar pleading . . .
Act[s]"
39. In particular, the Pai Action constituted "Wrongful alleged against
BMGH directly (the named Insured under the Policy) as well as corporate subsidiaries of BMGH
and Messrs. Goldman, Stanton and Wink (directors, officers and employees of the Insured).
40. Moreover, no exclusion to coverage applied to the Pai Action.
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41. Therefore, Ironshore was obligated to meet all coverage obligations under the
Policy with respect to the Pai Action, including indemnifying the Blue Man Group Defendants
for any settlements or judgments.
VL Ironshore's Initial Denial of Coverage for the Pai Action
42. On August 11, 2016, York Pro wrote a letter to counsel for Plaintiff, denying the
Blue Man Group Defendants coverage. Ironshore had retained York Pro to manage the claim,
which was assigned a Claim Number by Ironshore of IRHO-3003.
43. In its August 11, 2016 letter, York Pro provided only one basis for denying
Defendants'
coverage for the Blue Man Group claim: that the Pai Letter and the Pai Action
"constitute a single Claim against the Insured because they arise out of the same alleged
Wrongful acts or Related Wrongful Acts-theâ€” misrepresentations recently uncovered
concerning the Insured's calculation and payment of royalties to the claimant. Therefore,
pursuant to Section V.C. of the Policy, this Claim is deemed to have been made against the
Insured on the earliest date on which such Claim was made, September 4, 2014, the date of the
Letter]."
[Pai York Pro argued that the Claim therefore pre-dated the Policy Period beginning on
September 1, 2015.
44. In a letter dated October 6, 2016, Ironshore reaffirmed York Pro's position as
"Claim"
stated in the August 11, 2016 letter. Ironshore argued that the Pai Letter was a as
"Claim"
defined by the Policy. According to Ironshore, the Policy provides that a may be a
proceeding,"
"civil, criminal, governmental, regulatory, administrative, or arbitration or any
Insured."
"other written demand for monetary or non-monetary relief made against any
demand."
Ironshore therefore contended that the Pai Letter was such an "other written
45. Ironshore further asserted that the Complaint in the Pai Action was deemed a
Claim first made on September 4, 2014, the date of the Pai Letter, under Section V.C. of the
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Policy. Section V.C. provides:
More than one Claim involving the same Wrongful Act or Related Wrongful Acts
of one or more Insureds shall be considered a single Claim, and only one
Retention shall be applicable to such single Claim. All such Claims constituting a
single Claim shall be deemed to have been made on the earlier of the following
dates: (1) the earliest date on which any such Claim was first made; or (2) the
earliest date on which any such Wrongful Act or Related Wrongful Acts were
reported under this Policy or any other policy providing similar coverage.
46. According to Ironshore, "[t]he Wrongful Acts set forth in the letter are the same
Complaint,"
as those set forth in the and "[w]hile the Complaint hones the allegations into
specific legal causes of action, the story is the same: the Complaint contends plaintiff has only
been paid a fraction of the value of his contributions and defendants failed to even pay him
contractually owed royalties as Music Director . . . . The Complaint is clearly the same Claim as
Letter."
the Claim first made in the September 4, 2014 Ironshore further contended that the Pai
facts."
Letter and the Complaint "involve, at a minimum a common nexus of
47. Ironshore thus concluded that the Pai Letter and Pai Action constituted a single
Claim made on September 4, 2014 that should have been reported under the previous insurance
policy issued by Ironshore (the 2014/15 Policy), which had a policy period of June 6, 2014 to
June 6, 2015.
VIL Ironshore's Obligation to Provide Coverage for the Pai Action
48. On October 26, 2016, Plaintiff wrote a letter to Ironshore explaining why the Pai
Action had been timely reported as a Claim under the Policy, and why Ironshore was obligated
to cover it.
49. Plaintiff informed Ironshore that its coverage position was incorrect for at least
four independent reasons. First, Section V.C. of the Policy in no way permits Ironshore to avoid
a coverage obligation by relating one Claim to another. Rather, Section V.C. is one of three
distinct relation-back provisions in the Policy, each of which expressly favors and protects the
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Insured's right to coverage, not the Insurer's ability to avoid coverage or to insist that the Insured
"Related"
pay multiple Retentions. Second, the Pai Complaint is not to the Pai Letter within the
"Claim,"
meaning of the Policy. Third, the Pai Letter cannot be a which must be a formal
"Claim"
proceeding within the definition of the Policy, and fourth, the Pai Letter is not a because
"demand"
it is not a under a claim of right.
VIII. Ironshore's Decision to Cover 70% of the

Defendants'
Blue Man Group Costs of Defense
50. Ironshore ultimately reconsidered its blanket coverage denial with respect to costs
of defense. On or about March 10, 2017 Ironshore entered into a Funding Agreement with
BMGH, the BMG Subsidiaries and Messrs. Goldman, Stanton and Wink (the "Funding
Agreement" Defendants'
Agreement") whereby Ironshore agreed to cover 70% of the Blue Man Group costs
of defense for the Pai Action. Ironshore, however, reserved its rights with respect to any
obligation to indemnify the Blue Man Group Defendants for any settlement or judgment in the
Pai Action.
51. As of the date of the filing of this Complaint, Ironshore has paid approximately
$400,000 under the Funding Agreement and owes additional amounts for pre-trial, trial-related
and post-trial costs of defense.
IX. Ironshore's Wrongful Denial of Indemnity Coverage on Entirely New

Grounds and Failure to Participate Meaningfully in Settlement Discussions
52. In January of 2018, with discovery complete, Plaintiff requested Ironshore's
contribution to a potential settlement with Mr. Pai. In response, on January 9, 2018, with more
than $2,000,000 remaining of the $3,000,000 limits, Ironshore agreed to contribute only
$350,000 towards settlement on the ground that this amount appeared to be within what it had
budgeted for costs of defense. Ironshore refused to contribute any further amounts, stating that it
did not believe that it had "any indemnity obligation for this matter, and that its contribution to a
11
12 of 17
avoidance."
settlement would be limited to defense cost
53. Nearly a year and a half after sending its original disclaimer of coverage,
Ironshore asserted two brand new reasons for denying indemnity coverage to the Blue Man
Group Defendants.
54. First, Ironshore claimed that the claims in the Pai Action were excluded under the
Policy's Contractual Liability Exclusion. But as set forth in more detail below, Plaintiff's
complaint asserted non-contractual claims for quantum meruit and unjust enrichment that the
trial court allowed to proceed to trial. Accordingly, the Contractual Liability Exclusion on its
face does not apply to those claims.
55. Second, Ironshore claimed that Mr. Pai's damages claims were for disgorgement,
"uninsurable"
and were thus as a matter of New York law. Ironshore cited to a Policy provision
that excludes from the definition of Loss "matters which may be deemed uninsurable under the
construed."
law pursuant to which this Policy shall be Ironshore argued that Mr. Pai's claim was
"disgorgement,"
uninsurable under New York law as because "[t]he basic premise of the
p."
damages theory is that [Blue Man Group] received services valued at x, but only paid plaintiff
Mr. Pai was thus, under Ironshore's analysis, "seek[ing] to force [Blue Man Group] to disgorge
received."
the amount it should have paid, but did not pay, for the value of the services it
Plaintiff pointed out that Mr. Pai was seeking monetary damages that he claimed the Blue Man
Group had retained, not disgorgement of monies the Blue Man Group had illegally obtained
from Mr. Pai, and provided Ironshore with caselaw on that topic that Ironshore has not
distinguished to this day.
56. The Blue Man Group Defendants were unable to settle the case in January of
2018 given Ironshore's paltry contribution.
Defendants'
57. On March 16, 2018, Justice Ostrager ruled on the Blue Man Group
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motion for summary judgment. Although Justice Ostrager dismissed certain claims outright, he
allowed three of Mr. Pai's claims to proceed to trial: (i) breach of oral contract; (ii) quantum
meruit; and (iii) unjust enrichment.
58. Plaintiff contacted Ironshore again on or about March 19, 2018, requesting
authority of up to $2,000,000 to settle the case, 70% of which ($1,400,000) they sought from
Ironshore.
59. On or about March 22, 2018, March 23, 2018, Ironshore flatly refused Plaintiff's
request.
60. On or about March 26, 2018, Plaintiff informed Ironshore that the trial in the Pai
Action was scheduled to begin on April 6, 2018.
61. On or about March 29, 2018, Plaintiff informed Ironshore that very active
settlement discussions were underway.
62. On or about March 30, 2018, Plaintiff informed Ironshore that the trial was one
week away and that Justice Ostrager had set a settlement conference for April 3, 2018. With a
little more than a week to go before trial, Ironshore actually lowered the amount it was offering
from $350,000 to $280,000.
63. On the eve of trial, Ironshore increased its contribution towards settlement to
$500,000.
64. Trial commenced before Justice Ostrager on April 9, 2018. Unbeknownst to
Plaintiff, Ironshore posted a secret observer at the trial who, upon information and belief,
provided Ironshore with contemporaneous information regarding jury selection, witness
testimony and other aspects of the trial.
65. On April 10, 2018, Plaintiff informed Ironshore that Plaintiff had received a new
settlement demand from Mr. Pai. Plaintiff again informed Ironshore that if Ironshore contributed
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the remaining value of the Policy, or potentially even something less than that, Plaintiff would be
able to make up the difference and to accept Mr. Pai's demand. Plaintiff requested that Ironshore
tender the policy limits. Ironshore refused.
66. On April 12, 2018, following witness testimony including from Mr. Pai himself,
the Blue Man Group Defendants settled with Mr. Pai. The settlement was for an amount greater
than the Policy limits of $3,000,000. Plaintiff requested that Ironshore pay the remaining value
of the Policy as indemnification for the settlement amount. Ironshore refused.
FIRST CAUSE OF ACTION

(BREACH OF CONTRACT)
67. Plaintiff incorporates by reference each of the preceding paragraphs as if fully set
forth herein.
68. Plaintiff has performed its obligations under the Policy, including payment of all
premiums due and by timely notifying Ironshore of a covered Claim under the Policy.
69. Ironshore breached the Policy by disclaiming its obligation to provide indemnity
coverage under the Policy for the settlement in the Pai Action.
70. Plaintiff and Ironshore have communicated at length regarding their positions and
Ironshore's breach. This includes letters and/or emails from Plaintiff's counsel on July 12, 2016,
September 19, 2016, September 28, 2016, October 26, 2016, November 9, 2016, and November
23, 2016, January 9, 2018, March 20, 2018, March 22, 2018, March 23, 2018, March 26, 2018,
March 27, 2018, March 29, 2018, April 4, 2018, April 5, 2018, April 6, 2018, April 9, 2018,
April 10, 2018, April 11, 2018 and April 12, 2018 in addition to dozens of telephone calls.
Representatives of Ironshore have written to Plaintiff's counsel concerning the coverage issues
on August 11, 2016 and October, 6, 2016, January 9, 2018, March 23, 2018, March 26, 2018,
March 29, 2018, April 2, 2018, April 5, 2018 and April 12, 2018 but Ironshore has consistently
refused to meet its coverage obligations in full and has failed to respond to Plaintiff's substantive
15 of 17
arguments.
71. As a proximate and direct result of said breach, Plaintiff has been damaged and is
owed the amount of its Loss under the Policy arising from the Pai Action up to the remaining
limit of the Policy, which is approximately $2,000,000 after all defense costs have been paid by
Ironshore as required by the Funding Agreement Ironshore signed.
SECOND CAUSE OF ACTION

(DECLARATORY JUDGMENT)
72. Plaintiff incorporates by reference each of the preceding paragraphs as if fully set
forth herein.
73. Plaintiff is legally obligated to pay the settlement in the Pai Action.
74. An actual controversy now exists between Plaintiff and Ironshore, concerning
whether Ironshore is obligated to provide Plaintiff with indemnity coverage for the settlement of
the Pai Action as alleged in this Complaint.
75. The clear language of the Policy provides that the Pai Action is a covered Claim
under the Policy and that Ironshore is obligated to indemnify Plaintiff for any settlement.
76. Ironshore's stated reasons for refusing coverage of the Pai Action are not
supported by and contravene the express language of the Policy.
77. Plaintiff therefore seeks a declaration of its rights under the Policy, and
specifically a declaration that Ironshore is obligated to indemnify Plaintiff for the settlement of
the Pai Action up to the limits of liability of the Policy.
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PRAYER FOR RELIEF
WHEREFORE, plaintiff Blue Man Group Holdings, LLC demands Judgment in its favor
and against Defendant:
a. Awarding Plaintiff compensatory damages in an amount to be determined at
trial;
b. Plaintiff pre- and post-judgment

Awarding interest;
c. Declaring that Ironshore is obligated to indemnify Plaintiff for the settlement
of the Pai Action up to the limits of liability of the Policy;
d. Awarding Plaintiff its disbursements, costs and expenses, including
attorneys'
reasonable fees; and
e. Awarding Plaintiff other and further relief as the Court deems just and proper.
Dated: New York, New York

April 20, 2018
VENABLE LLP
/s/ Patrick J. Boyle
Jessie F. Beeber
Patrick J. Boyle
Counsel for Plaintiff Blue Man Group
Holdings, LLC
Rockefeller Center
1270 Avenue of the Americas

The Twenty-Fourth Floor
New York, NY 10020
(212) 307-5500
(212) 307-5598 (fax)

jbeeber@venable.com
pboyle@venable.com
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Blue Man Group Holding V Ironshore Indemnity

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FILED: NEW YORK COUNTY CLERK 04/20/2018 11:36 AM INDEX NO.

SUPREME COURT OF THE STATE OF NEW YORK

BLUE MAN GROUP HOLDINGS, LLC,

IRONSHORE INDEMNITY, INC.,

TO: Ironshore Indemnity, Inc.

Dated: New York, New York

By: /s/ Patrick J. Boyle

1270 Avenue of the Americas, 24th Floor

New York, New York 10020

Attorneys for Plaintiff Blue Man Group Holdings, LLC

SUPREME COURT OF THE STATE OF NEW YORK

BLUE MAN GROUP HOLDINGS, LLC,

--against-- Index No.

IRONSHORE INDEMNITY INC.,

NATURE OF THE DISPUTE

1. This insurance coverage dispute arises out of Ironshore's refusal to indemnify

reached with Mr. Pai.

limits of the Policy.

period of the Policy.

6. Ironshore thereafter executed a funding agreement with Plaintiff by which it

requested Ironshore's contribution to a potential settlement with Mr. Pai. In response, on

in the Pai Action and potential settlement opportunities.

Action could not settle the case with Mr. Pai.

JURISDICTION AND VENUE

and/or CPLR § 302.

located in New York.

17. Upon information and belief, among other things, Ironshore:

a. is qualified to do business in New York;

b. maintains an office in New York for the purpose of conducting business

with citizens of New York; and

insurance policies placed in New York.

Defendant reside in this County.

I. The Blue Man Group

and technology. The members of the Blue Man â€”

Stanton and Chris â€”

35 million people worldwide and is a world-renowned global entertainment phenomenon.

II. The Policy Issued by Ironshore to BMGH

21. BMGH is the named Insured on the Policy.

expressly defined by the Policy.

any labor or grievance proceeding which is subject to a collective bargaining

III. The September 4, 2014 Letter from Mr. Pai

show," direction," "costuming,"

concerning the payment of royalties.

J.S.C. was ultimately assigned to the case.

compared to the Pai Letter.

V. Plaintiff Notifies Ironshore of the Pai Action

of the Pai Action as a covered Claim under the Policy.

40. Moreover, no exclusion to coverage applied to the Pai Action.

for any settlements or judgments.

VL Ironshore's Initial Denial of Coverage for the Pai Action

which was assigned a Claim Number by Ironshore of IRHO-3003.

Wrongful acts or Related Wrongful Acts-theâ€” misrepresentations recently uncovered

Policy. Section V.C. provides:

VIL Ironshore's Obligation to Provide Coverage for the Pai Action

VIII. Ironshore's Decision to Cover 70% of the

and post-trial costs of defense.

IX. Ironshore's Wrongful Denial of Indemnity Coverage on Entirely New

52. In January of 2018, with discovery complete, Plaintiff requested Ironshore's

face does not apply to those claims.

distinguished to this day.

2018 given Ironshore's paltry contribution.

meruit; and (iii) unjust enrichment.

Action was scheduled to begin on April 6, 2018.