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About a year into the litigation between American International Group and startup Dellwood Insurance Group, a federal judge will allow much of ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s lawsuit to proceed against its newest potential competitor in the excess and surplus market.

Judge Evelyn Padin in U.S. District Court for the District of New Jersey ruled ÌìÃÀÍøÕ¾´«Ã½´«Ã½ can amend its complaint and go ahead with allegations of misappropriation of trade secrets and unfair competition by Dellwood.

Padin dismissed with prejudice ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s allegations of tortious interference, aiding and abetting breach of fiduciary duty, and computer fraud abuse.

On the matter of taking trade secrets, ÌìÃÀÍøÕ¾´«Ã½´«Ã½ can proceed with claims that former employee Thomas Connolly – now with Dellwood as chief financial officer – acted as a “double agent” for Dellwood while still employed with ÌìÃÀÍøÕ¾´«Ã½´«Ã½.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ has alleged Connolly emailed himself information related to ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s E&S business plans, pricing, and strategy.

Padin said courts within the district “routinely find that the types of information alleged to have been taken by Connolly to Dellwood constitute trade secrets.” She further ruled the information alleged to have been taken has independent economic value.

Connolly as well as former ÌìÃÀÍøÕ¾´«Ã½´«Ã½ executives Michael Price and Kean Driscoll were originally named in a lawsuit filed against Dellwood in April 2024 – about a month after New Jersey-based Dellwood was launched. Price was ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s CEO of North America General Insurance before leaving the company at the end of June 2023. Driscoll was ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s global chief underwriting officer of General Insurance. Driscoll and Connolly left ÌìÃÀÍøÕ¾´«Ã½´«Ã½ in March 2024.

Price and Driscoll are now CEO and CUO, respectively, of Dellwood.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ later dropped the three executives from the lawsuit, but continued its claims against Dellwood, which then filed a motion to dismiss the case based on the res judicata doctrine. Dellwood asserted the lawsuit couldn’t go on because ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s allegations against it included similar allegations against the individual executives who had been dropped from the case.

However, Padin in this latest ruling said the doctrine is almost always applied to subsequent lawsuits based on a final judgement from an earlier suit.

“To the extent there are situations where res judicata may apply within the same case, this is not one of them,” Padin said. The use of the doctrine, she continued, is not for “a game of ‘gotcha’ for parties to try and escape claims based on voluntary dismissals of other defendants.”

The case is American International Group Inc. v. Dellwood Insurance Group, U.S. District Court, District of New Jersey, No. 24-04456.

Topics Fraud ÌìÃÀÍøÕ¾´«Ã½´«Ã½