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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: ________________________ 

WESCO INSURANCE COMPANY, 

a Delaware Corporation, 

 Plaintiff, 

v. 

IRA FINANCIAL GROUP, LLC, a Florida 

Limited Liability Company; and IRA 

FINANCIAL TRUST COMPANY, a South 

Dakota Corporation, 

 Defendants.

______________________________________/ 

COMPLAINT FOR DECLARATORY JUDGMENT

Plaintiff, WESCO INSURANCE COMPANY (“Plaintiff” or “Wesco”), by and through its 

undersigned counsel, hereby files this Complaint for Declaratory Judgment against Defendants, 

IRA FINANCIAL GROUP, LLC (“IRA Group”) and IRA FINANCIAL TRUST COMPANY 

(“IRA Trust”) (collectively, “IRA” or the “Defendants”), and states as follows:

NATURE OF THE ACTION

In this action, brought pursuant to 28 U.S.C. §§ 2201 and 2202 and Rule 57 of the Federal 

Rules of Civil Procedure, Wesco seeks a declaration of its rights and obligations under a policy of 

insurance Wesco issued to IRA in connection with the following: (i) a lawsuit brought by 

MARSHALL GRIFFIN (“Griffin”) against IRA Trust and GEMINI TRUST COMPANY, LLC 

(“Gemini”), which was filed in the United States District Court for the Northern District of 

California, and captioned Griffin v. Gemini Trust Company, LLC, et al., Case No: 3:22-cv-01747-

CRB (the “Griffin Lawsuit”); (ii) numerous Arbitration Demands brought by more than 100 

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individual claimants1 against IRA, Gemini, and/or Adam Bergman, which were filed before the 

American Arbitration Association (“AAA”) and Judicial Arbitration and Mediation Services 

(“JAMS”) (collectively, the “Arbitration Demands”); and (iii) numerous other claims, demands, 

and complaints submitted by Gemini and various IRA customers (collectively, the “Customer 

Demands”). The persons and/or entities who filed or submitted arbitration claims or other claims, 

demands, or complaints, shall collectively be referred to as the “Claimants”. The “Griffin 

Lawsuit,” the “Arbitration Demands,” and the “Customer Demands” shall collectively be referred 

to as the “Claims”. A copy of the Complaint filed in the Griffin Lawsuit is attached hereto as 

Exhibit “1”. A copy of the Arbitration Demand submitted to the AAA is attached hereto as 

Exhibit “2”. Copies of the Arbitration Demands submitted to JAMS are attached hereto as 

Composite Exhibit “3”. Copies of the Customer Demands are attached hereto as Composite 

Exhibit “4”.

1 The arbitration claimants are Judy Halaby; David Seki, IRA; Philip E. Miller Traditional IRA; 

Philip E. Miller Roth IRA; Ahuva Stadtlander Traditional IRA; Brian Salvucci, IRA; Graciela 

Gomez-Stahl Traditional IRA; Harpreet Saini Traditional IRA; Michael McClellan Roth IRA; 

Kunal Patel; Bhavita Patel; Pramod Patel; Daxobahen Patel; Rhett Daniel IRA; Mark Moniz, IRA; 

Eric Sztanyo; Esther Bejar; John Tarantino; Justin Good; Phillip Tasto; Lonnie Ogulnick; Jason 

Furbert; Nilofer Kreonidis; David Benham; Gary Lemons; Donald Benningfield; Heather Hurd; 

Jason Hurd; Bryan Allen; Eric Koziel; Daniel Guth; Diane Guth; Chris Carden; Robert (Corey) 

Hill; Jason Hosey; Kenneth Teter; Leah Decosta; Donn Murakami; Branon White; Jennifer 

Hansen; Mary Jammet; Thomas Lambro; Donald J. Hardwood; Nathaniel Dixon; Jacinto Cua, Jr,; 

Scott Kortright; Michael Abrahamsen; Singar Balasubramanian; Lauren Camara; Jennifer Oeltjen; 

Mia Shanholtzer; Tom Cui; Daniela de Waal; Yvette Benson; Chad Marlow; Jason Loik; Graham 

Miller; Tobias Falzone; Robert Scot Hastings; Marc Selter; Magdalina Fridman (representing 

Laura Harris); Bernard Barton; Helio Carrilho; Ping Yee; Jay Kim; Shane Campbell; Dan Waltz; 

Michael Kevin Cozzi; Jeffrey Anderson; Joseph O’Halloran; Eric Seward; Charles Holmgreen; 

Alicia Hendrix; Josue Brainin; Brian May; Gregory Thompson; Timothy Thomas; Judie Boxill; 

Thomas Cordano; Rebecca Nguyen; Clint Bogue; George Marcus Sherwin; Marina Sherwin; 

Rebecca Hutchinson; Ruchi Shah; David Ruest; Lisa Ruest; Scott Smith; Roosevelt Cooper; 

Ching-Kang Chen; Matthew Stasium; Jordan Dialectos; Sean Orelli; David Tsuei; Benjamin 

Krzyzewski; Jessica Chervin; Perry Batchelor; Wayne Worthington; Nellie Aguilar-Miller; Craig 

Kornick; Gary Tolson; Ann Marie Bugler; Gary Mattox; Glynn Shaw; Yelena Shmidt; Sameer 

Halai; and Ryan Iseman. 

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1. Wesco seeks a declaration that: (a) it does not owe a duty to advance and/or 

reimburse defense costs to IRA in connection with the Claims; and (b) it does not owe a duty to 

indemnify IRA for any damages awarded or judgments entered in connection with the Claims. 

2. As discussed herein, the Claims seek to recover damages for IRA’s alleged failure 

to use reasonable measures and comply with applicable industry standards to protect the private 

information and assets of Griffin, the Claimants, and others similarly situated. 

3. This insurance coverage action is brought to determine the rights and obligations 

of the parties in connection with a Financial Institution Insurance Policy issued by Wesco to IRA

Group, bearing policy number WDO1809368 02 for the policy period effective from March 3, 

2021 to March 3, 2022 (the “Policy”). IRA Trust is listed as an Insured per the Policy’s Additional 

Insured Endorsement (Form PL990221 0414). A true and correct copy of the Policy is attached 

hereto as Exhibit “5”. An actual and justiciable controversy exists with respect to the Policy.

THE PARTIES

4. Plaintiff, Wesco, is a business entity organized under the laws of the State of 

Delaware with its principal place of business in the State of New York. Wesco is authorized to 

conduct business throughout the State of Florida. Wesco is therefore a citizen of Delaware and 

New York for purposes of diversity jurisdiction and is otherwise sui juris. 

5. Defendant, IRA Group, is a Florida Limited Liability Company organized and 

existing under the laws of the State of Florida with its principal place of business in Miami-Dade 

County, Florida. IRA Group has one member, Adam Bergman, who is a citizen of Miami-Dade 

County, Florida. IRA Group is therefore a citizen of Florida and is otherwise sui juris. 

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6. Defendant, IRA Trust, is a business entity organized under the laws of the State of 

South Dakota with its principal place of business in the State of South Dakota. IRA Trust is 

therefore a citizen of South Dakota and is otherwise sui juris. 

JURISDICTION AND VENUE

7. This Court has subject matter jurisdiction over this matter based on diversity of 

citizenship pursuant to 28 U.S.C. §§ 1332(a)(1) and 1332(c)(1) because there is complete diversity 

of citizenship between the Plaintiff and the Defendants, and the amount in controversy exceeds 

$75,000 exclusive of interest and costs. 

8. This Court has personal jurisdiction over the Defendants because the Defendants 

are either residents of, conduct substantial business in, or have sufficient minimum contacts with 

the State of Florida. 

9. Venue is proper in the United States District Court for the Southern District of 

Florida pursuant to 28 U.S.C. § 1391 because at least one (1) of the Defendants is domiciled in 

this District. 

10. Pursuant to Local Rule 3.1, this matter is properly instituted in the Miami Division 

of the Southern District of Florida, as the insurance policy that is the subject of this action was 

delivered to the Insureds in Miami-Dade County, Florida. 

THE CLAIMS

I. The Griffin Lawsuit

11. On or about March 18, 2022, Griffin, on behalf of himself and all others similarly 

situated (the “Class Members”), filed a Class Action Complaint in the Griffin Lawsuit (the “Griffin

Complaint”) against IRA Trust and Gemini in the United States District Court for the Northern 

District of California, bearing case number 3:22-cv-01747-CRB. 

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12. The Griffin Lawsuit stems from “a data breach class action brought on behalf of 

consumers whose retirement savings were stolen by cybercriminals in a massive cyber-attack at 

IRA [Trust] – one of a handful of firms that runs certain of its retirement account services through 

Gemini (a leading cryptocurrency exchange) – in or around February 2022 (the “Data Breach”).”

Ex. 1 at ¶ 1 (emphasis in original). 

13. According to the Griffin Complaint, “[t]he Data Breach reportedly resulted in at 

least $36 million in crypto currency stolen from Class Members’ individual retirement accounts 

(“IRAs”), including [Griffin] who lost 2 Bitcoins worth approximately $85,000.” Id. 

14. The Griffin Complaint alleges that IRA Trust and Gemini failed to use reasonable 

measures to protect private information and/or monies in their possession, including those of 

Griffin and the putative Class Members, and did not comply with applicable industry standards. 

Id. at ¶¶ 5, 77-80. 

15. The Griffin Complaint further contends that “[a]s a result of the Data Breach, 

[Griffin] and Class Members suffered ascertainable losses in the form of actual monies, loss of the 

benefit of their contractual bargain, out-of-pocket expenses and the value of their time reasonably 

incurred to remedy or mitigate the effects of the attack,” as well as damages associated with the 

loss and/or compromise of their private information. Id. at ¶¶ 3, 81, 111-120. 

16. The Griffin Complaint asserts the following causes of action on behalf of Griffin 

and the putative Class Members: (1) Negligence; (2) Negligence Per Se; and (3) Breach of Implied 

Contract. Id. at ¶¶ 147-178. 

17. The Griffin Complaint demands judgment against IRA Trust and Gemini and seeks 

the following relief:

a. An order certifying the Class as defined [in the Griffin Lawsuit], and 

appointing [Griffin] and [his] counsel to represent the Class; 

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b. An order enjoining [IRA Trust and Gemini] from engaging in the wrongful 

conduct alleged [in the Griffin Lawsuit] concerning disclosure and 

inadequate protection of the [personally identifiable information] belonging 

to [Griffin] and Class Members; 

c. An order requiring [IRA Trust and Gemini] to: 

i. Engage third-party security auditors/penetration testers as well as 

internal security personnel to conduct testing, including simulated 

attacks, penetration tests, and audits on [IRA Trust and Gemini’s] 

systems on a periodic basis, and ordering [IRA Trust and Gemini] 

to promptly correct any problems or issues detected by such thirdparty security auditors; 

ii. Engage third-party security auditors and internal personnel to run 

automated security monitoring; 

iii. Audit, test, and train their security personnel regarding any new or 

modified procedures; 

iv. Segment their user applications by, among other things, creating 

firewalls and access controls so that if one area is compromised, 

hackers cannot gain access to other portions of [IRA Trust and 

Gemini’s] systems; 

v. Conduct regular database scanning and security checks; 

vi. Routinely and continually conduct internal training and education to 

inform internal security personnel how to identify and contain a 

breach when it occurs and what to do in response to a breach; 

vii. Purchase credit monitoring services for [Griffin] and Class 

Members for a period of ten years; and 

viii. Meaningfully educate [Griffin] and Class Members about the threats 

they face as a result of the loss of their private information to third 

parties, as well as the steps they must take to protect themselves. 

d. An award of compensatory, statutory, and nominal damages in an amount 

to be determined at trial; 

e. An order instructing [IRA Trust and Gemini] to purchase or provide funds 

for credit monitoring services for [Griffin] and all Class Members; 

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f. An award for equitable relief requiring restitution and disgorgement of the 

revenues wrongfully retained as a result of [IRA Trust and Gemini’s] 

wrongful conduct; 

g. An award of reasonable attorneys’ fees, costs, and litigation expenses, as 

allowable by law; and 

h. Such other and further relief as this Court may deem just and proper. 

Id. at pp. 40-41, at “Wherefore” Clause. 

18. Griffin’s claim was tendered to Wesco by IRA for advancement and/or 

reimbursement of defense costs and indemnity. 

19. Upon receipt of notice of the Griffin Lawsuit, Wesco conducted a timely coverage 

investigation with regard to the Griffin Lawsuit and issued a Reservation of Rights, including the 

right to file a declaratory judgment at any time to determine its duties to advance and/or reimburse

defense costs, or provide indemnity in relation to the Griffin Lawsuit. 

20. On July 29, 2022, the District Court in the Griffin Lawsuit entered its Order 

Granting Gemini’s Motion to Compel Arbitration and to Stay Litigation and IRA Trust’s Motion 

to Dismiss for Improper Venue, or in the Alternative, to Transfer to South Dakota. In essence, the 

Court determined that there was a valid arbitration agreement warranting the arbitration of 

Griffin’s claims against Gemini, and further held that venue was improper in the Northern District 

of California as to Griffin’s claims against IRA. Accordingly, the Court dismissed Griffin’s claims 

against IRA, without prejudice, and granted Griffin leave to amend to attempt to overcome the 

pleading deficiencies regarding venue. 

21. Griffin was given thirty (30) days to file an amended complaint, but failed to do so. 

Therefore, on September 9, 2022, the District Court in the Griffin Lawsuit dismissed the Griffin

Complaint against IRA, with prejudice. 

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II. The Arbitration Demands

22. On or about June 21, 2022, Judy Halaby (“Halaby”) filed her Itemized Claims for 

Damages and Other Relief (the “Halaby Demand”) against IRA, Gemini, and Adam Bergman

(“Bergman”)2 before the AAA, bearing case number 01-22-0002-1412. 

23. According to the Halaby Demand, “[o]n February 8, 2022, 374 ETH [Ethereum]

was stolen from [Halaby’s] IRA account without her knowledge, . . . totaling an estimated market 

value of $1.2 million.” Ex. 2 at ¶¶ 25, 43. 

24. According to the Halaby Demand, Halaby “was not the only IRA Account holder 

whose cryptocurrency was stolen on February 8, 2022, as dozens of IRA Accounts were also 

drained of their cryptocurrency at the same time.” Id. at ¶ 45. 

25. The Halaby Demand alleges, inter alia, that IRA, Gemini, and Bergman made 

materially false misrepresentations to Halaby about their security practices and failed to adopt and 

maintain sufficient security measures and practices to protect and safeguard Halaby’s account and 

cryptocurrency. Id. at ¶¶ 62-63, 69-71. 

26. The Halaby Demand further contends that because of IRA, Gemini, and Bergman’s 

“negligent actions, omissions and false statements, [Halaby] has sustained significant damages.” 

Id. at ¶ 60. 

27. The Halaby Demand asserts the following causes of action: (1) Negligence; (2) 

Fraud; (3) Breach of Fiduciary Duty; (4) Breach of Implied Contract; (5) Breach of Express 

Contract; and (6) Violation of New York Consumer Protection from Deceptive Practices Act, NY 

Gen. Bus. § 349 (against Gemini only). Id. at ¶¶ 61-124. 

2 Upon information and belief, Adam Bergman is the founder and Chief Executive Officer of IRA 

Group and IRA Trust. 

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28. The Halaby Demand seeks an award in Halaby’s favor of 374 ETH (or the 

estimated cash value of $1.2 million); amounts sufficient to pay for the costs and fees to obtain a 

private letter of ruling from the Internal Revenue Service for the return of her property and for the 

taxes that will be realized upon the return of said property (or it cash value), plus interest; damages 

for future credit monitoring and insurance; as well as her attorneys’ fees and costs. Id. at p. 21, at 

“Prayer for Relief.”

29. In addition, between May 17, 2022 and October 18, 2022, a total of 107 claimants

(collectively, the “JAMS Claimants”) filed Demands for Arbitration against IRA Trust and Gemini 

before JAMS (the “JAMS Demands”)3

. 

30. According to the JAMS Demands, the JAMS Claimants were victims “of a data 

breach and hack that took place on February 8, 2022 during which hundreds of Investment 

Retirement Accounts held by IRA [Trust] and Gemini were infiltrated by cyber-criminals.” See 

generally, Comp. Ex. 3. 

31. According to the JAMS Demands, this hack resulted in the JAMS Claimants 

“losing a substantial portion [or majority] of [their life and/or retirement] savings,” with estimated 

cryptocurrency values ranging from $84,861 to $842,250. Id.

32. The JAMS Demands allege that while IRA Trust and Gemini continue to assign 

blame to one another4

, the JAMS Claimants’ stolen funds have yet to be recovered. Id.

3 A total of fourteen (14) Demands for Arbitration were filed on behalf of the 107 JAMS Claimants.

4 In fact, on June 6, 2022, IRA Trust filed a Complaint against Gemini in the United States District 

Court for the Southern District of New York, bearing case number 1:22-cv-04672-AT, wherein 

IRA Trust asserted causes of action for Fraud, Negligence, Gross Negligence, Contribution, 

Defamation, Tortious Interference, and Violation of New York’s Consumer Protection from 

Deceptive Practices Act against Gemini. IRA and Gemini have agreed to pursue their claims in 

arbitration. As such, the New York litigation is currently stayed pending arbitration. 

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33. The JAMS Demands further allege that IRA Trust and Gemini made “false and 

unrealistic expectations” about the security of their platforms and ultimately “lacked sufficient 

security procedures and failed to implement what procedures they had in order to ensure the safety 

of [the JAMS Claimants’] sacrosanct IRA[s].” Id.

34. The JAMS Demands assert various causes of action for: (1) Fraudulent Inducement; 

(2) Negligent Misrepresentation; (3) Fraudulent Misrepresentation; (4) Negligence; (5) Gross 

Negligence; (6) Violation of the Electronic Funds Transfer Act, 15 U.S.C. § 1693, et seq.; (7) 

Breach of Contract; (8) Breach of Implied Contract; (9) Breach of the Implied Covenant of Good 

Faith and Fair Dealing; (10) Breach of Fiduciary Duty; (11) Aiding and Abetting Fraud and Breach 

of Fiduciary Duty; (12) Breach of Bailment; (13) Unjust Enrichment; and (14) violations of various 

state-specific consumer protection laws5

 (where applicable). Id.

35. The JAMS Demands generally seek relief against IRA Trust and Gemini, jointly 

and severally, for compensatory damages; restitution and disgorgement of profits; an accounting;

an award of attorney’s fees, costs, and treble damages pursuant to the Electronic Funds Transfer 

Acts (and state-specific consumer protection laws, where applicable); exemplary and punitive 

damages, and all such other relief that is just and equitable. Id.

36. The Arbitration Demands were tendered to Wesco by IRA for advancement of 

defense costs and indemnity. 

37. Upon receipt of notice of the Arbitration Demands, Wesco conducted a timely 

coverage investigation with regard to the Arbitration Demands and issued a Reservation of Rights, 

5 This includes violations of the Texas Deceptive Trade Practices Act; New Jersey Consumer 

Fraud Act; Virginia Consumer Protection Law; Pennsylvania Unfair Trade Practices and 

Consumer Protection Law; New York Consumer Protection from Deceptive Practices Act; 

California Consumers Legal Remedies Act; California Unfair and Deceptive Trade Practices Act

and Unfair Competition Law; and Florida Securities Act. 

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including its right to file a declaratory judgment at any time to determine its duties to advance 

defense costs and/or provide indemnity in relation to the Arbitration Demands. 

38. As of the filing of this Complaint for Declaratory Judgment, and upon information 

and belief, the Arbitration Demands remain pending at various stages of their respective arbitration 

proceedings and no arbitration awards have yet been rendered. 

III. The Customer Demands

39. Between February 10, 2022 and April 27, 2022, Gemini, along with various IRA 

customers, submitted various written demands, claims, and/or complaints stemming from the 

February 8, 2022 network security incident6

. See Comp. Ex. 4. 

40. The Customer Demands generally allege that due to negligence and inadequate 

security, the customers’ accounts were compromised, resulting in erroneous and unauthorized 

transfers from their accounts up to $1.8 million. Id.

41. The Customer Demands generally seek, inter alia, investigation of the unauthorized 

activity, a return or replacement of their stolen cryptocurrency (or other recovery of their financial 

losses), and/or refunds of service fees charged by IRA. Id. 

42. The Customer Demands were tendered to Wesco by IRA for advancement of 

defense costs and indemnity. 

43. Upon receipt of notice of the Customer Demands, Wesco conducted a timely 

coverage investigation with regard to the Customer Demands and issued a Reservation of Rights, 

including its right to file a declaratory judgment at any time to determine its duties to advance 

defense costs and/or provide indemnity in relation to the Customer Demands. 

6 This includes several consumer complaints filed with local state consumer protection offices, 

including the New York Department of Financial Services and the South Dakota Department of 

Labor and Regulation – Division of Banking. 

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44. As of the filing of this Complaint for Declaratory Judgment, and upon information 

and belief, the Customer Demands (which include the local state consumer complaints) remain 

pending and have not yet been resolved. In fact, a number of the IRA customers who submitted 

demands, claims, or complaints, also subsequently filed Demands for Arbitration. 

THE INSURANCE POLICY

45. Wesco issued the Policy to IRA bearing policy number WDO1809368 02 for the 

policy period effective from March 3, 2021 to March 3, 2022. Ex. 5, Form PL-Fl-DEC 0414, at p. 

1. 

46. Subject to its terms, conditions, exclusions, and endorsements, the Policy is subject 

to a $5,000,000 Single Limit of Liability for the Policy’s Professional Liability Coverage Part and 

a $5,000,000 Policy Year Aggregate Limit of Liability, subject to a $25,000 per claim self-insured 

retention for Professional Services. Defense Expenses are part of, and not in addition to, the Limit 

of Liability. Id.

47. The Policy’s General Terms and Conditions Applicable to All Coverage Parts 

provide, in relevant part:

SECTION I – GENERAL INFORMATION

These General Terms and Conditions apply to all Coverage Parts made a part of 

this Policy. Unless otherwise stated to the contrary, the terms and conditions of 

each Coverage Part apply only to that particular Coverage Part. If any provision 

in these General Terms and Conditions is inconsistent or in conflict with the terms 

and conditions of any particular Coverage Part, the terms, conditions, and 

limitations for that particular Coverage Part shall apply. 

SECTION II – DEFINITIONS

Whenever appearing in this Policy, the following words and phrases appearing in 

bold type will have the meanings set forth below. 

... 

Defense Expenses means reasonable and necessary legal fees and expenses 

incurred by the Insurer or the Insured, with the Insurer’s consent, in the 

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investigation, defense, settlement and appeal of a Claim, including but not limited 

to, cost of expert consultants and witnesses, premiums for appeal, injunction, 

attachment or supersedeas bonds (without the obligation to furnish such bonds) 

regarding such Claim. Defense Expenses will not include the salaries, wages, 

benefits or overhead of, or paid to, any Insured or any Employee of such Insured. 

... 

Interrelated Wrongful Acts means Wrongful Acts which have as a common 

nexus any fact, circumstance, situation, event, transaction or series of related facts, 

circumstances, situations, events or transactions. 

... 

SECTION III – LIMIT OF LIABILITY AND RETENTION

A. LIMIT OF LIABILITY

1. The amount set forth in Item 3. of the Declarations Page is the maximum 

Policy Year Aggregate Limit of Liability of the Insurer for all Loss 

from all Claims under all purchased Coverage Parts, regardless of the 

number of Insureds, Claims made, or persons or entities bringing such 

Claims. The Single Limit of Liability and the Separate Limit of 

Liability on the Declarations Page are sub-limits of the Policy Year 

Aggregate Limit of Liability which further limits and does not increase 

the Insurer’s limit of liability.

 ... 

C. SINGLE LIMIT / RETENTION – Claims based upon or arising out of 

the same Wrongful Act or Interrelated Wrongful Acts committed by one 

or more Insureds shall be considered a single Claim, and only one 

Retention and Limit of Liability shall apply. Each such single Claim shall 

be deemed to be first made on the date the earliest of such Claims was first 

made, regardless of whether such date is before or during the Policy Period. 

 ... 

SECTION VI – DEFENSE OF CLAIMS, INSURED’S DUTIES AND

RESPONSIBILITIES, ALLOCATION, AND ARBITRATION

A. DEFENSE OF CLAIMS – The Insurer does not assume any duty-todefend a Claim. The Insured shall defend and contest any Claim made 

against them, provided that: 

1. the Insurer will have the right to participate with the Insured in the 

investigation, defense and settlement, including the negotiation of a 

settlement of any Claim that appears reasonably likely to be covered in 

whole or in part by such Coverage Part and the selection of appropriate 

defense counsel;

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2. the Insurer may establish and provide to counsel for the Insured 

guidelines for the handling of Claims covered under this Policy. As a 

condition of the Insurer's obligation to pay Defense Expenses, counsel 

for the Insured shall adhere to the guidelines provided by the Insurer 

in the defense of such Claims. The Insurer shall not be obligated to pay 

Defense Expenses that have been incurred without observance of the 

guidelines, or that otherwise are unreasonable; 

3. upon written request, the Insurer will advance Defense Expenses with 

respect to such Claim. Such advanced payments by the Insurer will be 

repaid to the Insurer by the Insureds severally according to their 

respective interests in the event and to the extent that the Insureds are 

not entitled to payment of such Defense Expenses. As a condition of any 

payment of Defense Expenses under this subsection, the Insurer may 

require a written undertaking on terms and conditions satisfactory to the 

Insurer guaranteeing the repayment of any Defense Expenses paid to or 

on behalf of any Insured if it is finally determined that any such Claim 

or portion of such Claim is not covered. 

B. INSURED’S DUTIES AND RESPONSIBILITIES – It shall be the duty 

and responsibility of the Insured, as a condition precedent to any coverage 

under this Policy: 

1. to grant to the Insurer the right to associate itself in defense and 

settlement of any Claim that appears reasonably likely to involve the 

Insurer; 

2. not to, except at personal cost, make any payment, admit any liability, 

settle any Claims, assume any obligation, or incur any expense without 

the Insurer's written consent, which consent shall not be unreasonably 

withheld; 

3. to assert all appropriate defenses and to take all steps in defense of any 

Claim made, including but not limited to, releasing to the Insurer all 

copies of reports, investigations, pleadings and other papers as soon as 

reasonably possible and to provide the Insurer with such information, 

assistance and cooperation as the Insurer may reasonably request to 

determine the existence or extent of the Insurer’s obligation; and 

4. to conduct all matters relative to any Claim or Potential Claim as if 

coverage under this Policy were not otherwise afforded, including but 

not limited to not admitting any liability for, settling any Claim, or 

incurring any Defense Expenses without the prior written consent of 

the Insurer, which consent shall not be unreasonably withheld. 

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Ex. 5, Form PL990158 0414, at pp. 1-6. 

48. The Policy’s Financial Institution Professional Liability Coverage Part provides, in 

relevant part:

SECTION I – INSURING AGREEMENTS

... 

B. PROFESSIONAL SERVICES LIABILITY – The Insurer will pay on 

behalf of the Insured, Loss resulting from a Claim first made during the 

Policy Period or extended Reporting Period (if exercised), by or on behalf 

of a customer of the Company for a Wrongful Professional Services Act. 

... 

SECTION II – DEFINITIONS

In addition to the Definitions set forth in General Terms and Conditions Applicable 

to All Insuring Agreements, the following Definitions apply to all Insuring 

Agreements contained herein. 

... 

Claim means:

1. a written demand for monetary damages or non-monetary relief;

2. a civil proceeding commenced by the service of a complaint or similar 

pleading; 

... 

against an Insured for a Wrongful Act including any appeal from such proceeding.

... 

Id. at Form PL990163 0414, at pp. 1-2. 

Computer System means any computer hardware, software, any components 

thereof, or other associated devices or equipment (including, but not limited to 

wireless and mobile devices), and are owned, operated, controlled, or leased by or 

on behalf of: 

1. the Insured; 

2. any third party from which the Insured receives services or products;

3. any third party to which the Insured provides services or products; or 

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4. any third party with which the Insured has a contractual relationship.

Data Holder means a third party: 

1. to which the Insured has provided Protected Information; or 

2. that has received Protected Information on behalf of the Insured. 

Id. at Form PL991178 1020, at p. 1. 

Loss means Defense Expenses and any amount the Insured is legally obligated to 

pay resulting from a Claim, including damages, judgments, settlements, punitive 

or exemplary damages or the multiple portion of any multiplied damage award (if 

insurable under the applicable law most favorable to the insurability of punitive, 

exemplary, or multiplied damages), prejudgment and post judgment interest, and 

legal fees and expenses awarded pursuant to a court order or judgment. Loss shall 

not include: 

1. payroll or other taxes; 

2. criminal or civil fines or penalties imposed by law; 

3. any unpaid, unrecoverable or outstanding amounts resulting from a loan, 

lease or extension of credit to any Borrower, including unpaid, 

unrecoverable our outstanding amounts resulting from a loan, lease or 

extension of credit which has been sold as a participation to other financial 

institutions;

4. costs to comply with any non-monetary or injunctive relief of any kind or 

any agreement to provide such relief, including but not limited to any 

damages, costs or expenses incurred in making an accommodation for any 

disabled person pursuant to the Americans with Disabilities Act or any 

similar federal, state or local laws, or in complying with any other federal, 

state or local laws of any kind; 

5. the depreciation (or failure to appreciate) in value of any investment 

product, including but not limited to securities, commodities, currencies, 

options or futures due to market fluctuation unrelated to any Wrongful Act; 

6. any restitution, disgorgement, or payment of similar payments including, 

but not limited to the return of fees, commissions or charges for the 

Company’s services; or

7. any matters which are uninsurable under the law pursuant to which this 

Policy shall be construed. 

Where the Company reasonably determines that punitive, exemplary or multiple 

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damages are insurable under the applicable law, the Insurer shall not challenge 

that interpretation of insurability.

Id. at Form PL990163 0414, at pp. 2-3. 

If Florida is the applicable jurisdiction, punitive and exemplary damages or the 

multiplied portion of any multiplied damage award are prohibited. 

All other provisions of the definition of Loss shall remain unchanged. 

Id. at Form PL990170FL 0414 (hereinafter, the “Florida Amendatory Endorsement”), at 

p. 2. 

Professional Services means only the services set forth in the Specified 

Professional Services Schedule below that the Insured performs or is required to 

perform for or on behalf of a customer of the Company pursuant to a written 

agreement between such customer and the Company or, with respect to Loan 

Servicing, pursuant to a written agreement between a third party and the Company; 

1. for a fee, commission or other monetary compensation; 

2. for no fee, commission or other monetary compensation, if a fee, 

commission, or other monetary compensation would usually be received by 

the Company for such services, but for business or other reasons is waived 

or not charged by the Company; or 

3. for other remuneration which inures to the benefit of the Company. 

Specified Professional Services Schedule: 

• _X_ IRA Consultant Services 

Id. at Form PL990219 0414, at p. 1. 

Protected Information means any information of others in an Insured's or a Data 

Holder's care, custody or control or for which an Insured or Data Holder is legally 

responsible, including, but not limited to: 

1. any non-public information that is protected under the Insured’s publicly 

available privacy policy (as amended);

2. information from which an individual may be uniquely and reliably 

identified or contacted, or which allows access to an individual’s financial, 

medical, or other records or accounts, including, but not limited to an 

individual's name, address, telephone number, social security number, 

account relationships, account numbers, account balances, account 

histories, usernames, authentication information, security information, 

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passwords, or biometric information; 

3. any information about an individual that is not publicly available, including, 

but not limited to videos, photographs, internet browsing history, customer 

proprietary network information (CPNI), and geolocation information; 

4. any information concerning an individual that is protected pursuant to any 

federal, state, local or foreign statute, law, rule, or regulation (as amended) 

intended to govern the correction, collection, retention, handling, control, 

disposal, processing, disclosure, sharing, sale, maintenance, acquisition, 

storage, access to, or use or misuse of personal, financial, medical or other 

sensitive information, including, but not limited to: 

a. Insurance Portability and Accountability Act of 1996 (as amended) 

(HIPAA) or the Health Information Technology for Economic and 

Clinical Health Act (HITECH Act) and their implementing 

regulations, or protected health-related information under any similar 

federal, state, local or foreign law;

b. the Gramm-Leach Bliley Act of 1999 and its implementing 

regulations, or protected personal information under any similar 

federal, state, local or foreign statute, law or regulation; 

c. the California Security Breach Notification Act (CA SB 1386) and 

Massachusetts 201 CMR 17; 

d. the Identity Theft Red Flags under the Fair and Accurate Credit 

Transactions Act of 2003; 

e. Fair Credit Reporting Act;

f. section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), 

but solely for alleged violations of unfair or deceptive acts or practices 

in or affecting commerce;

g. the Data Protection Act of 1998 or similar legislation to comply with 

the European Union Data Protection Directive 95/46/EC of 1995; or 

by the European Union General Data Protection Regulation (GDPR). 

h. New York Cybersecurity Regulation (23 NYCRR Part 500); 

i. the California Consumer Privacy Act of 2018; 

j. the Biometric Information Privacy Act; or

k. other federal, state, local or foreign statutes, laws, rules, or regulations 

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similar to those described above; 

5. any information that is not publicly available, and which is held under an 

obligation, agreement, or understanding of confidentiality; or 

6. intellectual property including, but not limited to patents, trade secrets, data, 

designs, interpretations, forecasts, formulas, methods, practices, processes, 

records, reports, ideas, expressions of ideas, or other item of information 

that is not available to the general public. 

Id. at Form PL991178 1020, at p. 2. 

Wrongful Act means:

... 

2. solely with respect to Insuring Agreement B., any actual or alleged 

Wrongful Professional Services Act... 

... 

Wrongful Professional Services Act means any actual or alleged act, error, 

omission, misstatement, misleading statement or breach of duty or neglect by any 

Insured in the rendering of, or failure to render Professional Services. Wrongful 

Professional Services Act does not include a Wrongful Lending Act or a 

Wrongful Trust Services Act.

... 

SECTION III – EXCLUSIONS

A. EXCLUSIONS APPLICABLE TO ALL INSURING AGREEMENTS

... 

Bonding/Insurance Company - The Insurer shall not be liable to pay any Loss 

in connection with any Claim made against any Insured brought directly or 

indirectly by or for the benefit of any insurance carrier or bond carrier of the 

Company, or any affiliate of the Company, regardless in whose name such Claim 

is actually made.

Id. at Form PL990163 0414, at pp. 4-5. 

Cyber Liability - The Insurer shall not be liable to pay any Loss in connection 

with any Claim made against any Insured arising from, based upon, or attributable 

to: 

1. theft, loss, disclosure, collection, storage, retention, inability to access, 

alteration or corruption of, or use or misuse of any Protected Information; 

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2. failure to report, respond to or disclose the theft, loss, disclosure, collection, 

storage, retention, inability to access, alteration or corruption of, or use or 

misuse of any Protected Information; 

3. violation of any federal, state, local or foreign statute, law, rule, or 

regulation (as amended) governing the correction, collection, protection, 

retention, handling, control, disposal, processing, disclosure, sharing, sale, 

maintenance, acquisition, storage, access to, use or misuse of any Protected 

Information; 

4. interruption, outage, inability to access, compromise of, or corruption of 

Computer Systems or any data residing thereon; 

5. trading losses, trading liabilities or change in value of accounts; or 

6. loss, transfer or theft of monies, securities or tangible property to, from, or 

in the care, custody or control of, the Insured. 

Id. at Form PL991178 1020 (hereinafter, the “Cyber Liability Exclusion Endorsement”), at p. 1. 

C. EXCLUSIONS APPLICABLE TO PROFESSIONAL SERVICES 

LIABILITY AND TRUST SERVICES LIABILITY COVERAGES

 ... 

Fee Dispute – The Insurer shall not be liable under Insuring Agreements B. or C. 

for Loss in connection with any Claim made against any Insured arising from, 

based upon, or attributable to any disputes over fees, commissions, or charges for 

the Company’s services.

... 

Id. at Form PL990163 0414, at p. 7 (hereinafter, the “Fee Dispute Exclusion”). 

Lost Property - The Insurer shall not be liable under Insuring Agreements B. or 

C. for Loss in connection with any Claim made against any Insured arising from, 

based upon, or attributable to the actual physical loss of, or damage to, money, 

securities, property or other items of value in the care, custody or control of the 

Company, its correspondent bank or other authorized representative, including

money, securities, property or other Items of value stored in a safe deposit box at, 

or in transit while in the care, custody or control of, the Company, its correspondent 

bank or other authorized representative. 

Id. at p. 8 (hereinafter, the “Lost Property Exclusion”). 

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SECTION IV - OTHER TERMS AND CONDITIONS

This Section will supplement and not replace, Section XI., entitled “Other Terms 

And Conditions” contained in the General Terms and Conditions Applicable to All 

Coverage Parts.

 ... 

B. OTHER INSURANCE - This Coverage Part shall not be subject to the 

terms of any other insurance. All Loss, including Defense Expenses, 

payable under this Policy shall be excess to any other valid and collectible 

insurance available to any Insured, including any insurance under which 

there is a duty to defend, unless such insurance is written specifically excess 

of this Coverage Part by reference in such other policy to the Policy 

Number assigned to this Policy. 

Id. at p. 9 (hereinafter, the “Other Insurance Clause”). 

COUNT I: CLAIM FOR DECLARATORY RELIEF

(The Cyber Liability Exclusion Endorsement)

49. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

50. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

51. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the allegations raised against IRA by Griffin and the 

Claimants in their respective Claims. 

52. Wesco contends that the Policy does not provide coverage for the allegations raised 

against IRA in the Claims based upon the clear and unambiguous language of the Policy’s Cyber 

Liability Exclusion Endorsement. 

53. In the Claims, Griffin and the Claimants seek, inter alia, damages arising from: the 

theft or loss of their cryptocurrency; the theft, loss, or disclosure of Protected Information; the use 

or misuse of Protected Information; and/or the inability to access or use Protected Information due 

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to an alleged Data Breach that affected their accounts. See, e.g., Ex. 1 at ¶¶ 81, 111, 131, 133; see 

generally, Ex. 2, Comp. Ex. 3, and Comp. Ex. 4. 

54. The Policy’s Cyber Liability Exclusion Endorsement, excludes coverage for: 

(1) theft, loss, disclosure, collection, storage, retention, inability to access, 

alteration or corruption of, or use or misuse of any Protected 

Information; 

(2) failure to report, respond to or disclose the theft, loss, disclosure, 

collection, storage, retention, inability to access, alteration or corruption 

of, or use or misuse of any Protected Information; 

(3) violation of any federal, state, local or foreign statute, law, rule, or 

regulation (as amended) governing the correction, collection, protection, 

retention, handling, control, disposal, processing, disclosure, sharing, 

sale, maintenance, acquisition, storage, access to, use or misuse of any 

Protected Information; 

(4) interruption, outage, inability to access, compromise of, or corruption of 

Computer Systems or any data residing thereon; 

(5) trading losses, trading liabilities or change in value of accounts; or 

(6) loss, transfer or theft of monies, securities or tangible property to, from, 

or in the care, custody or control of, the Insured. 

Ex. 5 at Form PL991178 1020, at p. 1. 

55. Accordingly, Wesco is not obligated to advance and/or reimburse defense costs or 

indemnify IRA against the allegations asserted in the Claims. 

56. There exists a bona fide actual, present, and practical need for a declaration 

regarding coverage under the Policy and the rights and obligations of Wesco.

WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy for the Claims; and (b) grant such 

other relief as the Court may deem just, proper, and equitable under the circumstances. 

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COUNT II: CLAIM FOR DECLARATORY RELIEF

(The Lost Property Exclusion) 

57. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

58. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

59. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the allegations raised against IRA by Griffin and the 

Claimants in their respective Claims. 

60. Wesco contends that the Policy does not provide coverage for the allegations raised 

against IRA in the Claims based upon the clear and unambiguous language of the Policy’s Lost 

Property Exclusion. 

61. In the Claims, Griffin and the Claimants seek, inter alia, the return and/or payment 

for the loss of their cryptocurrency due to the alleged Data Breach/cyber hack that affected their

respective accounts. See, e.g., Ex. 1 at ¶¶ 109-110; see generally, Ex. 2, Comp. Ex. 3, and Comp. 

Ex. 4. 

62. The Lost Property Exclusion excludes coverage for “Loss in connection with any 

Claim made against any Insured arising from, based upon, or attributable to the actual physical 

loss of, or damage to, money, securities, property or other items of value in the care, custody or 

control of the Company....” Ex. 5, Form PL990163 0414, at pp. 6, 8. 

63. Accordingly, Wesco is not obligated to advance and/or reimburse defense costs or 

indemnify IRA against the allegations asserted in the Claims. 

64. There exists a bona fide actual, present and practical need for a declaration 

regarding coverage under the Policy and the rights and obligations of Wesco.

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WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy for the Claims; and (b) grant such 

other relief as the Court may deem just, proper, and equitable under the circumstances. 

COUNT III: CLAIM FOR DECLARATORY RELIEF

(The Insuring Agreement – Loss and the Florida Amendatory Endorsement) 

65. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

66. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

67. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the Claims. 

68. Wesco contends that the Policy does not provide coverage for the allegations raised

by Griffin and the Claimants against IRA in the Claims and, therefore, it has no duty to advance 

and/or reimburse defense costs or indemnify IRA due to Griffin and the Claimants’ failure to 

trigger the Policy’s Insuring Agreement. 

69. The Insuring Agreement B of the Professional Liability Coverage Part 

(Professional Services Liability) provides that “[t]he Insurer will pay on behalf of the Insured, 

Loss resulting from a Claim first made during the Policy Period or Extended Reporting Period (if 

exercised), by or on behalf of a customer of the Company for a Wrongful Professional Services 

Act.” Ex. 5, Form PL990163 0414, at p. 1. 

70. The Policy defines “Loss” to mean, in relevant part, “Defense Expenses and any 

amount the Insured is legally obligated to pay resulting from a Claim, including damages, 

judgments, settlements, punitive or exemplary damages or the multiple portion of any multiplied 

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damage award (if insurable under the applicable law most favorable to the insurability of punitive, 

exemplary, or multiplied damages), prejudgment and post judgment interest, and legal fees and 

expenses awarded pursuant to a court order or judgment.” Id. at p. 2. 

71. The Policy’s definition of “Loss” further states that “Loss shall not include: . . . 

costs to comply with any non-monetary or injunctive relief of any kind or any agreement to provide 

such relief, including but not limited to any damages, costs or expenses incurred in making an 

accommodation for any disabled person pursuant to the Americans with Disabilities Act or any 

similar federal, state or local laws, or in complying with any other federal, state or local laws of 

any kind; the depreciation (or failure to appreciate) in value of any investment product, including 

but not limited to securities, commodities, currencies, options or futures due to market fluctuation 

unrelated to any Wrongful Act; any restitution, disgorgement, or payment of similar payments 

including, but not limited to the return of fees, commissions or charges for the Company’s 

services; or any matters which are uninsurable under the law pursuant to which this Policy shall 

be construed.” Id. at pp. 2-3. 

72. In addition, the Florida Amendatory Endorsement (Form PL990170FL 0414) states 

that “[i]f Florida is the applicable jurisdiction, punitive and exemplary damages or the multiplied 

portion of any multiplied damage award are prohibited.” Id. at Form PL990170FL 0414, at p. 2. 

73. The Insuring Agreement B of the Professional Liability Coverage Part 

(Professional Services Liability) is not triggered because the relief sought in the Claims does not 

constitute Loss as the term is defined by the Policy. 

74. Specifically, Griffin and the Claimants seek non-monetary and injunctive relief, 

including implementation of certain protocols and procedures, as well as restitution and 

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disgorgement of revenues “wrongfully retained as a result of” IRA’s allegedly wrongful conduct. 

Ex. 1 at pp. 40-41, at “Wherefore” Clause; Comp. Ex. 3. 

75. Likewise, to the extent Griffin and the Claimants seek punitive damages and/or 

exemplary damages in the form of treble damages, such multiplied damage awards are expressly

prohibited pursuant to the Policy’s Florida Amendatory Endorsement. 

76. Accordingly, Wesco is not obligated to advance and/or reimburse defense costs or 

indemnify IRA against the allegations asserted by Griffin and the Claimants in the Claims. 

77. There exists a bona fide actual, present and practical need for a declaration 

regarding coverage under the Policy and the rights and obligations of Wesco.

WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy for the Claims; and (b) grant such 

other relief as the Court may deem just, proper, and equitable under the circumstances. 

COUNT IV: CLAIM FOR DECLARATORY RELIEF

(The Insuring Agreement – Wrongful Professional Services Act(s)) 

78. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

79. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

80. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the Claims. 

81. Wesco contends that the Policy does not provide coverage for the allegations raised 

by Griffin and the Claimants against IRA in the Claims and, therefore, it has no duty to advance

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and/or reimburse defense costs or indemnify IRA due to Griffin and the Claimants’ failure to 

trigger the Policy’s Insuring Agreement. 

82. The Insuring Agreement B of the Professional Liability Coverage Part 

(Professional Services Liability) provides that “[t]he Insurer will pay on behalf of the Insured, 

Loss resulting from a Claim first made during the Policy Period or Extended Reporting Period (if 

exercised), by or on behalf of a customer of the Company for a Wrongful Professional Services 

Act.” Ex. 5, Form PL990163 0414, at p. 1. 

83. The Policy defines “Wrongful Professional Services Act” to mean “any actual or 

alleged act, error, omission, misstatement, misleading statement or breach of duty or neglect by 

any Insured in the rendering of, or failure to render Professional Services.” Id. at p. 4. 

84. The Policy defines “Professional Services” as:

Professional Services means only the services set forth in the Specified 

Professional Services Schedule below that the Insured performs or is required to 

perform for or on behalf of a customer of the Company pursuant to a written 

agreement between such customer and the Company or, with respect to Loan 

Servicing, pursuant to a written agreement between a third party and the Company; 

 

1. for a fee, commission or other monetary compensation; 

2. for no fee, commission or other monetary compensation, if a fee, 

commission, or other monetary compensation would usually be 

received by the Company for such services, but for business or other 

reasons is waived or not charged by the Company; or 

3. for other remuneration which inures to the benefit of the Company. 

Specified Professional Services Schedule: 

• _X_ IRA Consultant Services 

Id. at Form PL990219 0414, at p. 1. 

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85. The Insuring Agreement B of the Professional Liability Coverage Part 

(Professional Services Liability) is not triggered since there is no Wrongful Professional Services 

Act(s) alleged in the Claims as the term is defined by the Policy. 

86. Rather, there are a considerable number of paragraphs in the Claims that speculate 

as to what the IRA could have and should have implemented to prevent and detect cyberattacks, 

including the attack that resulted in the subject Data Breach/cyber hack, as well as how the Data 

Breach has caused disruption and put consumers at an increased risk of fraud and identity theft. 

See, e.g., Ex. 1 at ¶¶ 73-78, 83-107; see generally, Comp. Ex. 3. None of these activities constitute 

a Wrongful Professional Services Act. 

87. Accordingly, Wesco is not obligated to advance and/or reimburse defense costs or 

indemnify IRA against the allegations asserted in the Claims. 

88. There exists a bona fide actual, present and practical need for a declaration 

regarding coverage under the Policy and the rights and obligations of Wesco.

WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy for the Claims; and (b) grant such 

other relief as the Court may deem just, proper, and equitable under the circumstances. 

COUNT V: CLAIM FOR DECLARATORY RELIEF

(The Fee Dispute Exclusion) 

89. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

90. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

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91. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the allegations raised against IRA by the Claimants in their 

respective Claims.

92. Wesco contends that the Policy does not provide coverage for the allegations raised 

against IRA in the Claims based upon the clear and unambiguous language of the Policy’s Fee 

Dispute Exclusion. 

93. In the Claims, the Claimants seek, inter alia, a refund of prior service fees charged 

by IRA. See, e.g., Comp. Ex. 4. 

94. The Fee Dispute Exclusion excludes coverage for “Loss in connection with any 

Claim made against any Insured arising from, based upon, or attributable to any disputes over 

fees, commissions, or charges for the Company’s services.” Ex. 5, Form PL990163 0414, at p. 7. 

95. Accordingly, Wesco is not obligated to advance and/or reimburse defense costs or 

indemnify IRA against the allegations asserted in the Claims. 

96. There exists a bona fide actual, present and practical need for a declaration 

regarding coverage under the Policy and the rights and obligations of Wesco.

WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy in the Claims; and (b) grant such other 

relief as the Court may deem just, proper, and equitable under the circumstances. 

COUNT VI: CLAIM FOR DECLARATORY RELIEF

(The Other Insurance Clause)

97. Wesco repeats and re-alleges the allegations contained in Paragraphs 1 through 48 

above with the same force and effect as if fully set forth herein. 

Case 1:22-cv-23507-RKA Document 1 Entered on FLSD Docket 10/27/2022 Page 29 of 32
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KAPLAN ZEENA LLP

2 South Biscayne Boulevard, Suite 3050, Miami, Florida 33131

Tel: (305) 530-0800 Fax: (305) 530-0801

98. This is an action against the Defendants for declaratory relief in connection with 

the Policy. 

99. An actual, justiciable controversy has arisen over whether the Policy issued by 

Wesco to IRA provides coverage for the Claims.

100. Wesco asserts that it has no duty to advance and/or reimburse defense costs or 

indemnify IRA under the Policy until such time as all other insurance available to IRA has been 

exhausted. 

101. The Policy’s Other Insurance clause contained in Section IV – Other Terms and 

Conditions of the Professional Liability Coverage Part provides that “[t]his Coverage Part shall 

not be subject to the terms of any other insurance. All Loss, including Defense Expenses, payable 

under this Policy shall be excess to any other valid and collectible insurance available to any 

Insured, including any insurance under which there is a duty to defend, unless such insurance is 

written specifically excess of this Coverage Part by reference in such other policy to the Policy 

Number assigned to this Policy.” Ex. 5, Form PL990163 0414, at p. 8. 

102. The clause renders the Policy excess to all other valid and collectible insurance 

unless specifically written to be excess to the Policy. Id.

103. Accordingly, notwithstanding any issues regarding lack of coverage, Wesco is not 

obligated to pay, reimburse, advance costs, or indemnify IRA against the allegations asserted in 

the Claims until all other applicable policies have been exhausted. 

104. IRA has purchased four (4) other insurance policies that it contends should provide 

coverage for the Claims. Further, IRA has provided notice of the Data Breach incident to these 

other insurance carriers under four (4) separate insurance policies: (1) a Commercial General 

Liability Policy, bearing policy number 1-660-9C44781A-TIL-21 (for the policy period March 14, 

Case 1:22-cv-23507-RKA Document 1 Entered on FLSD Docket 10/27/2022 Page 30 of 32
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KAPLAN ZEENA LLP

2 South Biscayne Boulevard, Suite 3050, Miami, Florida 33131

Tel: (305) 530-0800 Fax: (305) 530-0801

2021 to March 14, 2022), issued by Travelers; (2) a Business Owners Policy, bearing policy 

number ACP BPOL3057961368 (for the policy period October 15, 2021 to Oct. 15, 2022), issued 

by Allied Insurance Company of America; (3) a Financial Institution Bond policy, bearing policy 

number 1000057042211 (for the policy period October 14, 2021 to October 14, 2022), issued by 

Starr Indemnity & Liability Company; and (4) an Insured Persons Liability and Company 

Indemnification Policy, bearing policy number CBP6000222-01 (for the policy period October 14, 

2021 to October 14, 2022), issued by Houston Specialty Insurance Company (the “HSIC Policy”). 

105. Houston Specialty Insurance Company has agreed to provide a defense to IRA 

under a reservation of rights pursuant to the HSIC Policy. 

106. Accordingly, there is valid and collectible insurance available to IRA thus 

rendering the Policy excess to, inter alia, the HSIC Policy and relieving Wesco of any duty to 

advance defense costs until such time as all other valid and collectible insurance policies have been 

exhausted. 

107. Therefore, there exists a bona fide actual, present and practical need for a 

declaration regarding coverage under the Policy and the rights and obligations of Wesco. 

WHEREFORE, Plaintiff, Wesco Insurance Company, respectfully requests that this 

Court enter judgment in its favor and: (a) declare that Wesco has no obligation to advance and/or 

reimburse defense costs or indemnify IRA under the Policy with respect to the Claims until such 

time that all other insurance available to IRA has been exhausted; and (b) grant such other relief 

as the Court may deem just, proper, and equitable under the circumstances. 

Dated this 27th day of October 2022. 

Respectfully submitted,

KAPLAN ZEENA LLP

Attorneys for Plaintiff, Wesco Insurance Company 

Case 1:22-cv-23507-RKA Document 1 Entered on FLSD Docket 10/27/2022 Page 31 of 32
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KAPLAN ZEENA LLP

2 South Biscayne Boulevard, Suite 3050, Miami, Florida 33131

Tel: (305) 530-0800 Fax: (305) 530-0801

2 South Biscayne Blvd., Suite 3050 

Miami, Florida 33131

Telephone: (305) 530-0800

Facsimile: (305) 530-0801 

 

 By: /s/ James M. Kaplan 

 JAMES M. KAPLAN

 Florida Bar No.:921040 

 james.kaplan@kaplanzeena.com 

 elizabeth.salom@kaplanzeena.com

service@kaplanzeena.com

KIMBERLY S. HEIFFERMAN 

 Florida Bar No.: 055996 

 kimberly.heifferman@kaplanzeena.com 

 julie.valdes@kaplanzeena.com

cheryl.mingo@kaplanzeena.com

 MARIA KIMIJIMA

 Florida Bar No.: 115504 

 maria.kimijima@kaplanzeena.com

maria.escobales@kaplanzeena.com 

Case 1:22-cv-23507-RKA Document 1 Entered on FLSD Docket 10/27/2022 Page 32 of 32