Traverse City Record-Eagle

Meijer-Acme Township Dispute

August 21, 2010

Meijer expands insurance dispute

TRAVERSE CITY — Meijer Inc. expanded its insurance dispute over payments to Acme Township officials, suing two more insurance industry giants as third-party defendants days before a judge will decide if case documents should be sealed from public view.

Meijer named both Marsh U.S.A Inc. and Discover Property & Casualty Insurance Co., divisions of two the nation's largest insurance brokerage and insurance companies, in its dispute with American Home Assurance Company, a division of AIG Inc.

New York-based American Home sued Meijer in June and contends it's not responsible for covering $2.2 million in payouts Meijer made to six township officials to settle a 2008 lawsuit. Meijer responded to its insurer's suit in a document it requested be held under seal and exempt from public review. Meijer then counter-sued American Home, filing that document under seal. Its claims against Marsh and Discover Property & Casualty, also known as Discover Re, were also filed under seal.

Parties will argue the motion to maintain the seal on those filings and future documents on Monday in front of 13th Circuit Court Judge Philip Rodgers. American Home asked Rodgers to deny the motion.

"We believe this is a public matter of public interest, involves public officials, a public state agency, and public policy," said American Home attorney Joseph Quandt of Traverse City. "Seeking protection to avoid embarrassment is not a valid basis to seal a record."

In court documents Quandt said the claims Meijer filed under seal contain no new facts not already within the public domain.

"Meijer has failed to identify any special interest that needs to be protected, nor has Meijer even identified what specific information or documents it is seeking to protect from disclosure," Quandt wrote. "Meijer has not demonstrated any 'cause,' much less a 'just cause,' to support secrecy."

The lawsuit has so far provided some insight as to what Meijer's endeavors in two Acme Township elections have cost the retail giant, beyond a $190,000 fine for violating state campaign finance laws.

During a contentious zoning dispute over a proposed superstore along M-72 that began in 2004, Meijer personally sued several Acme Township officials. Former township Treasurer Bill Boltres then sued Meijer in 2007 for malicious prosecution and uncovered Meijer's efforts to create and fund a citizens front group that harassed township officials, and its attempts to manipulate a 2005 township zoning referendum and a 2007 recall attempt.

Meijer agreed to a confidential settlement with Boltres.

Five other township officials sued Meijer and developer The Village at Grand Traverse LLC for malicious prosecution in 2008. Meijer and The Village settled for $1.5 million, and paid a sixth unnamed official $700,000.

Discover Re held an underlying $2 million policy that paid out on Boltres' suit, and Meijer contends the Boltres settlement exhausted that coverage.

American Home argues that it doesn't have to pay Meijer's $2.2 million settlement because Meijer publicized "known false information" about the officials, failed to share information about the case and didn't exhaust its underlying insurance coverage. American Home said the underlying insurance should have been $3 million.

Discover RE, a division of Travelers, a Fortune 100 company, declined comment through a spokesman.

Marsh, a leading insurance brokerage and risk management adviser, is a unit of Marsh & McLennan Companies, a global professional-services firm with more than 50,000 employees and annual revenue of $10 billion. It also declined to comment through a spokesman.

Meijer's attorneys previously said they wouldn't comment on the case, and messages left at their office Friday were not returned.

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