Free Motion for Partial Summary Judgment - District Court of Colorado - Colorado

Case 1:04-cv-00725-RPM

Document 41-38

Filed 07/01/2005

Page 1 of 3

LEWI LEWIS

BRISBOI BRISBOIS

BISGAARD
AT LAW

SMITH

LLP

ATTORNEY ATTORNEYS

100 PHONE

WALL

STREET

NINTH FAX

FLOOR

NEW

YORK

NEW WEBSITE

YORK

100053701 WWWLBBSLAWCOM

2122321300

2122321399

THOMA THOMAS

M

SANFORD

APRIL

2004

FILE NO 2645781

DIRECTDIAL EMAIL

212 2321309 SANFORDLBBSLAWCOM

APR
VIA AND FACSIMILE FIRST CLAS CLASS

303

2912400

2004

MAIL

LEONARD H

MACPHEE ESQ

PERKIN PERKINS COIE 1899 S WYNKOOPTREET 802021043

SUITE 700

DENVER CO
RE

WESTCHESTERFIRE INSURANCE COMPANY PROTECTIONINSURANCE POLICY MANAGEMENT INSURED THE QUIZNOS QUIZNO CORPORATION POLICIE POLICIES CLAIM NO MATTER DON 648451 X390L9630918
1

SEBESTA THE

2

THE SEBESTA ACTION DISSENTER V QUIZNO CORPORATION FAGAN ET AL THEDISSENTERS
V

SCHADENET

AL

ACTION
3 NICKERSON
V

THE

ET AL QUIZNO CORPORATION THENICKERSON QUIZNOS

ACTION
DEAR LEN
TO QUIZNO QUIZNOSCORPORATION QUIZNO QUIZNOS IN RESPECT THE OF AND ITS CLIENTS COVERAGE POSITION OUR CLIENT WESTCHESTERFIRE INSURANCE COMPANY WESTCHESTER CLAIM CLAIMS ADMINISTRATOR ACE USA IN RESPECT THE SUBJECT OF MATTERS WESTCHESTERAND ACE TO REVIEW NEW INFORMATION CONCERNINGSUBJECT THE ACE ON ITS BEHALFHAVE HAD AN OPPORTUNITY THI MATTER MATTERS AND TAKE THIS OPPORTUNITY TO INFORM THE INSURED OF CERTAIN THAT POLICY PROVISION PROVISIONS MAY LIMIT OR PRECLUDE WITH WESTCHESTERS DUTIES AND OBLIGATIONS WESTCHESTER DUTIE AS OBLIGATION AN INSURER COVERAGE IN KEEPING ALL CAPITALIZED TERM TERMS USED HEREIN SHALLHAVE THE DEFINITIONS DEFINITION ASCRIBED TO THEM UNDER THE CAPTIONED UNLES UNLESSOTHERWISE SPECIFIED POLICY

THI THIS LETTER WILL

SERVE

TO INFORM THE

TO THE MAY 22 2001 QUIZNOS ANNOUNCED THAT IT HAD RECEIVED PROPOSALCOMPLETE QUIZNO TRANSACTIONTHE TRANSACTION MERGING WITH FIRENZE CORP AN GOINGPRIVATE BY OWNED BY RICHARD E SCHADEN QUIZNOS CHAIRMAN PRESIDENT AND CEO AND ENTITY WHOLLY QUIZNO

ON

SECOND STEPOF

LOS ANGELES ANGELE 2132501800

SAN

FRANCISCO

SAN DIEGO

COSTA

MESA

SAN BEIAIWNJO

SACRAMENTO 9165645400

NEW

YORK

LAS VEGAS VEGA 7023669212

4153622580

6192331006

7145459200

9093871130

2122321300

4831768952321

QWEST00345

Case 1:04-cv-00725-RPM
LEWI LEWIS BRISB0IS BRISB0I
LEONARD H

Document 41-38
LLP

Filed 07/01/2005

Page 2 of 3

BISGAARD

FIL

MACPHEE ESQ

APRIL
PAGE

2004

RICHARD F BE THE

SECRETARY WHEREBY QUIZNO WOULD QUIZNOS OWNED CORPORATIONMERGER THE FIRSTSTEP THE TRANSACTION SURVIVINGRIVATELY P OF THE WAS SELF TENDER OFFERCOMPLETED DECEMBER 11 2000 WHEREBY ON QUIZNO OFFEREDTO PURCHASE QUIZNOS ITS SHARES FROM EXISTING SHARE SHAREHOLDER SHAREHOLDERSFOR 800 PER SHARE THE TENDER OFFER IN CONNECTION WITH THE MERGER THOSE MINORITY SHAREHOLDER SHAREHOLDERS HAD NOT PARTICIPATED TENDER OFFER WERE WHO IN THE OFFERED850 SHARE THE SHAREHOLDERS SHAREHOLDER APPROVED MERGER VOTE ON NOVEMBER 30 2001 THE PER BY
ON NOVEMBER
ON

VICE SCHADENQUIZNOS QUIZNO DIRECTOR

PRESIDENT AND

14 2001 QUIZNOS OF QUIZNO NOTIFIEDWESTCHESTER OF THE FILING THE SEBESTA ACTION

CLAS CLASS OF SHAREHOLDERS QUIZNOSON OCTOBER 2001 SHAREHOLDER QUIZNO OF BROUGHT THE COMPLAINT THAT ALLEGED THE RECOMMENDATION OF 850 PURCHASE WAS AND CONSTITUTED PRICE INADEQUATE BREACH OF FIDUCIARY DUTIE DUTIES BY THE DIRECTORS THE MINORITY DIRECTOR TO SHAREHOLDERS DECEMBER 27 2001 ON QUIZNO NOTIFIEDWESTCHESTER OF ITS RECEIPT LETTERS QUIZNOS OF LETTER FROM NUMBER OF SHAREHOLDERS SHAREHOLDER INDICATING THEIR INTENT TO DEMAND PAYMENT TO THE COLORADO BUSINES BUSINESS CORPORATION CBCA ACT PURSUANT DISSENTER DISSENTERS RIGHTS DISSENTER GOVERNING THEREAFTER QUIZNO QUIZNOSFILED THE DISSENTERS ACTION SEEKING JUDICIAL OF SHAREHOLDER SHAREHOLDERS SHARES WESTCHESTER RECEIVEDNOTICE OF THE NICKERSON APPRAISAL THE DISSENTING ACTION BYCORRESPONDENCE OF JANUARY 2004 THE NICKERSON ACTION PURPORTS BE ON BEHALF OF 23 TO PURPORT CLAS CLASS OF SHAREHOLDERS SHAREHOLDER WHO PARTICIPATED IN THE TENDER OFFER AND NAMES NAME QUIZNO QUIZNOSAND CERTAIN DIRECTORAND OFFICER QUIZNOS DEFENDANTS THE ALLEGATIONS NICKERSON ACTION MIRROR DIRECTORS OF QUIZNO AS OF ALLEGATIONTHE THOSE MADE IN THE SEBESTA ACTION THAT THE PRICE PAIDIN THE TRANSACTION WAS INADEQUATE AND CONSTITUTEDBREACH OF FIDUCIARY DUTIE DUTIES BY THE DIRECTORS THE MINORITY DIRECTOR TO SHAREHOLDERS BEHALF OF COUNSEL FORWESTCHESTER ISSUED AN INITIAL RESERVATIONOF RIGHTS LETTER RIGHT ON JANUARY 2002 THATPOSITION CORRESPONDENCE SUPPLEMENTED OF FEBRUARY2002 AND MARCH 19 2002 AND BY

AND

MARCH

10

2004
AS

SPECIFICALLY

MORE

IN RESPECT THE SEBESTA ACTION WESTCHESTER RESERVED RIGHTS OF AND RIGHT GENERALLY DESCRIBED IN EACH OF THE RESPECTIVE FULLY LETTER AND BY RECENT LETTERS

AND ALLSUCH RESERVATIONOF RIGHTS THE NICKERSON ACTION CORRESPONDENCE ADOPTED INCORPORATED TO RIGHT WESTCHESTERDENIED COVERAGE OF THE DISSENTERS ACTION AS IT MERELYOUGHT ESTABLISHMENTF DISSENTER THE O S FAIR PRICE FORTHE SECURITIES ISSUEAND DID NOT ALLEGE WRONGFUL BY INSUREDS SECURITIE AT ACT ACTS ANY THE

COURT COURTS OPINION DATED

JANUARY 2004

IN THE DISSENTERS ACTION INDICATESTHATTHE DISSENTER INDICATE

INSURED DID NOT PAY FAIR VALUE TO ITS SHAREHOLDERS CONNECTION WITH THE TRANSACTION WE REFER SHAREHOLDER IN TO THE JANUARY 2002 CORRESPONDENCE TO PATRICK E MYERS YOU MYER ESQ FROM ARTER HADDEN LLP IN WHICH WESTCHESTER SPECIFICALLY RESERVED ITS RIGHTS RESPECT EXCLUSIONA7 IN OF RIGHT OF THE

POLICY

WHICH PROVIDES THAT PROVIDE
THE INSURER SHALLNOT BE LIABLEFORLOSS LOS MADE
ON

ACCOUNT OF ANY CLAIM

AGAINST INSURED BASED UPON ARISING OF OR ATTRIBUTABLE OUT ANY TO SUCH INSURED GAINING FACT IN R O ANY PROFITEMUNERATIONR FINANCIAL TO WHICH SUCH INSURED IS NOT LEGALLY ADVANTAGE BUT THIS ENTITLED THI EXCLUSION SHALLNOT APPLY LOSS INDENMIFIED BY THE COMPANY TO LOS
ACE FINANCIAL AND WESTCHESTERHAVE HAD
AN

TO REVIEW OPPORTUNITY

THE DECISION IN THE DISSENTERS DISSENTER
OR PROFIT

ACTION AND BELIEVE THATTHE DECISION
TO WHICH ADVANTAGE
IT WAS

IN ESTABLISHE ESTABLISHES
NOT

THATQUIZNOS RECEIVED FACT QUIZNO

ENTITLED ACCORDINGLY ACE LEGALLY

AND WESTCHESTER

483

1768952321

QWEST00346

Case 1:04-cv-00725-RPM
LEWI LEWIS BRISBOIS BRISBOI
LEONARD H

Document 41-38
LLP

Filed 07/01/2005

Page 3 of 3

BISGAARD

1TH

MACPHEE ESQ

APRIL PAGE

2004

MATTER TO THE TRANSACTION BASED DENY COVERAGE FORALL MATTERS RELATING ACE AND WESTCHESTERFURTHER THE RIGHT SEEK RESERVE TO SPECIFICALLY OF DEFENSE COST FROM THE INSUREDS COSTS TO WHICH INSURED PURSUANT CLAUSE OF THE POLICY REPAYMENT THE EXTENT THATIT IS FINALLY TO ESTABLISHEDTHAT SUCH DEFENSE COSTS ARE NOT COST REQUIRE REQUIRES REPAYMENT COVERED UNDER THE POLICY

RESERVE SPECIFICALLY UPON EXCLUSION A7

THE RIGHT TO

31 2004 ADVISING IN PLAINTIFF THE PLAINTIFFS NICKERSON ACTION AS WELL AS YOU VOICEMAIL OF APRIL 2004 ADVISING PLAINTIFFS AGREED MEDIATE THAT THATPLAINTIFF HAVE TO MESSAGE TO THE UNDERSIGNED MATTER IN LIGHT THE ABOVE AND THE PRIORORRESPONDENCE OF FROMCOUNSEL TO ACE AND C THE DOE D TO WESTCHESTER POLICYOES NOT RESPONDPROVIDE TO INCURREDBY COVERAGE WITH RESPECT LIABILITY INSURED INSUREDS RELATING TO INADEQUATE CONSIDERATION PAID SHAREHOLDERS TO SHAREHOLDER FORTHEIR HOLDINGSQUIZNOS IN HOLDING QUIZNO MAY OF COURSE SEEK TO SETTLETHE NICKERSON ACTIONBUTIN DOING IT SHOULD QUIZNOS SO UNDERSTANDTHATTHEREIS NO COVERAGE AFFORDEDFORSUCH LOSS UNDER THE POLICYACE AND LOS WESTCHESTER DISAGREE YOUR CONTENTION WITH THATTHE NICKERSON ACTION IS NOT RELATEDTO THE SEBESTA ACTION AND CONFIRMS THEIR POSITION CONFIRM OUTLINED IN OUR CORRESPONDENCE OF MARCH 10 2004 BOTH IN OF THE APPLICABILITY OF EXCLUSION A1 OF POLICYO DON N G21635662002 AND IN RESPECT RESPECT OF THE REASONABLENESSAND NECESSITY REASONABLENES OF RETAINING COUNSEL TO DEFEND THE NICKERSON ACTION NEW
US

THI THIS WILL ALSO ACKNOWLEDGE OF OF MARCH RECEIPTYOUR CORRESPONDENCE

OF

SETTLEMENTDEMAND FROM

ACE
AT LAW AND IN

AND WESTCHESTER MUST

CONTINUE TO

RESERVE

ALL RIGHTS DEFENSES UNDER THE POLICY AND DEFENSE RIGHT

WHETHER OR NOT REFERENCED THE HEREININCLUDING RIGHT DENY TO EQUITY COVERAGE BASED OTHER THAN THOSE EXPRESSLY FORTHIN THIS LETTER SET THI AND TO SUPPLEMENT ANDLORAMEND UPON GROUNDS GROUND THI THIS LETTER TO ADDRESS ADDITIONAL COVERAGE ISSUES AS THEY ADDRES ISSUE MAY ARISE BASED UPON ALL OF THE ENDORSEMENT DEFINITION PROVISION PROVISIONS TERM CONDITION EXCLUSIONS TERMS CONDITIONS EXCLUSIONENDORSEMENTS AND DEFINITIONS FOUND IN THE POLICY ITS AND ANY ADDITIONAL FACTS THAT MAY COME FACT TO ACE AND WESTCHESTERS ATTENTION WESTCHESTER APPLICATION STATED HEREIN AND NO FURTHERACTION TAKEN BY WESTCHESTER OR ON ITS BEHALF SHOULD BE NOTHING CONSTRUED AS WAIVER OF ANY OF ITS RIGHTS UNDER THE POLICY LAW OR IN EQUITYON THE CONTRARY AT RIGHT THI THIS TO IRISUREDS IN BY PROVIDING OR ANY PRIOR OR CORRESPONDENCE IRISUREDBY ENGAGING ANY PRIOR FUTURE DISCUSSION DISCUSSIONS WITH THE INSUREDS BYPAYING AGREEINGPAY ANY AMOUNT TO OR ON BEHALF OF THE OR TO INSURED OR DOE DOES INSURED WESTCHESTER EXPRESSLY NOT WAIVE ANY SUCH RIGHTS INSUREDS IF YOU HAVE ANY FEEL QUESTIONLEASE FREETO CONTACT QUESTIONS P THE UNDERSIGNED

VERY

YOUR YOURS

THOMA THOMAS M LEWI LEWIS TMS

SANFORD OF BISGAARD SMITH LLP

BRISBOI BRISBOIS

MAPCM KENNETH D MILBAUER

CC

4831768952321

QWEST00347