In Latest Salvo AIG Says its Former Execs at Dellwood Are ‘Bad Leavers’

In its latest court filing to keep alive a lawsuit against start-up Dellwood Insurance, American International Group said its new competitor failed to explain why the suit cannot go on.

AIG argued in a brief filed yesterday in U.S. District Court in New Jersey that Dellwood “strained to argue” that AIG could not continue with a lawsuit against Dellwood after earlier dropping claims against three of its executives—all former AIG employees.

Dellwood in June filed to dismiss the case on the res judicata doctrine. Dellwood asserted that since AIG’s actions against Dellwood included similar allegations as the claims against the individual executives, the suit could not stand. Originally, AIG individually named Michael Price, Kean Driscoll and Thomas Connolly in the lawsuit. Each were employed with AIG before starting E&S insurer Dellwood. Price and Driscoll are CEO and CUO, respectively, of Dellwood, launched in March for wholesale brokers with an eye on small- and middle-enterprise risks. Connolly is Dellwood’s CFO.

But the doctrine, AIG said, is only applied to subsequent cases, not to bar claims in the same case. AIG called Dellwood’s arguments “quixotic.”

“No matter how hard Dellwood tries to spin it otherwise, the voluntary dismissal of the former executives was not an adjudication of the merits of AIG’s claim in their favor,” AIG said. The company continued to allege Dellwood and its executives stole confidential information and trade secrets later used in Dellwood’s business plans, while violating employment agreements with AIG.

AIG furthermore used the filing to fire back at other Dellwood contentions, including that AIG was using the court system to beat down a “fledgling startup.”

“With all due respect to Dellwood’s ambitions, the reality is that, as one of the world’s leading insurance companies, AIG vies against myriad competitors, virtually all of them more significant than Dellwood,” lawyers for the company wrote. “AIG, however, will not tolerate any company misappropriating its confidential information and assets to unfairly compete.”

Dellwood in its filing to dismiss also had claimed AIG makes it very difficult for employees to leave the company for other industry jobs, even referencing lyrics from the Eagles song Hotel California: “You can check out at any time you like but you can never leave.”

AIG said the insurance industry is filled with individuals at other companies who spent significant time at AIG, adding that the “critical difference in this case is that the former executives who founded Dellwood were bad leavers who breached duties they owed to AIG.”

Returning to Hotel California, AIG’s counsel pointed out that the song is not about trapping guests, but is “a metaphor depicting the plight of those who, like Dellwood and its principals, have made poor decisions and engaged in other problematic behavior…”

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