National Union Fire Insurance Co. of Pittsburgh v. Continental Illinois Corp.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Harbor Insurance Company (“Harbor”), Allstate Insurance Company (“Allstate”) and National Union Fire Insurance Company of Pittsburgh, Pa. (“National Union”) have sued Continental Illinois Corporation (“CIC”), its subsidiary Continental Illinois National Bank and Trust Company of Chicago (“Bank”)¹ and a host of other defendants, seeking to avoid liability under the directors’ and officers’ (“D & 0”) policies plaintiffs had issued to CIC.² Among the individual defendants was former Bank officer James Harper, Jr. (“Harper”), who has filed a motion for dismissal and a companion motion for the imposition of sanctions under Fed.R.Civ.P. (“Rule”) 11.

Just as in the case of the other individual defendants (“Outside Directors”) whom this Court has just dismissed from these actions, Harper’s motion is in part constitutional, based on the Article III restriction of this Court’s jurisdiction to “Cases” or “Controversies.” And everything said in this Court’s opinion dismissing those Outside Directors (the “Opinion,” 110 F.R.D. 615) applies with equal force to Harper, whose dismissal really follows directly from dismissal of the least-involved Outside Directors.

Of the three underlying securities actions referred to in the Opinion, Harper was named a defendant only in the case still pending before Honorable John Grady, In re Continental Securities Litigation, No. 82 C 4712. On October 12, 1984 Judge Grady entered summary judgment in Harper’s favor on one count (that charging securities law violations), and on February 15, 1985 Judge Grady granted summary judgment for Harper on two of the other three counts in which Harper had originally been named (those charging fraud). In the interim the claims in the other count against Harper (charging negligence) had been dismissed without prejudice November 6, 1984.

Like Outside Directors Gordon Corey and William Hewitt, Harper is thus out of all substantive litigation whatever. And like Corey and Hewitt, Harper has been fully reimbursed for his litigation expenses. Thus he neither has nor asserts any claim against Harbor-Allstate or National Union. All these things were known to Harbor-Allstate and National Union and their attorneys before these actions were ever filed.

Harbor-Allstate and National Union make the same empty responses to Harper that they made in resisting Outside Directors’ motion to dismiss. This Court has already considered and rejected those responses in the Opinion, and it is unnecessary to thresh the same straw twice.

Accordingly Harper is dismissed from these actions. As with the Corey-Hewitt motion, Harbor-Allstate and National Union are ordered to respond to Harper’s Rule 11 motion on or before July 2, 1986.

1 . CIC and Bank are collectively called "Continental.”

2 . This opinion is the fifth to treat with the motions this Court inherited on the recent reassignment of these actions to its calendar.