Federal Judge Dismisses Munich Re's Counterclaim in Setoff Dispute

CHICAGO - An Illinois federal judge has dismissed with prejudice a reinsurer's counterclaim for breach of the utmost duty of good faith, ruling that Illinois law does not recognize an independent cause of action for such a breach. Guarantee Trust Life Insurance Co. v. Insurers Administrative Corp., No. 09-5129 (N.D. Ill.).

On Sept. 24, Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois held that Munich Reinsurance America Inc. failed to provide any authority recognizing an independent cause of action for breach of the duty of utmost good faith, and therefore the counterclaim …