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Case 2:11-cv-00326-SRC -MAS Document 1 Filed 01/19/11 Page 1 of 22 PageID: 1

Dughi & Hewit, P.e.


340 North Avenue
Cranford, New Jersey 07016
908.272.0200
RLH-3813
Attorneys for Plaintiffs,
Edward P. Boykin, Phyllis A. Boykin,
Azis S. Hasan, Carol A. Hasan,
Ronald K. Walker and Jane e. Walker

IN THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF NEW JERSEY

EDWARD P. BOYKIN, PHYLLIS A. Civil No.:


BOYKIN, AZIZ S. HASAN, CAROL A.
HASAN, RONALD K. WALKER, and
JANE C. WALKER, as assignees of
DAVID M. CONNOLLY,

Plaintiffs, COMPLAINT

v.

ILLINIOS UNION INSURANCE


COMPANY, MONTY L. DAVIS, MARY
R. DAVIS, RICHARD L. BERGMARK,
TONI L. BERGMARK,

Defendant

COMPLAINT

Plaintiffs, Edward P. Boykin and Phyllis A. Boykin (the "Boykins"), Azis S. Hasan and

Carol A. Hasan (the "Hasans"), and Ronald K. Walker and Jane C. Walker (the "Walkers")

(collectively, the "Plaintiffs"), by and through their attorneys, Dughi & Hewit, P.C., by way of

Complaint, state as follows:


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THE PARTIES

1. At all times material hereto, the Boykins were citizens of the State of Florida,

residing at 14 Via Marino, in the City of Palm Coast.

2. At all times material hereto, the Hasans were citizens of the State of Florida,

residing at 2 Laguna Court, in the City of Palm Coast.

3. At all times material hereto, the Walkers were citizens of the State of Florida,

residing at 10 Via Marino, in the City of Palm Coast.

4. Upon information and belief, David M. Connolly ("Connolly") is a citizen of New

Jersey, residing at 106 Stanie Brae Drive, in the Borough of Watchung, and the president of

Connolly Properties, Inc. ("Connolly Properties").

5. Upon information and belief, Defendant lllinois Union Insurance Company

("lllinois Union") is a corporation organized and existing under the laws of the State of lllinois

with its principal place of business in the State of lllinois.

6. Upon information and belief, Defendants, Monty L. Davis and Mary R. Davis (the

"Davises") are citizens of the State of Texas, residing at 19827 Cypress Church Road, Cypress,

Texas.

7. Upon information and belief, Defendants Richard L. Bergmark and Toni M.

Bergmark (the "Bergmarks") are citizens of the State of Texas, residing at 60 Tiel Way,

Houston, Texas.

JURISDICTION AND VENUE

8. Jurisdiction is conferred on this Court pursuant to 28 U.S.C. § 1332 in that this is

an action between citizens of different states and the amount in controversy exceeds $75,000,

exclusive of interest and costs. The Plaintiffs are all residents of the State of Florida. Upon

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information and belief, Connolly is a resident of the State of New Jersey. Upon information and

belief, the Davises and the Bergmarks are all residents of the State of Texas. Upon information

and belief, lllinois Union is a corporation organized and existing under the laws of the State of

lllinois with its principal place of business in the State of lllinois.

9. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(a)(I) and (2), in

that Connolly resides in this District and a substantial part of the events or omissions giving rise

to the claims asserted herein occurred in this District.

GENERAL ALLEGATIONS

10. lllinois Union Insurance Company ("lllinois Union") issued a Business and

Management Indemnity Policy, bearing policy number BMI20062163 (the "lllinois Union

Policy"), for the benefit of Connolly Properties and Connolly.

11. The lllinois Union Policy covers Connolly for claims made under the lllinois

Union Policy during the policy period of December 12, 2008 to December 12, 2009 (the "Policy

Period").

12. The lllinois Union Policy has a $1,000,000 limit of liability under the

"Management Insureds and Company Coverage Section."

13. Upon information and belief, the remaining limits on the lllinois Union Policy are

$746,453.68 (the "Remaining Policy Limits").

14. Under the "Insuring Clauses" of the lllinois Union Policy, lllinois Union shall

"pay the Loss of the Management Insureds for which the Management Insureds are not

indemnified. by the Company and which the Management Insureds have become legally

obligated to pay by reason of a Claim first made against the Management Insureds during the

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Policy Period, . . . and reported to the Insurer pursuaut to subsection El herein, for auy

Wrongful Act taking place prior to the end of the Policy Period." (Emphasis in original).

15. Connolly is au "Insured" under the illinois Union Policy, due to his role as a

"Mauagement Insured" (defined in the illinois Union Policy to include all General Partners,

Directors, Officers, Mauagers, aud employees of Connolly Properties).

16. The Plaintiffs fust made a claim covered by the illinois Union Policy against

Connolly during the Policy Period and filed a Complaint in the United States District Court,

District of New Jersey, entitled, Edward P. Boykin, et ai. v. Connolly Properties, Inc., et ai.,

Civil Action No. 09-5267 (DRD) (the "Underlying Litigation") against Connolly and Connolly

Properties, seeking monetary relief for wrongful acts committed during the Policy Period.

17. The Complaint in the Underlying Litigation qualifies as a "Claim" under the

illinois Union Policy: "a civil proceeding against any Insured seeking monetary damages or non-

monetary or injunctive relief, commenced by the service of a complaint or similar proceeding."

18. Pursuaut to Judge Debevoise's October 25, 2010 Order (the "Underlying

Judgment") in the Underlying Litigation, judgment was entered in the amount of $1,368,502 plus

interest against Connolly, aud in favor of the Plaintiffs as follows: (1) in favor of the Boykins

aud against Connolly in the amount of $487,500 plus interest; (2) in favor of the Hasans and

against Connolly in the amount of $496,002 plus interest; and (3) in favor of the Walkers aud

against Connolly in the amount of $385,000 plus interest.

19. The Underlying Judgment is based on conduct that is covered by the illinois

Union Policy aud Connolly is legally obligated to pay the Underlying Judgment. The

Underlying Judgment qualifies as a covered "Loss" under the illinois Union Policy: "Loss meaus

damages, judgments, ... awarded by a court."

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20. Connolly's actions that precipitated the finding of liability qualify as "Wrongful

Acts" covered under the illinois Union Policy: "Wrongful Act means any actual or alleged error,

omission, misleading statement, misstatement, neglect, breach of duty or act allegedly committed

or attempted by: a) any of the Management Insureds, while acting in their capacity as such."

21. In connection with the Underlying Litigation, Connolly and the Plaintiffs entered

into an Assignment Agreement (the "Assignment Agreement"), pursuant to which Connolly

assigned to the Plaintiffs all of Connolly's rights and claims against illinois Union for, among

other things, coverage for the Underlying Judgment as well as for extra-contractual damages.

22. A true copy of the Assignment Agreement is attached as Exhibit A.

23. On or about September 8, 2009, the Davises and the Bergmarks filed an action

against Connolly in the United States District Court, District of New Jersey, alleging that

Connolly misappropriated the Plaintiffs' funds.

24. On or about February 11, 2010, the United States District Court, District of New

Jersey entered partial summary judgment against Connolly, finding Connolly liable to the

Davises and the Bergmarks for breach of fiduciary duty and conversion. In a second Opinion

and Order entered on September 2, 2010, United States District Court, District of New Jersey

entered a Final Judgment against Connolly and in favor of the Davises and the Bergmarks in the

total amount of $1,045,000.

FIRST COUNT

BREACH OF CONTRACT

25. The Plaintiffs repeat and reallege the allegations set forth in the preceding

Paragraphs of this Complaint with the same force and effect as if each were fully set forth at

length herein.

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26. The illinois Union Policy is a valid and enforceable contract, pursuant to which

illinois Union, among other things, is obligated to indemnify Connolly for any Loss incurred

during the Policy Period.

27. By reason of illinois Union's failure to indemnify Connolly for a Loss incurred

during the Policy Period, illinois Union has materially breached the illinois Union Policy and has

directly and proximately caused Connolly significant damages and loss in an amount to be

determined at trial, which claims Connolly has assigned and transferred to the Plaintiffs.

28. Connolly assigned any and all claims for coverage under the illinois Union Policy

to the Plaintiffs.

WHEREFORE, the Plaintiffs demand judgment against illinois Union as follows:

a. Declaring that the illinois Union Policy covers the Underlying Judgment;

b. Declaring that Connolly's interest in the Remaining Policy Limits, which has

been assigned to the Plaintiffs, is superior to that of the Davises and the

Bergmarks;

c. Ordering specific performance of the illinois Union Policy;

d. Ordering illinois Union to indemnify Connolly pursuant to the illinois Union

Policy;

e. Awarding compensatory damages;

f. Awarding pre- and post-judgment interest;

g. Awarding the Plaintiffs their attorneys' fees, costs, and disbursements; and

h. Granting other such relief as this Court deems just and proper.

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SECOND COUNT

BREACH OF FIDUCIARY DUTY - COMPENSATORY DAMAGES

29. The Plaintiffs repeat and reallege the allegations set forth in the preceding

Paragraphs of this Complaint with the same force and effect as if each were fully set forth at

length herein.

30. lllinois Union owed a fiduciary duty to Connolly with regard to the lllinois Union

Policy.

31. lllinois Union breached its fiduciary duty to Connolly by, among other things,

failing and refusing to indemnify Connolly for covered Loss under the lllinois Union Policy.

32. As a direct and proximate result of this breach by lllinois Union, the Plaintiffs, as

assignees of Connolly's rights and claims against lllinois Union, have been and continue to be

damaged in an amount to be determined at trial.

33. Connolly assigned any and all claims for breach of fiduciary duty to the Plaintiffs.

WHEREFORE, the Plaintiffs demand judgment against lllinois Union as follows:

a. Awarding compensatory damages;

b. Awarding pre- and post-judgment interest;

c. Declaring that Connolly's interest in the Remaining Policy Limits, which has

been assigned to the Plaintiffs, is superior to that of Davises and Bergmarks;

d. Awarding the Plaintiffs their attorneys' fees, costs, and disbursements; and

e. Granting other such relief as this Court deems just and proper.

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TIDRDCOUNT

BAD FAITH, BREACH OF FIDUCIARY DUTY AND BREACH OF IMPLIED


COVENANT OF GOOD FAITH AND FAIR DEALING - PUNITIVE DAMAGES

34. The Plaintiffs repeat and reallege the allegations set forth in the preceding

Paragraphs of this Complaint with the same force and effect as if each were fully set forth at

length herein.

35. The lllinois Union Policy included an implied covenant of good faith and fair

dealing.

36. Connolly and/or Connolly Properties at all times relevant hereto performed any

and all duties and obligations under the lllinois Union Policy.

37. At all times relevant hereto, lllinois Union, by its acts and omissions, acted in bad

faith and breached its fiduciary duties and the covenant of good faith and fair dealing, including

but not limited to the following:

a. Prior to entry of the Underlying Judgment, the Plaintiffs offered to Connolly to

settle and resolve the claims asserted in the Underlying Litigation for an amount within the

remaining limits of the lllinois Union Policy, which offer Connolly promptly forwarded to

lllinois Union and demanded that lllinois Union resolve and settle the Plaintiffs' claims within

the limits of the lllinois Union Policy;

b. With knowledge of a strong likelihood that a judgment would be entered against

its insured Connolly for an amount in excess of the remaining limits on the lllinois Union Policy

based on conduct covered by the lllinois Union Policy, lllinois Union did not settle or resolve the

claim but instead placed its interests ahead of its insured's interests and continued to wrongfully

deny coverage and wrongfully and unreasonably refuse to settle; and

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c. With knowledge of a strong likelihood that a judgment would be entered against

its insured Connolly for an amount in excess of the remaining limits on the lllinois Union Policy

based on conduct covered by the lllinois Union Policy and with knowledge of multiple claimants

making claims against Connolly, which claims were also covered by the lllinois Union Policy,

who would also make claim to the remaining limits of the lllinois Union Policy, lllinois Union

did not even make any attempt to enter into settlement discussions with the Plaintiffs or other

claimants to explore if the case could be settled or resolved with all claimants for any amount

less than the remaining limits on the policy. Instead, lllinois Union placed its interests ahead of

its insured's interests and continued to wrongfully deny coverage and wrongfully and

unreasonably refuse to settle or even to explore settlement opportunities, all to the detriment of

its insured Connolly.

38. The acts and omissions of lllinois Union constitute bad faith, breach of fiduciary

duty and breach of the implied covenant of good faith and fair dealing.

39. As a direct and proximate result of lllinois Union's bad faith and the breach(es) of

its fiduciary duty and implied covenant of good faith and fair dealing, judgments were entered

against its insured Connolly for amounts in excess of the remaining limits on the lllinois Union

Policy, causing Connolly significant damages.

40. lllinois Union's bad faith and the breach(es) of its fiduciary duty and implied

covenant of good faith and fair dealing constitute sufficiently wrongful conduct to entitle its

insured Connolly to punitive damages.

41. Connolly assigned any and all claims for bad faith, breach of fiduciary duty and

breach of implied covenant of good faith and fair dealing and for extra-contractual claims, extra-

contractual damages and punitive damages to the Plaintiffs.

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WHEREFORE, the Plaintiffs demand judgment against lllinois Union as follows:

a. Awarding compensatory damages;

b. Awarding punitive damages;

c. Declaring that Connolly's interest in the Remaining Policy Limits, which has

been assigned to the Plaintiffs, is superior to that of the Davises and the Bergmarks;

d. Awarding pre-and post-judgment interest;

e. Awarding the Plaintiffs their attorneys' fees, costs, and disbursements; and

f. Granting such other relief as this Court deems just and proper.

FOURTH COUNT

DECLARATORY,lUDGMENT

42. The Plaintiffs repeat and reallege the allegations set forth in the preceding

Paragraphs of this Complaint with the same force and effect as if each were fully set forth at

length herein.

43. The only current property right or other right of Connolly in the Remaining Policy

Limits is his rights and cause of action against lllinois Union for coverage and for breach of

contract, breach of fiduciary duty, bad faith and breach of the covenant of good faith and fair

dealing ("Connolly Rights").

44. A creditor can secure an interest in such Connolly Rights by, among other things,

a legal proceeding to compel turn over of such rights and cause of action, which has not been

done by any party, or by Connolly assigning the Connolly Rights.

45. Connolly assigned the Connolly Rights (as well as any and all rights, claims and

causes of action for extra-contractual claims and punitive damages) to the Plaintiffs.

46. The Plaintiffs own all of the Connolly Rights.

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47. Any proceeding to attempt to enforce rights under the lllinois Policy, to turn over

the Remaining Policy Limits or to secure an interest in the Remaining Policy Limits requires

Connolly as an indispensable party. Any such proceeding in a jurisdiction which does have

personal jurisdiction over Connolly would be and is null and avoid for purposes of declaring

rights or priority to the Remaining Policy Limits.

48. The Plaintiffs' interest in the Remaining Policy Limits, by and through the

assignment of the Connolly Rights, is superior to the interest, if any, of the Davises and the

Bergmarks to such funds.

WHEREFORE, the Plaintiffs demand judgment against the Davises and the Bergmarks

as follows:

a. Declaring that the Plaintiffs have an interest in the Remaining Policy Limits;

b. Declaring that the Plaintiffs' interest in the Remaining Policy Limits is superior to

the interest, if any, of the Davises and the Bergmarks to such funds;

c. Awarding the Plaintiffs judgment in the amount of the Remaining Policy Limits;

d. Awarding the Plaintiffs their attorneys' fees, costs, and disbursements; and

e. Granting such other relief as this Court deems just and proper.

FIFTH COUNT

CONSTRUCTIVE TRUST

49. The Plaintiffs repeat and reallege the allegations set forth in the preceding

Paragraphs of this Complaint with the same force and effect as if each were fully set forth at

length herein.

50. The Underlying Judgment is a Loss covered under the lllinois Union Policy.

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51. As the Underlying Judgment is a Loss covered under the lllinois Union Policy,

lllinois Union must hold the Remaining Policy Limits in trust for the benefit of Connolly, whom

lllinois Union is obligated to indemnify.

52. lllinois Union is a constructive trustee of the Remaining Policy Limits for the

benefit of Connolly.

WHEREFORE, the Plaintiffs demand judgment against lllinois Union as follows:

a. Imposing a constructive trust on the Remaining Policy Limits for the benefit of

Connolly;

b. Awarding the Plaintiffs judgment in the amount of the Remaining Policy Limits;

c. Awarding the Plaintiffs their attorneys' fees, costs, and disbursements; and

d. Granting such other relief as this Court deems just and proper.

DEMAND FOR JURY TRIAL

The Plaintiffs demand a trial by jury.

Respectfully submitted,

DUGHI & HEWIT, P.C.,


Attorneys for Plaintiffs,
Edward P. Boykin, Phyllis A. Boykin,
Aziz S. Hasan, Carol A. Hasan,
Ronald K. Walker, and Jane C. Walker

By: Russell L. Hewit (RLH -- 3813)

Dughi & Hewit, P.c.


340 North Avenue
Cranford, New Jersey 07016
908.272.0200

Dated: January 19, 2011

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Exhibit A

Assignment Agreement

from

Connolly to the Boykin Parties

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ASSIGNMENT AGREEIHENT
This Assignment Agreement ("Assignment Agreement" or "Agreement") made this __

of December 2010, by and among David M. Connolly ("Connolly" or "Assignor"), on the one

hand, and Edwal'd Boykin, Phyllis Boykin, Aziz Ha.all, Carol Hasan, Ronald Walker and Jane

Walker (jointly "Boykin Plaintiffs" or "Assignee"), on the other hand,

WITNESSETH:

WHEREAS Connolly andlor Connolly P!'Operties, Inc. ("Connolly Properties")

purchased certain policies of insurance known as Business and Management Indemnity Policies

f!'Om Illinois Union Insurance Company ("Illinois Union"), including but not limited to policy

number BM120062 J63 (all policies of insurance issued by JIIinois Union to Connolly, including
,
both known andlor identified policies and policy number BMJ2OQ62163 as well as unidentified

andlor unknown policies are referred to jointly as "Illinois Union Policies"); and

WHEREAS the BoyJdn Plaintiffs asserted claims for damages a~d loss against Connolly,

including but nol.limited to claims asserted in a lawsuit entitled Edward P. Boykin el al. v.

Connolly Properties, Tnc" ct al. Civil Action No. 09-5267 (ORD), in the United States District

Court for the District of New Jersey ("Lawsuit"). which claims were and are covered under

Dlinojs Union Policies; and

WHEREAS Connolly timely tendered the claims to Illinois Union and demanded defense

and indemnity of the claims under the Illinois Union Policies, and Illinois Union provided

defense but not indemnity ot' the claims and reserved its rights to deny and wrongfully denied

coverage for indemnity and damages arising from these claims under the IIlinoi. [Jninn Policies

in breach of its contractual obligations; and

Assignmenl Agreement
Connolly and the Boykin Plaintiffs
Page I of9
476BOtOOO6 7lS077Sv2
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WHEREAS notwithstanding that the Boykin Plaintiffs' claims exceeded the limits of the

Illinois Union PCllicies, the Boykin Plaintiffs offered to Connolly to compromise. settle and

resolve the claims against Connolly for an amount within what Were the remaining limits of the

Illinois Union Policies, which offer would have avoided Connolly being exposed to damages in

excess of the Jimits of the Dlinois Union Poticies; and

WHEREAS Connolly communicated to flIinoi. Union the offer by the Boykin Plaintiffs

to seWe within the limits of the Illinois Union Policies and avoid damages in excess of the limits

of the Illinois Union Policies "nd consented [0 and requested that Illinois Union settle the claims

of the Boykin Plaintiffs for an amount within the remaining limits of the lIiinois Union Policies;

and

WHEREAS Illinois Union knew or should have known that there was an overwhelming

likelihood lhallhe Boykin Plaintiffs would obtain a judgment against Connolly for an amount in

excess of the limits of [he Diinois Policies' limits based Oil claims covered by the Illinois Union

Policies, yet refused to settle the claims of the Boykin Plaintiffs within the limits of its policies

and continued to wrongfully deny coverage for the claims for the Boykin Plaintiffs damages,

exposing Connolly to a high likelihood of a jUdgment in excess of policy limits in breach of

Illinois Union's fiduciary duty to Connolly as Connolly's insurer and in breach of' its duty of fair

dealing and good failh; ""d

WHEREAS in the Lawsuit, the district court entered an order granting the Boykin

Plaintiffs summary judgment against Connolly for $1,368,000 (the "Boykin Judgment" or

"Order'), un amount in excess of the rcnul.lniug limits of [he IlHnojs Union 'POliCies,

unnecessarily exposing Connolly to damages in eXcess oflhe limits of the rIlinois Union

Policies; and

Assignment Agreement
Connolly and [he Boykin PI.intiffs
Page2of9
4768010006 nsn77Sv2
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WHEREAS the Boykm Judgment also divested the Boykin Plaintiffs of their interests in

the Hillside Valley Investment Trust (the ''Trust'') and those interests reverted to Connolly; and

WHEREAS Connolly tendered the Boykin Judgment to Illinois Union for payment, and

lllinois Union has refused to pay the Boykin Judgment or the remaining limits of the Illinois

Union Policy in breach ofDlinois Union's fiduciary duty to Connolly as Connolly's insurer and

in breach of its duty of fair dealing and good faith, and Illinois Union continues to wrongfully

deny coverage for the claims of the Boykin Plaintiffs under the IllinoiS Union Policies; and

WHEREAS Connolly and the Boykin Plaintiffs have rCllched agreement on the terms of

Connolly' agreement to assign and transfer to the Boykin Plaintiffs any and aJl rights and claims

against BIinois Union (a) in any way related to, under or arising ftom breach of the Jilinois Union

Policies, (b) for coverage under the IllinOis Union Policies, (e) to any and all proceeds due under

the fIlinois Union Policies, (d) for extra-contractual damages, punitive damages and any and all

other available remedies and relief arising from or in breach of Illinois Union's fiduciary duty to
Connolly as Connolly's insurer and in breach of irs duty of fair dealing and good faith; and

WHEREAS, in addition to the assignments and transfers related If) the Illinois Union

Policies, Connolly also agrees to assign and transfer to the Boykin Plaintiffs the interests that the

Boykin Plaintiffs were divested of in the Trust under the terms of the Order; and

NOW, THEREFORF.. Connolly and the Boykin Plaintiffs agree to the following tonns

and conditions.

1. Recitations. The recitations in the WHEREAS clauses are incorporated into the

body of this Agreement"" rcpl'Cscntntions ortl.e parties.

2. Assignment of Insurance Hights. Connolly irrevocably assigns, transfers and

delivers to the Boykin Plaintiffs to the maximum extent permitted by law, outright and free of

Assignment Agreement
Connolly and the Boykin Plaintiffs
Page 3 of9
476SOIQC()(j 7lS0778v2
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any and all liens, clnims and encumbrances, any and all rights, claims, causes of action and

entitlements (u) to any and all proceeds due, payable or [0 be paid under the lIIinois Union

Policies, (b) to any and all claims for insurance coverage under the lIIinois Union Policies, (c) to

any and all claims arising from breach of the lllinois Union Policies, (d) to any and all claims for

extra-contractual damages. punitive damages lind any and all other available remedies and relief

arising from Illinois Union's breach of its fiduciary duty co Connolly us Connolly'S insurer

and/or arising froOl its breach of its duty of fair dealing and good faith (jointly. the "Assigned

Claims"). The Assigned Claims include any and all rights. claims, causes of accion and

entitlements arising from or relaled in any way to any claims Connolly had. has or may have

against Illinois Union for any reason.

3. Assignment of Interests in and to HUis/de. Connolly irrevocably assigns.

transfers and delivers to lhe Boykin Plaintiffs to the maximum extent permitted by law. outright

and free of any and all liens, any and all shares, membership interests. partnership interests.

ownership interests and any and ull claims. encumbrances. rights, causes of action and

entitlements previously owned or held by the Boykin Plaintiffs, which he received pursuant to

the (erms of the Order divesting Che Boykin Plaintiffs of their interests in the Trust ("Boykin

Hillside Interests").

4. k..,.rfion and Filing of Claims/Costs of Pursuing ASSigned Claims. The

Boykin Plaintiffs are authorized by ConnoUy to assen and prosecute. and shall assen and

prosecute, che Assigned Claims us assignee as though ConnoUy was asserting and prosecuting

the Assigned Claims in it, own righ' and name, and the Boykin Plamuf!s shall be solely entitled

to any recovery on the ASSigned Claims. In the event that formal litigation is filed, the Boykin

Plaintiffs shalI caption the case in the name of the Boykin Plaintiffs, individually and as assignee

Assignment Agreement
Connolly and the Boykin Plaintiffs
Page4of9
476&0l0006 725077Rv2
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of Connolly and shall also recite In tile pleadings that the Assigned Claims have been assigned

by Connolly to the Boykin Plaintiffs,

The Boykin Plaintiffs shall be solely responsible for the costs, including but not limited

to attorneys fees and expenses and costs, incun'ed in asserting and prosecuting the Assigned

Claims,

5. Representations of Connolly. Connolly represents and warrants that (1) he owns

the Assigned Claims, he bas not released tile Assigned Claims lind he has the right and authority

to assign and transfer the Assigned Claims and the Boykin Hillside Interests to the Boykin

Plaintiffs, and (2) he has not assigned, pledged, transferred or otherwise encumbered any of the

Assigned Claims and the Boykin Hillside Interests and he assigns them to the Boykin Plaintiffs

free and cleur of any and all liens, claims and encumbmnces of any third partiers, Connolly shall

not assign or transfer to any other persons or entities the Assigned Claims or the Boykin Hillside

Interests and shall not assign to any other persons or entities any other rights or claims (a) to any

proceeds due, payable or to be paid under the Illinois Union Policies, (b) for any other claims for

insur-dnce coverage under the Illinois Union Policies, (c) for any other claim~ ",ising from breach

of the Illinois Union Policies, Cd) for any other claims for extra-contractual damages, punitive

damages or any other available remedies or relief against Illinois Union for any reason or (e) to

the Boykin Hillside Interests,

Connolly represents and wan'ants that he has no assets or income, and that he has no

current right or entitlement to future assets or income, except as expressly listed in his Asset

Disclosures he previously disclosed to the Doykin Plaintiffs, ConnOJlyrecognlzes,underslands

and agrees that if there is a misrepresentation in his Asset Disclosures that the Agreement to look

to Illinois Union and the Boykin Hillside Interests for relief and not to pursue relief from

Assignment Agreement
Connolly and the Boykin Plaintiffs
PageS of9
4i6RnJOQOG 1250719v2
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Connully as set forth In paragraph 7 shall be void and unenforceable and thaI the Boykin

Plaintiffs shall have the right to pursue recovery from Connolly.

6, CooperaliolL Connolly shall cooperate with the Boykin Plaintiffs in the

prosecution of the ASSigned Claims, including but not Umited to (1) providing the Boykin

Plaintiffs and/or their attorneys and representatives with access to and copies of books, records,

documents, data, storage media, communications and other materials, whether created or stored

in hard copy or electronic or computer format, relevant to the Assigned Claims, (2) authorizing

and insl.nlcling his employees or employees of entities under his control, with relevant

knowledge about the Assigned Claims to meet with the Boykin Plaintiffs and/or their attorneys

and representatives upon reasonable notice and at reasonable times, in order to respond to

discovery requests and to prepare and prosecute the Assigned Claims, and (3) cooperating in the

scheduling and appearance at deposition, heating, arbitration or trial and, in such event, to meet

with the Boykin Plaintiffs and/or their attorneys and representatives to prepare for such

deposition, hearing, arbitration or trial.

In the event Connolly is contacted by Illinois Union or persons acting on it.. bebalf or is

contacted by any person concerning or related to the Assigned Claims, Connolly shall make no

comment about the Assigned Claims and shall refer any such persons to the Boykin Plaintiffs.

Connolly shall not provide any docllments or wlitings concerning the Assigned Claims to any

persons, except in response to valid subpoena or COUlt order and, even then, only after first

providing copies to the Boykin Plaintiffs and/or his attorneys and a reasonable opportunity to

review prior to production, nor shall Connolly discu"s ur ,-,ummem on the Assigned Claims, in

writing or orally, to any other person, excluding, his lawyers, tax advisors and spouse, except in

the presences of the Boykin Plaintiffs or their attorneys.

Assignment Agreement
Connolly and the Boykin Plaintiffs
Page 60f9
,(768010006 7250718v2
Case 2:11-cv-00326-SRC -MAS Document 1 Filed 01/19/11 Page 20 of 22 PageID: 20

7. Agreement to Look to Illinois Union and Hillside Interests Only for Relief.

The Boykin Plalntiffs agree that they shall not seek relief or recovery from Connolly with regard

to any and all claims against Connolly asserted in Ihe Lawsuit amI/or to which they are entitled

under the Boykin Plaintiffs' Judgment. but shall limit their recovery solely to what they receive

from !IIinois Union and the Hillside Inrcresl,. To the extent that the Boykin Plaintiffs can

release any and all chlims against Connolly asserted in the Lawsuit and to which they are entitled

underthe Boykin Plaintiffs' Judgment without impairing or limiting in any way Connolly's

rights and claims against lIlinois Union (which have been assigned to the Boykin Plaintiffs)

and/or the Boykin Plaintiffs' rights and claims against Illinois Union pursuant to the Assigned

Claims. d,CY release such claims against Connolly. If, however. for any reason, such a release

impairs or limits in any way the rights and claims of the Boykin Plaintiffs against IllinOis Union

pursuant to the ASSigned Claims, then they do not release Connolly, but agree to look solely to

Illinois Union and the Boykin flillside Interests for relief and recovery. The Boykin Plaintiffs

further agree that they will not seek ta collcct or recover manies or payment of the judgment

from Connolly but will look to Illinois Union to satisfy the judgment.. IJpon resolution of the

Assigned Claims with Illinois Union, by way of verdict, court order or settlement, the Boykin

Plaintiffs will execute and provide to Connolly a warrant to satisfy judgment.

A. Authority. Connolly has the full right and authOlity to assign and transfer 10 the

Boykin Plaintiffs the Assigned Claims and the Boykin Hillside Interest.

B. Binding. This Assignment Agrc:ement is binding upon and shaJl inure to the

benefit of the parties and their successors and assigns.

Assignment Agreement
Connolly and the Boykin Plaintiffs
Page 7 of9
47680101106 nS017Bv2
Case 2:11-cv-00326-SRC -MAS Document 1 Filed 01/19/11 Page 21 of 22 PageID: 21

C. Entire Agreement. Tlus Assignment Agreement is the entire agreement between

the parties and there are no oral agreements. This Assignment Agreement represents the

complete understanding between the parties and supersedes nny and all previous negotiations,

represenrations or agreemenrs as to the subject matter of this Assignment Agreement. This


Assignment Agreement may nO[ be amended except by a written instrument signed by all parties.

D. Preservation of Agreement. If a court or other hearing officer of competent

jurisdiction holds any part of this Agreement to be invalid or unenforceable, the remainder of the

Assignment Agreement shall remain in full force and effect.

E. Countcmarts. This Assignment Agreement mny be signed in counterparts, each

of which is deemed nn original, and all of which taken together constitute one and the same

agreement.

F. Additional Documents. The Parties agree to execute and deliver to each other

any documents reasonably necessary to effectuate the terms of this Assignment Agreement.

G. New Jersey Law. The law of the State of New Jersey shall apply in the

interpretation and enforcement of this Assignment Agreement without regard to choice of law

principles.

H. Signatory for Boykin Plaintiffs. Louis Modugno, attorney for the Boykin

Plaintiffs. is authorized to sign thi~ A..ignment Agreement on behalf of each and everyone of

the Boykin Plaintiffs and to bind them to the terms of this Assignment Agreement.

The NOW, THEREFORE, clause and signature pnge is the next immediate page.]

ASSignment Agreemclu
Connolly and Ihe Boykin Plointilfs
Page 8 019
4768WOOO67'J.S071BIlZ
Case 2:11-cv-00326-SRC -MAS Document 1 Filed 01/19/11 Page 22 of 22 PageID: 22

NOW, THEREFORE, David M. Connolly, on the one hand, and Edward Boykin, Phyllis

Boykin, Azi.2. Hasan, Carol Hasan, Ronald Walker and Jane Walker, by and through their

attorney, Louis Modugno, on the other hand, sign this Assignment Agreement intending to be

legally bound by all of its terms and conditions.

ASSIGNORS;

DAVID M. CONNOLLY

David M. Connolly, Individually


Dated: December &, 2010

ASSIGNEES:

LOUIS MODUGNO,
ATIORNEY FOR AND ON BEHALF OF
EDWARD BOYKIN, PHYLLIS BOYKlN,
AZIZ HASAl'l, CAROL HASAN,
RONALD ~ALKER, ANI}1ANB WALKER
/1-:/~
,'/"
J ~
Louiii Modugno, AltoOley for and on
behalf of Edward Boykin, Phyllis
Boykin, Aziz Hasan, Carol Hasan,
Ronald Walker, and Jane Walker
.p,ll- : ;C,""i ?, .)011

Assignment Agreement
Connolly alld the Boykin Plaintiffs
Page 9 of9
4768010006 72S07']S ...;l