Two insurance companies are suing a Texas corporation in an attempt to clear their duties to indemnify and cover an IT consulting firm in an underlying lawsuit.

Hartford Fire Insurance Company and Hartford Casualty Insurance Company filed a complaint Oct. 20 in the Houston Division for the Southern District of Texas against Accudata Systems, alleging the plaintiffs should not have to indemnify the defendants in an underlying suit and settlement.

This complaint arises from an underlying lawsuit in December 2009 styled Function One Consulting Group v. Accudata Systems Inc., in which the parties settled in March 2014 and Accudata agreed to pay $7 million.

In August 2015, the suit says, Accudata sent a letter to Hartford seeking defense and settlement costs in connection with the underlying suit, but at no time prior to this letter had Accudata provided notice of the lawsuit to Hartford Fire or Hartford Casualty, nor request consent from Hartford Fire or Hartford Casualty regarding its settlement payment to Function One.

The complaint alleges these failures are a breach of the notice provision and the settlement-without-consent provision of the Hartford coverage policies with Accudata.

The plaintiffs seek a judgment declaring they are not required to pay defense costs that Accudata incurred in the underlying suit or to indemnify Accudata, plus attorney fees and court costs. They are are represented by attorney Christine Kirchner of Chamberlain, Hrdlicka, White, Williams & Aughtry in Houston.

Houston Division for the Southern District of Texas case number 4:15-cv-03090.

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