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Note: Axiom Insurance Managers Agency, LLC (Plaintiff) made a settlement agreement with its competitor, Indemnity Insurance Corporation, Risk Retention Group (Defendant), agreeing to release Defendant "of and from any and all actual or potential claims, demands, damages, liabilities, rights, causes of action, rights of action...and remedies of each and every kind or nature whatsoever...that [Plaintiff] had, may have had, or now has...predating the execution of this Agreement."

Plaintiff later filed a lawsuit and amended complaint alleging that Defendant had filed frivolous lawsuits against Plaintiff and had disseminated falsified financial information regarding Plaintiff to insurance regulators and other entities, thereby breaching their settlement agreement. Plaintiff further alleged that Defendant committed fraud on insurance regulators by claiming that it was financially sound and entitled to a superior credit rating through a fabricated standby letter of credit in the amount of US$ 47,000,000 when it was not.

Defendant moved to dismiss the complaint on the grounds that it violated the terms of the settlement agreement, and filed a separate motion for sanctions. The U.S. District Court for the Northern District of Illinois, Eastern Division, Eve, J., dismissed Plaintiff's request for a declaration that Defendant had breached the settlement agreement and Plaintiff had not breached it, and per Plaintiff's request, dismissed its claim for tortious interference. The Judge granted in part and denied in part Defendant's motion to dismiss Plaintiff's claim, and dismissed Defendant's motion for sanctions.

The Judge noted that because some of Plaintiff's claims do not predate the settlement agreement between the parties and Plaintiff was not required to "plead all the specific details underlying an alleged breach of contract to state a claim [of defamation]," all of Plaintiff's claims were not barred. The Judge also ruled that because Plaintiff's claims were not frivolous, Defendant was not entitled to sanctions.

[JEB/chy]

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