MEMORANDUM OPINION AND ORDER The plaintiffs, Atos Syntel Inc., Syntel Holding (Mauritius) Ltd., and Syntel LLC (collectively, “Syntel”), brought this action against the defendant, Ironshore Indemnity Inc. (“Ironshore”), for declaratory judgment and breach of contract in connection with an insurance coverage dispute. The defendant now moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the defendant’s motion to dismiss is denied. I. The following facts are taken from the complaint and the documents referenced and relied on in the complaint, and are accepted as true for the purposes of this motion. Syntel is a provider of information technology services. Compl. 12, ECF No. 1.1 To cover the period of October 8, 2014, through October 8, 2015, Syntel purchased Errors & Omissions (“E&O”) insurance in the amount of $25 million. Id. 13. Continental Casualty Company (“CNA”) provided the first $10 million in coverage under a primary claims-made policy (the “CNA Policy”). Id. 14. As relevant here, the CNA Policy protected against “Technology and Professional Liability,” including the costs of liability and defense arising from alleged “wrongful acts” committed while providing “Information Technology Services.” Id. 15. “Information Technology Services” was defined to include, among other things, “designing, developing, programming, writing, testing, installing, servicing, supporting, maintaining, repairing and updating software, including any modification and reengineering and providing training, updates and support.” Id.; Def.’s Mot. to Dismiss Ex. 2, at 14, ECF No. 25-3 (“CNA Contract”). With respect to such liability coverage, “wrongful act” was defined as “any actual or alleged act, error or omission” that was “committed solely in the conduct of Professional Services or Technology Services for others” or “resulting in the failure of the Insured’s Technology Products to perform the function or serve the purpose intended.” CNA Contract at 15. In addition to the foregoing, the CNA Policy protected against “Media Liability.” Id. at 5. As to Media Liability only, “wrongful act” included common law torts, including “infringement of copyright or any…misappropriation of ideas under implied contract or other misappropriation of property rights, ideas or information.” Id. at 15-16. The CNA Policy also included several exclusions from coverage, id. at 16-20, and provided that, in the event that more than one coverage category applied, the “maximum total retention amount applicable [would] be the highest of such applicable [amounts],” id. at 22. The next $10 million in coverage that Syntel purchased was issued in Michigan by the defendant, Ironshore, under a first-layer excess policy (the “Ironshore Policy”). Compl. 16. The Ironshore Policy expressly provided that it would mirror the terms (that is, “follow the form”) of the CNA Policy with one relevant exception: it included a “Non-Follow Form Endorsement” providing that it would “not follow the form of [the] Media Coverage [section].” Def.’s Mot. to Dismiss Ex. 1, at 8, ECF No. 25-2 (“Ironshore Contract”). Accordingly, Ironshore was not “obligated to pay any loss arising from a wrongful act or related wrongful acts as may be insured by reason of” that section. Id. “Related wrongful acts” were defined, as per the underlying CNA Contract, as all wrongful acts “that are logically or causally connected by any common fact, circumstance, situation, transaction, event, advice or decision.” CNA Contract at 13. “All other terms, conditions and exclusions remain[ed] unchanged.” Ironshore Contract at 8. On January 12, 2015, Syntel filed a lawsuit against The TriZetto Group (“TriZetto”). Compl. 20. In response, TriZetto asserted counterclaims against Syntel for misappropriation of trade secrets under New York law, misappropriation of trade secrets under the federal Defend Trade Secrets Act, and copyright infringement under federal law. Id.
