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Fourth, the so-called “malpractice” count is defective for several reasons. As an

initial matter, Trenwick America has no right to bring a malpractice claim against

advisors who worked solely for Trenwick. Any right to bring such a claim belongs to

Trenwick as the client and not to its wholly-owned subsidiary. Thus, as to Baker &

McKenzie, Ernst & Young, and Milliman, the claim fails because Trenwick was their

client. I do not base my dismissal decision on this ground as to defendant

PriceWaterhouseCoopers, which was engaged to audit not only Trenwick, but Trenwick


Next, the malpractice claims fail to plead facts supporting an inference that the

defendant advisors breached the standard of professional care owed by them. For

example, as to defendant Milliman, an actuarial firm, the complaint simply states that

Milliman’s estimate that Chartwell’s reserves at the time of its acquisition would be

sufficient, when supplemented with $100 million in additional coverage, was wrong. The

inflammatory allegations that Milliman must have known they were wrong or

manipulated its certification are entirely conclusory and are not accompanied by factual

context giving rise to the odor of purposeful wrongdoing or professional slack.148

Notably, the Litigation Trust has not pled that Milliman warranted that if its estimates

were wrong, it would be strictly liable. Indeed, to the contrary, the public documents the

complaint draws upon contain heavy caveats regarding these estimates.149 In addition, as

the Second Circuit recognized, regardless of the actuarial method used, calculations of

148 149 Compl. ¶¶ 80, 86, 121, 137. , Hefter Decl. Ex. A, at 12-13 (Trenwick 10-K, Amd. No. 1, filed Aug. 22, 2000); Hefter Decl. Ex. C, at 10-12 (Trenwick 10-K filed Mar. 30, 2000).


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