Delaware courts emphasize jurisdiction over D&O insurance disputes | PropertyCasualty360

“From a decision of law point of view, this reaffirms Delaware court decisions regarding Delaware’s strong ability to apply its law to D&O insurance disputes,” said Carolyn Rosenberg, a partner in Reed Smith’s insurance restructuring division. (love photo)

Delaware law applies when determining whether insurers are required to provide directors and officers with liability coverage, the Fourth Circuit ruled. State Supreme Court affirms Supreme Court decision in favor of insurers.

Of the thought refer to two other recent Supreme Court decisions that have addressed D&O insurance disputes, four clarifying the role of Delaware law in D&O coverage contracts. The decision was given on January 12.

“What comes from the idea is a strong commitment to sustainability,” said Carolyn Rosenberg, a partner in Reed Smith’s insurance recovery group. “Delaware law will be broadly applicable with respect to media disputes brought in Delaware.”

The applicant, Montana-based Delaware company Stillwater Mining Co., owned D&O and National Union Fire Insurance Co., along with ACE American Insurance and QBE Insurance Corp. better insurance. Stillwater shareholders filed the underlying insurance dispute in the Court of Chancery after the company was taken into receivership in 2017, claiming that Stillwater’s management supported an unfair practice of the sale-a claim found by the court was not approved.

National Union later said it would not pay the insurance premiums and interest earned during the appraisal, and Stillwater filed suit against the insurers in Superior Court.

During the course of the case, Stillwater changed the position that state law should be applied, arguing for Delaware’s law before reversing course and arguing that Montana was more favorable.

The change coincided with the Supreme Court’s reversal of a different decision by the Supreme Court in the D&O coverage trial for Solera Holdings Inc., which involved both parties in the Stillwater case that said same as Stillwater’s D&O.

Stillwater filed its case in Montana state court after the Supreme Court reversed Solera’s decision. Both Delaware courts found that although they did not fully favor the amendment, Stillwater’s amended petitions were similar enough to decide which way Delaware law applied.

The Supreme Court accepted the request of the insurers to dismiss the case, applying the decision of the Supreme Court in 2021 RSUI Indemnity Co. v. Murdock to determine which Delaware law should apply because Delaware is the most relevant D&O policy, then make a decision based on the change of the Supreme Court in 2020 in a case brought by Solera Holdings Co. Stillwater’s D&O was not used in the review proceedings.

With that thought, the court turned back to the first position that was set Murdock, investigating the application of the laws of several states to the same contractual matter is very difficult and slows down the settlement of insurance claims.

“From a choice of law perspective, it reaffirms Delaware court decisions regarding Delaware’s strong ability to apply its law to fe D&O insurance differences,” Rosenberg said.

The lawyers who represented the parties in the High Court case did not respond or refused to give a statement on the decision.


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