The Delaware Supreme Court's recent ruling in favor of carriers in a $20 million directors and officers insurance case serves as another warning to policyholders that having their coverage disputes heard under the First State's laws doesn't always guarantee success, legal experts say.
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"Stillwater is a reminder that the pro-policyholder trend in Delaware — or really any jurisdiction — is not a blanket rule, and it's a reminder that judges decide cases based on the facts and circumstances before them," said Raymond Mascia Jr., a shareholder in Anderson Kill PC's insurance recovery practice.
Mascia noted that Stillwater was unlucky because when it originally filed its suit, the Delaware Superior Court had issued a first-of-its-kind ruling that Solera Holdings Inc. had coverage under its D&O policies for underlying appraisal actions. The Delaware Supreme Court reversed that holding in the middle of Stillwater's litigation with its insurers, putting the mining company in a bind.
"This is a unique set of circumstances, and I think that Stillwater was dealt a very difficult hand," Mascia said.
Mascia doesn't believe that the Solera ruling stands for the proposition that appraisal actions can never be covered with D&O insurance under Delaware law, but he noted that Stillwater faced an uphill battle because the wording of its policy was similar to the policy at issue in Solera.
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