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.
"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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