INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
In search of defense costs
Ferrellgas Partners L.P. and its subsidiaries had a claims-made policy with Zurich American Insurance Company that included a provision for the advancement of defense costs for litigation. Ferrellgas was involved in a separate lawsuit with Eddystone Rail Company, LLC, over a breach of contract. Ferrellgas sought to have Zurich cover the defense costs for the Eddystone litigation.
In the Superior Court of the State of Delaware, Ferrellgas filed a motion for summary judgment that sought a declaratory relief that obligated Zurich to advance defense costs for the Eddystone litigation. Zurich also filed a motion for summary judgment that sought a declaration that it had no obligation to advance defense costs.
The Superior Court denied Ferrell-gas’s motion and granted Zurich’s motion, finding that the Eddystone litigation was excluded from coverage under the policy. Ferrellgas appealed.
On appeal, Ferrellgas argued that the Superior Court erred by holding that Zurich had no duty to advance defense costs for Ferrellgas’s underlying litigation because the first amended complaint of Eddystone Rail Company, LLC (the plaintiff in the underlying litigation), did not allege loss that fell within the scope of coverage of the policy that Zurich issued to nonparty Bridger, LLC. The essence of Ferrellgas’s argument was that the Eddystone litigation was a claim for wrongful acts that occurred before June 24, 2015, a date contained in an exclusion that provided that Zurich had no duty to advance defense costs for claims that arose from wrongful acts that occurred after June 24, 2015.
The Supreme Court of the State of Delaware affirmed the decision of the Superior Court. The court found that the Eddystone litigation was a claim that sought relief for a breach of contract that occurred after the commencement of the policy’s run-off coverage period. As such, Zurich had no duty to advance defense costs for this matter.
Ferrellgas Partners, L.P., v. Zurich American Insurance Company—Supreme Court of the State of Delaware—No. N19C-05-275—June 10, 2024.
