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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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DuPont awarded partial summary judgment in insurance-civerage litigation relating to polybutylene piping
Posted In Business InsuranceE.I. du Pont de Nemours & Company v. Allstate Insurance, Co., C.A. No. 99C-12-253 JTV, 2006 WL 2338045 (Del. Super. Ct. July 31, 2006). DuPont sued its excess insurance carriers for declaratory relief and damages in connection with a number of class-action lawsuits over the past 20 relating to polybutylene ("PB") piping. DuPont claimed that the defendant carriers were obligated under the terms of their respective policies to indemnify DuPont for liabilities arising from the sale of a product produced by DuPont and used by several other companies to make acetal fittings for polybutylene piping. As of this opinion, those liabilities totaled more than $235 million. Following discovery, the court granted DuPont's motion for summary judgment on several issues. First, the court found that defendants are liable up to the respective limits of liability for that amount of PB-related liabilities incurred by DuPont that are attributable to claims involving installations taking place during the 1983, 1984 and 1985 policy years. Second, DuPont had entered into a settlement agreement with another producer of PB products under which DuPont agreed to pay 10% and the second company agreed to pay 90% of all PB claims relating to either companies' products. This settlement was made as a matter of practicality because the two companies' PB products were almost indistinguishable after the fact and was based on each company's respective market share. The court ruled over the defendants' objection that all of DuPont's PB-related costs and liabilities incurred under that formula are on account of the sale of its product and not on account of any other entity's product, and that all such costs and liabilities were covered under the policies at issue. Third, the court rejected defendants' claim that they should receive a credit or set off in connection with settlements that DuPont negotiated with certain other insurance carriers. The court stated the fact that DuPont has presented claims to one insurer or even entered into a settlement agreement with respect to claims does not prevent it from pursuing those same claims against another liability insurer, except that DuPont may not recover more than its total claims. Fourth, the court rejected Defendants' argument that DuPont's attorneys' fees in the various class action suits should be spread proportionally over the various policy years, finding that attempting to break those expenses down in any principled way would be an impossible task.