Delaware Business Litigation Report

Superior Court CCLD Denies Bad Faith Counterclaim Against Insurance Companies

Arch Insurance Co. v. Murdock, C.A. No. N16C-01-104 (EMD) (CCLD) (Del. Super. May 1, 2019).

 In this matter between Dole Food Company and its Insurers, Dole sought coverage under their D&O policies for two underlying cases in the Court of Chancery and the District Court for the District of Delaware.  The Insurers refused coverage and filed this declaratory judgment action.  The Complex Commercial Litigation Division of Delaware’s Superior Court granted summary judgment in favor of the Insurers as to Dole’s counterclaim that the Insurers had breached the implied covenant of good faith and fair dealing in denying coverage.  Despite disputed facts, the Court held that it should not submit the question of bad faith refusal to pay Dole’s claims to a jury because the Insurers had reasonable grounds for relying on their defenses to liability.  The Court found that the Insurers had several well-reasoned arguments for denying coverage based on various clauses contained in the insurance policies, including the Fraud Exclusion, the Written Consent Provision, and the Cooperation Clause.

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