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Delaware Supreme Court rules in favor of Chubb entities in Rite-Aid case



The Supreme Court of Delaware on Monday changed a lower court and ruled that Chubb Ltd. units are not obligated to defend Rite Aid Corp. in opioid disputes filed by two Ohio counties.

Rite Aid units have been named. in more than a thousand lawsuits from government entities, third-party health care providers, and individuals seeking damages for costs incurred as a result of the company's distribution of opioids.

The focus of Monday's ruling was so-called "Track One" lawsuits filed by government agencies.

A 2015 policy issued by Chubb entities states that it will pay sums that the insured will be legally obligated to pay as damages due of "personal injury" or "property damage", according to the judgment of Ace America Insurance Co. et al. v. Rite Aid Corp. et al.

Camp Hill, Pennsylvania-based Rite Aid sought defense coverage for lawsuits filed against it by Cuyahoga and Summit counties in Ohio, the Supreme Court ruling. The counties' lawsuits "expressly reject claims for personal injury and seek only their own financial damages," the ruling said.

The Delaware Superior Court ruled in September 2020 that Chubb was required to defend the drug chain "because there was undoubtedly a causal link between the county's economic damage and the damage to its citizens from the opioid epidemic," the Supreme Court ruled.

A majority of Delaware's Supreme Court "In order to recover under the insured's insurance as a person or organization directly caring for or treating the injured party, plaintiffs must prove the costs of caring for the individual's personal injury," the judgment said.

"Here , plaintiffs, state entities, attempted to recover only their own financial damages, and specifically waive recovery for personal injury or specific treatment damage.

"Thus, the carriers did not have an obligation to defend Rite Aid under the applicable insurance," the statement said by overturning the lower court and held that Chubb had no obligation to defend Rite Aid.

The dissenting opinion said that Chubb's obligation to defend is broader

"I would think that Rite Aid's policy provides coverage for some of the damages that the counties requested, at least potentially," and confirms the lower court's decision, it said.

Actors in the case did not respond on requests for comment.


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