A Delaware court refused to reach conclusions on key issues in complex directors and civil liability officials involving Dole Food Co. Inc. and its over-insurer on the question of whether insurance companies must finance two settlements.
In 2013, David H. Murdock, who owned 40% of Westlake Village, California-based Dole Food Co.'s stock, used an acquisition vehicle to acquire his remaining shares, according to Tuesday's decision by the Delaware Superior Court in Wilmington in Arch Insurance Co. et al v. David H. Murdock, Dole Food Co. Inc. and DFC Holdings LLC.
Herr. Murdock paid the shareholders $ 13.50 per share in the acquisition, which was closed in November 201
Six of the insurance companies that had provided excess D&O insurance to Dole over $ 15 million in primary coverage – Arch, Liberty Mutual Insurance Companies, Continental Casualty Insurance Co., Navigators Insurance Co. , RSUI Indemnity Co. and Berkley Insurance Co. – had not given written written consent to the settlements.
The insurers brought trial and applied for a declaratory judgment that they had no obligation to pay for the settlement according to the terms of the policy. The defendants filed counterclaims on issues including that the insurance companies had violated their policy by refusing to pay for the settlements.
In its judgment, the court agreed with the defendants that the settlement payments constituted a loss under the policy, even though it said this "Does not mean that issues of allocation and exhaustion have also been established."
The judgment also argued that a summary judgment is excluded on the question whether the accused have violated the D & O's written consent and co-operation clause because of "genuine material matter fact."
"Based on the record presented to the court in the justifications is the question of whether the insurers unreasonably kept their consent "to the settlements, they said.
"First, the defendants must show that they have requested the assurance of the insurers. Then a trier-of-fact must state that the insurance companies did not have a reasonable basis for holding their consent." It is not enough for the parties to show that the settlement offer was reasonable ", The court says with reference to an earlier case.
"It seems to be essential whether there was a substantial violation of the co-operation clause," the verdict says. "The respondents do not seem to dispute that they refused to request basic information on the settlement discussions."  "But the defendants claim that the documents they did not produce are covered by the lawyer's privilege or working document or the work of product doctrine or unreasonably requested. "
" The court will consider how to present the question "on the cooperation clause in negotiation procedures," the court said.
Lawyers in the case could not be reached or commented.