301 A.3d 1194
Del. Super. Ct.2023Background
- This coverage dispute concerns nine representative opioid lawsuits naming CVS: two MDL "Track One" bellwether suits (Summit and Cuyahoga) and seven "Additional Representative" suits (including Lake, Trumbull, Nassau, Suffolk, Cherokee Nation, Philadelphia, and Florida).
- CVS seeks defense and indemnity under 229 liability policies issued by Chubb, AIG, and numerous Joining Insurers; policies cover sums insured for "damages because of bodily injury" or "property damage" caused by an "occurrence."
- The underlying governmental complaints seek generalized economic losses and abatement costs incurred in responding to the opioid crisis (not individualized claims for physical injury or wrongful death of specific persons).
- The Delaware Supreme Court's decision in Ace Am. Ins. Co. v. Rite Aid Corp., 270 A.3d 239 (Del. 2022), held that similar governmental opioid suits seeking non‑derivative economic relief are not claims for "damages because of bodily injury." The insurers invoke Rite Aid here.
- CVS argued Rhode Island law applies, urged that Pharmacist/Druggist endorsements broaden coverage, and contended certain property‑damage or derivative theories trigger coverage; insurers sought partial summary judgment that they owe no duty to defend or indemnify.
- The Superior Court applied Delaware law, held Rite Aid controls, and granted the insurers' and joining insurers' motions: no duty to defend and no duty to indemnify for the nine representative suits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law | Rhode Island law should govern and may be more favorable to CVS | No meaningful conflict; apply Delaware law and Rite Aid precedent | Delaware law applies; CVS failed to show an actual conflict so Rite Aid controls |
| Duty to defend — Track One (Summit & Cuyahoga) | Complaints assert costs for treating injured persons and thus seek damages "because of bodily injury" | Complaints seek generalized governmental economic losses, not individualized bodily‑injury claims | No duty to defend; Track One suits do not allege damages "because of bodily injury" under Rite Aid |
| Duty to defend — Additional Representative Suits | Some suits contain county‑specific treatment and cost data that trigger coverage | These allegations only illustrate aggregate economic loss and are not predicate individualized injury claims | No duty to defend; Additional suits likewise seek generalized economic abatement costs and are not covered |
| Pharmacist/Druggist endorsements | Endorsements broaden coverage by treating pharmacist services as occurrences and thus trigger coverage | Endorsements only modify the "occurrence" element; they do not eliminate the threshold requirement that claims seek damages "because of bodily injury" | Endorsements irrelevant; threshold of damages "because of bodily injury" not met, so endorsements do not create coverage |
| Property‑damage theories | Allegations of property blight and related costs trigger property‑damage coverage | Economic losses are attenuated from any specific property damage and thus do not qualify as "damages because of property damage" | No coverage on property‑damage theory; claimed losses are purely economic/attenuated and not the requisite property damage |
| Duty to indemnify / timing | Indemnity should be premature; factual development may reveal covered individual injuries | If no duty to defend exists and complaints cannot be transformed, no indemnity obligation arises | No duty to indemnify; nothing in these complaints can plausibly be developed into covered bodily‑injury or property‑damage claims |
Key Cases Cited
- Ace Am. Ins. Co. v. Rite Aid Corp., 270 A.3d 239 (Del. 2022) (Delaware Supreme Court: governmental opioid suits seeking generalized economic losses are not "damages because of bodily injury").
- ConAgra Foods, Inc. v. Lexington Ins. Co., 21 A.3d 62 (Del. 2011) (duty to defend is broader than duty to indemnify).
- West Nat'l Ins. Co. v. Quest Pharm., 57 F.4th 558 (6th Cir. 2023) (economic losses too attenuated from specific property damage to trigger coverage).
- Lenning v. Commercial Union Ins. Co., 260 F.3d 574 (6th Cir. 2001) (discussing limits on recovery "because of" property damage where losses are primarily economic).
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (Delaware applies objective contract interpretation to insurance policies).