*1 62 60(b)(6) satisfied. offender statute were driving of Rule application court’s
the trial by filing peti- Nor does she claim here. presented in the circumstances her, in abu- engaged the State against tion pro- court’s litigation Common or misuse of the Application B. sive of of Thus, impose 11 a Rule no basis existed Pleas Civil cess.53 Rule 11 sanction. claims that the Finally, Anderson of authority under Court trial court had CONCLUSION 11 to vacate its Pleas Rule Civil
Common a for State’s order as sanction earlier reasons, judgment foregoing For the claim also lacks This misrepresentation. is affirmed. of the merit. that: pertinently provides Rule 11 include, may consist of or
the sanction nature, nonmonetary an of a directives or, Court, if penalty a into order on motion and warranted imposed deterrence, directing an order effective FOODS, INC., Plaintiff CONAGRA of some or all of payment to the movant Below-Appellant, attorney’s fees and other the reasonable of incurred as a direct result expenses v. the violation.50 CO., LEXINGTON INSURANCE 11 that the trial Nothing suggests Rule Below-Appellee. Defendant order, thereby may vacate an earlier court 227, No. proceeding, in a of the
resulting dismissal party’s alleged for a violation sanction Supreme Court of Delaware. of that Rule.51 7, 2011. April Submitted: appropriate 11 are Rule sanctions 28, 2011. April Decided: frivo punish bringing to deter and 17, Rehearing Denied June Those circum lous or meritless claims.52 here. implicated stances were dispute does not that all the
Anderson
the habitual
statutory requirements of
Inc.,
11(c).
Appeal
Infotechnology,
582
In re
50. Del. Ct. Com. Pl. Civ. R.
215,
(Del. 1990);
v.
221
see also Shahin
A.2d
the Federal Rules of Civil Procedure
51. Under
Union,
Credit
ConAgra. consumers have sued purchased had an insurance
policy DefendanWBelow/Appellee, from (“Lexington”), Insurance Co. personal injury against insure itself claims products. contamination of its ConAgra sought coverage poli- under that coverage. ConAgra denied cy. Lexington have different views on the policy pro- extent to which the insurance coverage they interpret because vides James, Esquire, E. of Potter in that called the “lot or provision John LLP, Corroon, Wilmington, provision differently. For insur- Anderson & batch” (ar- DE; purposes, M. a “lot coverage Of Jonathan Cohen ance or batch” Counsel: E. gued) Copley, Esquires, may operate group and William of to treat as a provision D.C., Gilbert, LLP, Washington, Ap- for all insurance claims that arise out of the pellant. products. ConAgra batch of same lot or provision that the “lot or batch” contends Brown, Kraft, Paul D. Denise Seastone expand coverage serves to and does not Porterfield, Esquires, M. of Ed- Aleine “occurrence,” single where there is LLP, Angelí Dodge, Palmer & Wil- wards policy. Lexington defined DE; mington, Stephen Of Counsel: M. provision applies that the “lot or batch” Prignano, Esquire, (argued) Edwards requires ConAgra limit LLP, Providence, & Angelí Dodge, Palmer (“retained satisfy separate deductible RI, Appellee. for limit”) separate lot or batch to each up- coverage. access STEELE, Justice, Before Chief Lexington’s position. held JACOBS, RIDGELY, HOLLAND, Justices, NEWELL, pro- Judge,1 We conclude that the “lot or batch” ambiguous. constituting en Banc. vision of the Under IV, Supr. § Ct. 2 & 4. Sitting by designation pursuant Const. art. 12 and R. to Del. interpretations two reasonable Endorsement # 3—the “Lot or Batch one of the Lexington’s provision, of the “lot or batch” separate Provision”—contains a definition indemnify trig- “occurrence,” defend and were duties to as follows: policy arguably pro- Because the gered. Section IV. LIMITS OF INSURANCE ConAgra, Lexington’s vides is amended to following include the addi- thereby was duty triggered to defend paragraph: tional applicable when “re- satisfied respect Products-Completed With to the tained limit” for a “occurrence.” Hazard, Operations Bodily Injury all judgment Accordingly, we reverse *4 Property Damage arising out of one lot the Court and remand to ascer- or batch of prepared or ac- underlying ambiguous tain the intent the quired by you, shall be considered one language purposes for of determin- policy Occurrence. Such Occurrence shall be ing policy whether there is ultimate cover- subject to the Each Occurrence and age. Aggregate General Limits of policy this Policy The shown in Item 3. of the Declarations and shall be deemed occur to when the Bodi- Nearly years ago, ConAgra pur- five ly Injury Property Damage or occurs for an Prime® chased “Umbrella Commercial the first claim of the claim of that lot or Liability with Umbrella Insurance Crisis batch. (the “Poli- Response®” insurance
cy”) Lexington. Under the terms of Endorsement, purposes For the of this Policy, paid Lexington $1.15 single pro- Lot of is defined as a premiums. exchange million in In for duction run at single facility a not to in- premium payments, Lexington those day period. exceed a 7 ConAgra against many sured risks. One Nothing this endorsement shall be Products-Completed of those risks was the provide construed to coverage any for Hazard, Operations Policy which the de- taking place Occurrences outside the Bodily Injury Property fines as “all Policy Period. Damage occurring away from premises terms, definitions, All other conditions [ConAgra] arising or own[s] rent[s] un- exclusions remain ” [ConAgra] Policy out of Product.... changed. general defines the term “Occurrence” for Thus, provides the Lot or Batch Provision liability purposes respects as follows: “as another definition of the term “Occur- Bodily Injury Property Damage, an ac- (a Occurrence”). rence” “Lot or Batch cident, including or repeated continuous exposure substantially general to the same Policy’s two different definitions harmful All exposure conditions. such to the term “Occurrence” are relevant be- substantially general harmful same cause Endorsement # 10—-the “Retained will conditions be deemed to arise out of Amendatory Limit Endorsement” —con- (a Liability one “General Occurrence[ ]” Limits,” tains a “Schedule of Retained Occurrence”). which prescribes different retained limits Occurrence, Liability for a General on the If that were the definition of “Oc- hand, currence,” and for Lot or Batch Occur- Policy rence, But, Policy on the other. The defines straightforward. Policy would be sixty-six “Retained Limit” as “the Self-Insured Re- relatively complex page is doc- ument, applicable each that twenty-one which includes en- tention to Occurrence endorsements, damages dorsements. One of those results in not covered Sched- Coverage Denies any appli- Insurance nor Underlying uled coverage providing Insurance cable Other Shortly informed after CDC words, the Re- In other the Insured.” to link, suspected con- gra of deductible, Limit, tained like about for the tacted must it- amount of pea- from the contaminated Lexington’s contractual pay, trigger to self (the Claims”). nut “Peanut Butter ConAgra’s defense and pay duties later, Lexing- nine months Approximately Liability For a General tort liabilities. rights reserved its under preliminarily ton Occurrence, Lim- the Schedule of Retained Policy in a letter must provides $3 relevantly stated: million re- per million Occurrence meeting a face-to-face request [W]e Occurrences, of the number gardless discuss these cases and related Poli- Lexington’s duties under the trigger issues.... Occurrence, a Lot or Batch
cy. For interim, Lexington preliminarily In the requires of Retained Limits Con- Schedule rights, including, but not reserves its *5 Occurrence, per million Agra pay to $5 to, limit right limited the to or decline liability that regardless aggregate herein, coverage of the claims discussed pays, trigger Lexington’s to ConAgra asserted, Policy the and or later under If Policy. under the a Retained duties Lexington’s findings with and consistent satisfied, Policy Lexing- the limits Limit is analysis pending completion ongo- of our ton’s to million. $25 Butter ing investigation of the [Peanut Claims]. Salmonella-Tainted, Peanut Butter letter, Lexington explicitly also In that Provision, the or Batch referred to Lot Policy year. had a term of one coverage provided “The under explaining: During year, that an event occurred at Policy guided provisions, the is several site, Sylvester, Georgia plant ConAgra’s ... En- including, and without limitation ConAgra peanut manufactures but- where (Lot Batch).... No. 3 dorsement ConAgra that it ter. The CDC informed Please be advised that Lot or is link suspected a between certain strain at a single production defined as ‘a run peanut the butter that of salmonella and facility 7-day peri- not to exceed ConAgra ConAgra manufactured. imme- ” od.’ diately voluntary, announced a nationwide later, products. ConAgra all butter Six months sent a letter peanut recall of its Thereafter, Lexington requested States Food and to that a statement of United Lexington’s coverage position, as well as Drug Administration cautioned consumers any regarding not eat Pan® or Great Value® advice settlement of the Peter Butter Over the next six peanut brand butter that bore code num- Peanut Claims. months, identify ConAgra Lexington all ex- ber which was used letters, changed ConAgra pro- that man- more peanut documents Sylvester, Georgia plant vided with numerous ufactured its developing aid complaint, ConAgra alleges site. In its Lexing- twenty peo- position. thousand also informed approximately that paid agreed that it had over ple bring bodily injury will or illness claims ton country. be- throughout in courts million settlements. $3 Lexington’s that duties under the alleges that it has settled or oth- lieved gra also Policy triggered had been because that erwise over two thousand claims. resolved Lexington’s duty trig- Limit for a to defend had been the Retained exceeded amount In re- Liability gered Occurrence. because the Peanut Butter claims at General a reservation of arguably Policy issued least fell within the cover- sponse, ConAgra of Lex- letter that advised rights age. ConAgra argued also that the Lot or or Batch the Lot ington’s position Batch Provision did not to the Pea- Butter to the Peanut applied Provision Superior nut Butter Claims. The Lexington informed Claims. ConAgra’s partial summary judg- denied Policy under Lexington’s duties granted Lexington’s ment motion and triggered not been because had motion, in summary judgment part, declin- that it had exhaust- had not demonstrated ing ConAgra’s to dismiss bad faith claim. the Retained million—for ed Limit — Opinion,2 Superior In a Memorandum any one Lot or Batch. explained: History
Procedural
The court finds that the insurance
ambiguous.
If
policy only
three
one-half
Approximately
“occurrence,” ConAgra
defined
would be
later,
action in
ConAgra filed this
months
correct that there was
one occur-
Court, requesting compensa-
rence,
bodily injury
because the
tory
punitive damages
for breach of
collectively
arose
out of one cause-sal-
duty
implied
contract and breach of
monella-tainted
butter made in
dealing. ConAgra
fair
also
good faith and
And,
plant.
because
but-
declaratory judgment
requested
*6
continuously, ConAgra
ter was made
of the
re-
scope
parties’
would define the
policy
would still be correct if the
includ-
obligations
and
under the
spective rights
open-ended
ed an
Lot or Batch Provi-
Policy
Peanut Butter
for the
Claims. Con-
But,
policy
sion.
the
seemingly contem-
Agra
requested
declaratory judg-
further
and, by
plates
production
continuous
Lexington
that would order
to de-
ment
terms,
policy
the
limits a lot or batch to
ConAgra,
fend
and
defense costs that
product ConAgra
all the
manufactures
incurred, in connection with the
days,
Drilling
seven
less.
down
Butter
Peanut
Claims.
through
policy’s
the
terms hits the sev-
ConAgra’s allegations
denied
Lexington
limit
en-day
ConAgra’s
at the bottom.
affirmative de-
and asserted numerous
reading
policy
of the
renders the seven-
Lexington
fenses.
also counterclaimed
day
meaningless.
limit
declaratory judgments regarding the
for
Provision,
application of the Lot or Batch
longer
Where lots or batches take
than
Limits,
exhaustion of
Retained
days, including
seven
the sort of continu-
Lexington’s duties to defend and indemni-
asserts,
production ConAgra
ous
after
fy. Finally, Lexington
Superior
asked the
days, for
purposes,
seven
insurance
Lexington
to declare that
did not
Court
begins.
new lot or batch
The occur-
act in
faith.
bad
delivery
rence was not the
of a bad
peanuts.
batch of
That is between Con-
summary
then moved for
Agra
peanuts’ supplier.
judgment, arguing that the Lot or Batch
ConAgra’s negligently
occurrence was
Provision should
as a matter of law
making
put-
defective
butter and
ConAgra’s
and that
bad faith claim should
market,
ting
thereby causing
it on the
dismissed.
cross-moved for
be
words,
bodily injury.
although
In other
partial summary judgment, arguing that
Foods,
30, 2009).
(Del.Super.
Inc. v.
biguous.9
“when we
Applying
principles
those
to this
multiple
interpreta-
case,
ascribe
and different
Policy
we conclude that the
ambig
is
contract,
tions to a
we will find that the
uous,
“simply
parties
not
because the
do
ambiguous.”
contract is
construction,”17
agree
not
on
proper
its
multiple
but also because
and different
insurance contracts
interpret
We
interpretations may reasonably be as
similarly.
unambiguous
lan
“Clear
hand,
cribed to it.18 On the one
rea
one
in an
contract should be
guage
insurance
sonably may interpret
the Lot or Batch
”11
given
ordinary
meaning.’
‘its
and usual
limiting coverage.
Provision as
The Lot
of a
clear
language
is
“[W]here
Batch
or
Provision defines a “lot or batch”
unequivocal,
parties
are to be
single production
as “a
run at a single
plain meaning.”12
bound
its
“In con
facility
day
not to
period.”
exceed a
contracts,
struing insurance
we have held
Batch
provides
Lot or
Provision
that “all
ambiguity
that an
does not exist where the
Bodily Injury
Property Damages
aris
can
of a con
meaning
court
determine
ing
out of one lot or batch of
...
any
tract
‘without
than a
guide
other
shall be considered one Occurrence.”
which,
simple
knowledge
facts on
Reading those two elements of the Lot or
language
general,
nature of
its
”13
together,
reasonably
Provision
meaning depends.’
“An insurance con
may interpret
the Lot or Batch Provision
ambiguous
tract
not
simply
because the
segmenting,
for insurance
pur
do
on
parties
agree
proper
con
poses, claims into separate
day peri
seven
“[C]reating
ambiguity
struction.”
an
ods. That
disregard
would
could,
effect,
where none exists
create a
the actual number of Occurrences. Under
rights,
new contract with
liabilities and
interpretation, Lexington’s duties
duties to which the
had not
parties
assent
15 But,
triggered only
would be
when
explained
ed.”
we also have
that an
incurred
million in
ambiguous
given
insurance contract is
when it is
for a
“reasonably
fairly susceptible
day period.
of differ-
seven
Kemp,
Corp.,
Osborn ex rel. Osborn v.
14. Axis Reinsurance
v. HLTH
Co.
*8
1153,
(Del.2010)
1057,
(citing
(Del.2010)
1159-60
Rhone-Pou
(citing
A.2d
1062
Rhone-
Co.,
Poulenc,
lenc Basic Chem. Co. v. Am. Motorists Ins.
1196).
23. Id. at 171 n. 8. 29. Id. 24. Id. at 170. contend- with the idea that the occurrence.”30 The insurers consistent clause to make provision operated the to designed prevent stacking ed is the of Agent Orange lots of deliv- each of the 133 manufacturing deductibles where errors military to the occurrence.31 ered place. have taken Chancery The Divi- rejected The Diamond Shamrock court sion’s construction of the clause also argument agreed with the lower comports with the rationale of the cases to provision court that was intended previously, referring we cited to the defects, and apply only manufacturing injury defining cause of the in the num- recog- errors.32 The court design not to ber of occurrences.33 manufacturing-design nized that dis- The United States District Court for the debatable, but it concluded tinction was Maryland District of and the United States followingprinciple “indisputa- that the was Appeals of for the Fourth Circuit ble”: also have concluded that a “lot or batch” adding parties The intent of the provision similar to the one in this case to mini- policies batch clause to the was interpreted expand should be coverage. mize the number of occurrences order In Nationwide Mutual Insurance Co. v. coverage. to maximize If the batch Lafarge Corp.,34those interpreted courts interpreted require aggrega- clause is provision in the of context claims for with correspond tion of deductibles distributed, property damage arising from it will the sale of the number lots parties’ poorly performing run counter to the intent. On cement.35 The hand, although language the other Lafarge relevantly issue in provided: the batch clause makes no distinction goods are of one pre “[W]hen manufacturing design between de- lot, pared acquired all claims arising fects, Chancery interpre- Division’s therefrom shall be deemed to have arisen tation of the is consistent with provision from a common cause and to constitute purpose par- clause and one occurrence or accident.”36 The insur understanding. ties’ provision operated er contended that the clear, question While the is far from we to make each lot of defective cement a choose the interpretation the contrac- single occurrence.37 The district court re language tual that best advances the jected the insurer’s and ex purpose comports of the clause and with plained: parties’ intent. We are convinced of a purpose batch clause is to limit that the clause should be applied occurrences, the number of not to ex- product
where the
non-
manufactured is
pand it.
conforming, not where the product
If
faulty design.
consistent with a
this Court were to find that each lot
occurrence,
equation of “lots” and “occurrences” is
an
constituted
then La-
(4th Cir.1997)
(TA-
Id.
30.
at 480.
farge’s insurance
clearly not
That result is
before us—one that limits
interpretations
eviscerated.
intended.38
parties
what
expands coverage—
and one that
that the Lot or Batch Provi
we conclude
“The lot
court concluded:
The district
when
apply
ambiguous.41
ambiguity per
to situations
That
plainly
clauses
sion is
from a
defec-
multiple claims arise
a court to consider extrinsic evidence
mits
to extend to
They
purport
do not
tive lot.
case,
In this
parties’
of the
intent.42
multiple claims arise from
when
situations
that the Lot or
extrinsic evidence reveals
The Fourth Circuit
lots.”39
multiple
negotiated.43
was
Batch Provision
We
interpretation
and ex-
agreed with
Superi
this case for the
therefore remand
plained:
extrinsic evidence of
or Court
consider
reviewing the district court’s ex-
After
parties
agreeing
when
what the
intended
the bench on this
opinion from
tensive
to Endorsement # 3. If the extrinsic evi
issue,
agree with the court’s inter-
we
parties’
dence does not reveal the
intent as
occurrence,” its con-
of “each
pretation
Provision,
to the Lot or Batch
then the
and un-
the “occurrence”
clusion
Superior
apply
should
the “last re
of the
was the
derlying cause
proferentem
sort” rule of contra
and inter
“continuous,
manufacture
large-scale
pret
ConAgra.44
it in favor of
cement,
and sale” of defective
and its
that there was
one “occur-
holding
Duty
Has a
to Defend
Here,
purposes.
for deductible
rence”
duty
may
to defend
reasoning
the dis-
we affirm on the
of
duty
ultimately
trict
broader than the
indem-
court.40
H-90-2390, H-93-4173,
day period
period.
Lafarge,
Civ. Nos.
to exceed a 7
or a
hour
ConAgra argues
Op.,
(citing
extrinsic evidence
"[t]he
Bench
at 4040
Diamond Sham-
rock,
480).
wording
shows that the
... was
terms
609 A.2d at
exclusively by Lexington.” Lexington
drafted
argues
at 4041.
that the documents reflect that the Lot
39. Id.
product
was "the
of [an]
Provision
532509,
Lafarge,
length negotiation!
WL
sophisti-
*4.
between
arms’
]
bargaining
parties
equal
power.”
cated
Builders,
Phillips
parties
41. See
Home
700 A.2d at We do not address the intention of the
Rhone-Poulenc,
(quoting
616 A.2d at
stage
at this
because this extrinsic evidence is
1196).
Superior
now a matter for the
Court to ad-
dress in the first instance on remand.
Lillis,
Corp.
42. AT
v.
252-
& T
953 A.2d
Co.,
(Del.2008) (citing
Litig.
44. E.I. du Pont de Nemours &
Inc. v.
Appriva
53
Co.,
S'holder
Co.,
(Del. 1985)
ev3, Inc.,
Shell Oil
498 A.2d
LLC v.
(”[T]he
(Del.2007)).
proferentem
rule of contra
one of
is
resort,
last
such that a court will not
by
during
problem
reply
inquiry
In
to an
this Court
if a
in construction can be resolved
parties
appeal,
applying
have
more favored rules of construc
the course
tion.”) (citing
Corp.
proffered
pro-
Schering
v. Home
extrinsic evidence that was
(2d Cir.1983)).
during discovery
read as a a risk within the Conclusion In policy.”47 determining an bound to an whether insurer is defend judgment of the Superior Court is insured, against action an we the REVERSED and REMANDED for pro- (1) following principles: “where there is ceedings consistent with this Opinion. complaint some doubt as to whether the STEELE, Justice, NEWELL,
against alleges the insured a risk insured Chief against, Judge, should be resolved in dissenting: doubt (2) insured,” “any favor of the ambiguity Foods, ConAgra Inc. filed against suit pleadings against should resolved Lexington Insurance Co. to obtain insur- (3) carrier,” “if even one count or ance out of theory alleged complaint in the lies within ConAgra’s production of salmonella-taint- policy coverage, duty to defend ed butter. The Superior Court arises.”48 summary judgment awarded on the basis of the insurance contract be-
Here, we conclude that the Lot or
parties.
tween the
ConAgra
appeals
now
ambiguous
Batch Provision is
because
judgment.
this
Because we believe the
susceptible
compet
to two reasonable and
contractual text is unambiguous and favors
ing interpretations
that limits cover
—one
Lexington’s position, we would affirm.
age and one that expands coverage. Be
Therefore,
respectfully
we
dissent.
interpretation
cause the latter
arguably
case,
applies
need not
I.
AND
FACTS
PROCEDURAL
satisfy the Retained Limit for a Lot or
HISTORY
million—to trigger
$5
Occurrence—
Rather,
2006,
Lexington’s duty to
defend.
con
In
bought an insurance
sistent with the
of the Lot
provides
which
expands
or Batch Provision that
coverage,
general liability
broad
coverage to ConA-
only satisfy
need
gra
Retained
once
stipulated
satisfies
re-
Liability
Limit for a General
Occurrence— tained limits.
oper-
These retained limits
million.
surpassed that
ate like
ConAgra pays up
deductibles —
approximately
level,
threshold
years ago.
stipulated
three
and under the condi-
Consequently, Lexington’s duty
contract,
provided
to defend tions
in the
Ltd.,
45. Am.
(citing
Grp.
Mgmt.,
v. Risk Enter.
Id.
Cont’l Cas. Co. v.
I.
Alexis
du
(Del.2000)
Dist.,
(Del.
(citing
761 A.2d
A.2d
Pont Sch.
Charles
1974)).
Bros.,
Emp'rs
E. Brohawn &
Inc. v.
Comm.
(Del.
Co.,
Union Ins.
1979)).
duPont,
(citing
317 A.2d at
Id.
Alexis I.
105).
(quoting
while the limit for $3 ConAgra belief that formed of its Occurrence, the limit for lot or per million yet triggered Lexington’s obli- had not per Occur- batch million $5 alleged had not gations because rence. that it had the million retained satisfied $5 manufactures its the Lot or Batch applicable limit under Sylvester, Georgia in an unin- plant at a Provision. terrupted, process continuous that exceeds in this case is whether central issue February days seven in duration. On applies. the Lot or Batch Provision ConA- that it notified apply. that it Accord- gra argues does Pan Butter it had recalled Peter Peanut ConAgra, general Occurrence ing produced Georgia plant at its after the peanut butter claims applies, definition for Disease Control identified sal- Centers Occurrence, and single in the but- arise from a monella contamination premises [ConAgra] generally occurring away from The contract defines “Occur- accident, including rence” as "an continuous out of [ConA- or own[s] rent[s] substantially repeated exposure to or [ConAgra’s] gra’s] or Work.” It ex- Product general All such same harmful conditions. ConAgra’s plicitly excludes still exposure substantially general the same possession, has not physical work harmful conditions will be deemed to arise abandoned, inju- bodily yet completed or of one Occurrence.” out damage arising ry property out of the or transportation property the existence of "Products Com- 51. The contract defines the tools, equipment, uninstalled or abandoned Hazard,” part, pleted Operations in relevant unused materials. Damage Bodily Injury Property as "all respect million to both the and the law.52 must retained facts gra *13 Lexington’s cover- trigger limit in order to proper interpretation We also review the Because has age obligation. and of an contract construction insurance defending than million spent more de $3 novo.53 If the relevant lan- contract claims, argues butter it against peanut guage and unambiguous, is clear we must triggered Lexington’s it insurance that has give plain meaning.54 it its Contrarily, Lexington argues coverage. applies. Batch Provision the Lot or III. ANALYSIS
According Lexington, the Endorse- applies, ment’s Occurrence definition language We believe the of this insur- multiple butter claims arise out of peanut unambiguous ance is clear and on its product, or batches of and therefore lots face. The Products-Completed Opera- retained must million $5 tions Hazard provisions policy apply lot or represented limit for each batch claims, product liability and Endorse- triggers claims before it peanut butter # changes ment the definition of Occur- obligation. Because Lexington’s coverage purposes rence for of those claims. The that it has ConAgra neither has asserted peanut claims in butter this case fall within exceeded the million lot or batch re- $5 purview Products-Completed limit, provided tained nor has documenta- Operations they bodily Hazard because are effect, that it Lexington argues tion to that injury occurring away claims from ConA- coverage obligation. no has gra’s premises arising and out of ConA- pursued argu- the same parties gra’s products. Endorsement # 3 in- in Superior ments Court. sued parties single structs the to treat as a to collect all excess over bodily injury Occurrence all claims that limit. general the million retained Lex- $3 product, arise from each lot or batch of sought a decla- ington counterclaimed and it defines a “lot or batch” as “a ration that the Lot or Provision production single facility run at a not to no applied and that it had obli- day period.” Consequently, exceed a 7 gation unless and until exceeded respect products liability with per million lot or batch retained $5 Products-Completed Op- out of the limit. filed a Motion for Sum- Hazard, erations there is one Occurrence mary Judgment filed a Cross for, most, every day period seven Summary Judgment. Supe- Motion for A injury production during bodily which judge poli- rior Court found the insurance claims, here, like the butter claims that the cy unambiguous, agreed Endorse- arise. applied ment’s Occurrence definition ConAgra argued policy’s gener- that the summary judgment granted Lexington. ConAgra appeals judgment. applies al Occurrence definition case, primarily because it manufactured II. OF STANDARD REVIEW in an tainted uninterrupted, production continuous We review a trial court’s decision to de novo with schedule that exceeded seven summary judgment days in du- grant AmerisourceBergen Corp., 52. LaPoint v. 54. Id. (Del.2009). A.2d Builders, Phillips Home Inc. v. Travelers (Del. 1997). claims to an increased aggregated those argument implies ConAgra’s
ration. of million. disaggre- #3 retained limit Endorsement upon reliance ag- otherwise claims that should gates Considering scope potential the vast rather than gregated and defeats ConAgra’s liability that could arise however, interpretation, This enhances it. produces in continu- completed products agreement of explicit with the conflicts manufacturing cycles, imposing these ous agreed parties. ConAgra *14 to redefining Occurrence dual limitations — # 3— Endorsement specific to terms —in of claims within permit aggregation product liability precise to the day runs and production distinct seven here. bodily injury claims that are asserted applicable retained limit from raising that all terms dictate Specifically, those may have been million to $3 $5 million— arising claims out of one lot bodily injury offer only way could constitute completed products of or batch price ConAgra at a insurance Occurrence, lot or they and define one motivation pay. Regardless would day production as a seven batch in underlying the inclusion of these terms are They exception make no nor run. however, import their is clear. policy, subject any depends caveat that they bodily injury claims aris- respect With upon production the de schedule facto ing of finished under the out Accepting pursue. decides Hazard, Products-Completed Operation argument general poli- that the ConAgra’s a million policy imposes the insurance $5 applies of Occurrence in this cy definition batch, which retained limit on each lot or day limita- case would eviscerate the seven policy production defines as a discrete in the Lot or Batch Provi- tion contained lasting days run seven or less. Unless and par- sion and defeat the method that the heightened until satisfies expressly agreed upon determining ties for batches, any limit for of its lots or of lia- purposes product an Occurrence for gra trigger Lexington’s coverage. does not bility claims. in The insurance this case is IV. CONCLUSION policy. parties The general insurance general definition of Occur- We believe the text of insurance agreed to general Consequently, interpret of liabil- is clear. we applies rence that cases according plain meaning. to its In ity. parties agreed The also to the terms text case, ConAgra used including of # the Lot or this Endorsement very general of En- Endorsement # 3 to alter the defi- purpose Batch Provision. applica- # Lot Batch Provi- nition of Occurrence and raise the dorsement 3 and its bodily injury limit in parties is to allow the to zero on ble retained cases sion products liability arising claims out of the Products-Com- production specifically, — Hazard. explicitly changes pleted Operation It the definition Because claims. bodily products liability butter claims are purposes injury of Occurrence for bodily injury, they within subject Products-Completed to the claims fall # 3. There- Operations involving purview Hazard. In cases of Endorsement claims, case, fore, policy requires we that the those which include this En- believe intentionally temporally ConAgra satisfy per # 3 a million seven dorsement aggregation day production limits the of claims to those run retained limit with re- to the butter claims before it day spect out of the same discrete seven cover- trigger Lexington’s can insurance period production subjects and then therefore, otherwise, we believe the text is unam- we age. respectfully Because result, yields and because biguous dissent. has not that it reached asserted limit, applicable retained we believe yet triggered Lexington’s has not exposure pea- to the tainted
nut butter claims. would affirm the We majority
Superior Court. believes