BatesCarey Obtains Delaware Supreme Court Affirmation Of Judicial Estoppel Ruling Eliminating $250 Million in Excess Coverage Claims
BatesCarey’s Stanley V. Figura obtained Delaware Supreme Court affirmance of a trial court ruling applying judicial estoppel to reject an attempt to establish coverage for asbestos claims asserted against General Motors under post-1971 excess policies with collective limits of approximately $250 million.
Upon General Motor’s emergence from bankruptcy in 2011, the company assigned its rights under its pre-1986 excess policies to a Trust that had funded its reorganization. The U.S. Treasury and the Governments of Canada and Ontario were the beneficiaries of the Trust.
The Trust then filed an action in Delaware Superior Court against General Motors’ excess insurers seeking coverage for asbestos claims under a coverage theory that contradicted a coverage theory General Motors asserted against its primary insurer in pre-bankruptcy litigation in Delaware and Michigan. BatesCarey represented a global insurance company in the action filed by the Trust.
Based on representations made by General Motor’s in the pre-bankruptcy litigation that it would never seek coverage for the asbestos claims under its post-1971 primary policies, BatesCarey asked the trial court to apply judicial estoppel to preclude the Trust from pursuing coverage for the same asbestos claims under the excess policies sitting above the primary policies that were the subject of General Motor’s prior representations.
The trial court applied judicial estoppel as one of the reasons for denying coverage under the excess policies. The Delaware Supreme Court affirmed on July 10, 2018. At the time of the ruling, approximately $250 million in post-1971 excess limits were still at issue in the case.