Supreme Court of Delaware

In an action brought by AT&T against several insurance carriers for breaches of certain issued Director and Officer policies, dismissal of the action is reversed where: 1) contrary to the trial court's ruling, under California law the directors at issue suffered a covered "Loss" under the D&O policies and had a cognizable legal claim against insurers, which AT&T, as their assignee, became entitled to enforce; and 2) the trial court erred in interpreting California law to require that AT&T must have been legally (even though not primarily) obligated to indemnify the directors at issue in order to have a protectible "interest" for equitable subrogation purposes.

Appellate Information

• Decided 07/02/2007
• Published 07/06/2007

Judges

• JACOBS, Justice:, Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS and RIDGELY, Justices, constituting the Court en Banc.

Court

• Supreme Court of Delaware

Counsel

• For Appellant:
  
• John E. James and Sarah E. DiLuzio of Potter Anderson & Corroon, LLP, Wilmington, DE;  David M. Halbreich and Michel Y. Horton of Morgan, Lewis & Bockius, LLP, Los Angeles, CA;  John Edward Failla (argued) and Christopher C. Loeber of Morgan, Lewis & Bockius, LLP, New York City;  Paul A. Zevnik of Morgan, Lewis & Bockius, LLP, Washington, DC;  Cynthia Mahowald and Emily Barbour of AT & T, Washington, DC, of counsel, for Appellant.


• For Appellees:
  
• John C. Phillips, Jr. and Brian Farnan of Phillips Goldman & Spence, P.A., Wilmington, DE;  Douglas Mangel of Drinker Biddle & Reath, Washington, DC, of counsel, for Appellee Clarendon American Insurance Company., Kevin F. Brady of Connolly Bove Lodge & Hutz, LLP, Wilmington, DE;  William E. Smith and Cara Tseng Duffield of Wiley Rein, LLP, Washington, DC, of counsel, for Appellee Genesis Insurance Company., David A. Denham of Bifferato & Gentilotti, LLC, Wilmington, DE;  Martin J. Flannery, Jr. and David A. Richman of Pattison & Flannery, New York City, of counsel, for Appellees Farady Capital Limited, Individually and as Representative of those Underwriters at Lloyd's and those other Companies Subscribing to Directors and Officers and Company Reimbursement Policy No. 509/QB405901., Edward M. McNally and Mary B. Matterer of Morris James, LLP, Wilmington, DE;  Jeffrey G. Weil (argued) and Jared S. Hosid of Dechert, LLP, Philadelphia, PA;  Michael Manire and William P. Larsen, III of D'Amato & Lynch, New York City, of counsel, for Appellees National Union Insurance Company of Pittsburg PA. and North American Specialty Insurance Company., Francis J. Murphy and Jonathan L. Parshall of Murphy Spadaro & Landon, Wilmington, DE, for Appellee XL Specialty Insurance Co.