Legion Partners asset Mgmt, LLC v. Underwriters at Lyod's London
/The Delaware Commercial Court rejected repeated arguments by Underwriters that a stayed Los Angeles Superior Court lawsuit (the “LASC Action”) did not require a defense of Counter-Claims in an Employment Arbitration, even though they asserted the same fact allegations as the LASC Action. The Delaware Court determined that it did not matter that the stay was issued to permit pursuit of the Employment Arbitration against a former employee. Nor was it important that a whistle blower label was affixed to the Arbitration Counter-Claim where it was based on the same facts as the LASC Action fiduciary abuse claim.
On remand, Underwriters allocation of defense fees while Legion asserts that no allocation is necessary as all fees of strategically defensive of the stayed LASC Action.
On remand the policy holders’ entitlement to coverage as well as fees, incurred under applicable New York law, for post-monetary settlement defense fees is at issue.
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