IN THE SUPREME COURT OF THE STATE OF DELAWARE

UNDERWRITERS AT LLOYDS 

LONDON, 

Defendant Below,

Appellant,

v.

LEGION PARTNERS ASSET 

MANAGEMENT, LLC, a Delaware 

Limited Liability Company,

Plaintiff Below,

Appellee.

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§ 

§

§ No. 398, 2020

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§ Court Below–Superior Court

§ of the State of Delaware

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§ C.A. No. N19C-08-305

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Submitted: November 25, 2020

Decided: December 2, 2020

Before VAUGHN, TRAYNOR, and MONTGOMERY-REEVES, Justices.

ORDER

After careful consideration of the notice of interlocutory appeal, the 

supplemental notice of appeal, and their exhibits, it appears to the Court that:

(1) In May 2018, Justin P. Albert, a former employee of Legion Partners 

Asset Management, LLC (“Legion”), filed an action in the Los Angeles Superior 

Court (the “LASC Action”) against Legion and two of its principal directors, 

managers, and officers, Raymond T. White and Christopher S. Kiper. Albert alleged

that White and Kiper had breached their fiduciary duties and violated federal law by 

leaking confidential information to a news outlet. Albert also asserted claims against 
2

Legion for retaliation and wrongful termination. On the same day that Albert 

initiated the LASC Action, Legion filed a demand for arbitration with the American 

Arbitration Association, asserting that Albert had violated the terms of his 

employment with Legion by interfering with Legion’s business partnerships and 

revealing confidential information to third parties.1 On July 27, 2018, the LASC 

Action was stayed to allow arbitration to proceed on the employment-related claims.

(2) On August 22, 2018, Albert filed a counterclaim in the arbitration 

proceedings (the “Counterclaim”) against Legion for wrongful termination and 

violation of California’s whistleblower statute. Although White and Kiper were not 

named as defendants in the Counterclaim, the Counterclaim relied on the same 

alleged wrongful acts that formed the basis of the LASC Action. Before arbitration 

concluded, Legion notified its insurance carrier, Underwriters at Lloyds London 

(“Underwriters”), that it sought coverage under its directors’ and officers’ liability 

policy (“the Policy”) for the costs incurred in defending the Counterclaim. 

Underwriters denied Legion coverage because White and Kiper were not parties to 

the Counterclaim. Legion then initiated this action in the Superior Court seeking a 

judicial declaration that Underwriters had a duty to defend the Counterclaim.

1 Legion asserted that Albert had violated Legion’s Employment Agreement as well as its 

Confidentiality and Intellectual Property Agreement. Both agreements contained arbitration 

clauses requiring the arbitration of disputes arising from Albert’s employment.
3

(3) On September 25, 2020, the Superior Court granted Legion’s motion 

for partial summary judgment, holding that the allegations made in the Counterclaim 

triggered Underwriters’ duty to advance defense costs under the express language of 

the Policy (the “Opinion”).

2

 Specifically, the Superior Court found that 

Underwriters had a duty to advance defense costs because Legion had incurred 

defense costs (a “loss” as defined by the Policy) arising from the Counterclaim (a 

“claim” as defined by the Policy), which was based on Legion’s errors, neglect, acts, 

or omissions, through White and Kiper, arising from White and Kiper’s alleged act 

of leaking confidential information (a “wrongful act” as defined by the Policy). The 

Superior Court directed the parties to allocate the defense costs between covered and 

uncovered claims as contemplated by the Policy. Underwriters filed a motion to 

reargue, which the Superior Court denied on October 29, 2020 (the “Order”).

3

(4) On November 6, 2020, Underwriters asked the Superior Court to certify 

an interlocutory appeal from the Opinion and the Order (collectively, the 

“Decisions”) under Supreme Court Rule 42. Underwriters maintained that the 

Decisions decided a substantial issue of material importance,

4 namely the scope of 

insurance coverage provided by the Policy. Underwriters also argued that the 

2 Legion Partners Asset Mgmt., LLC v. Underwriters at Lloyds London, 2020 WL 5757341 (Del. 

Super. Ct. Sept. 25, 2020).

3 Legion Partners Asset Mgmt., LLC v. Underwriters at Lloyds London, 2020 WL 6338359 (Del. 

Super. Ct. Oct. 29, 2020).

4 Del. Supr. Ct. R. 42(b)(i).
4

following Rule 42(b)(iii) factors weighed in favor of granting interlocutory review: 

the Decisions decided issues of first impression in Delaware;

5

considerations of 

justice warrant interlocutory review;6and interlocutory review may terminate the 

litigation.7 Legion opposed the application.

(5) On November 23, 2020, the Superior Court denied Underwriters’

application for certification of an interlocutory appeal.8 Although the Superior Court 

did not dispute Underwriters’ assertion that the Decisions involved a substantial 

issue of material importance, it concluded that the Rule 42(b)(iii) factors did not 

weigh in favor of certification of an interlocutory appeal. The Superior Court

found—rightly, in our view—that it had not decided issues of first impression but 

had merely applied the unambiguous language of the Policy to the pleadings in the 

underlying litigation. The Superior Court also (i) rejected Underwriters’ argument 

that interlocutory review would serve considerations of justice, and (ii) observed that

the most efficient way to resolve this case is for the parties to determine the 

allocation of defense costs—the only remaining issue pending in the Superior 

Court—after which a direct appeal may be taken. We agree with the Superior 

Court’s conclusion.

5 Del. Supr. Ct. R. 42(b)(iii)(A).

6 Del. Supr. Ct. R. 42(b)(iii)(H).

7 Del. Supr. Ct. R. 42(b)(iii)(G).

8 Legion Partners Asset Mgmt., LLC v. Underwriters at Lloyds London, 2020 WL 6875211 (Del. 

Super. Ct. Nov. 23, 2020).
5

(6) Applications for interlocutory review are addressed to the sound 

discretion of the Court.9 Giving due weight to the Superior Court’s analysis and in 

the exercise of our discretion, this Court has concluded that the application for 

interlocutory review does not meet the strict standards for certification under 

Supreme Court Rule 42(b). Exceptional circumstances that would merit 

interlocutory review of the Superior Court’s decision do not exist in this case,10 and 

the potential benefits of interlocutory review do not outweigh the inefficiency, 

disruption, and probable costs caused by an interlocutory appeal.11

NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is 

REFUSED. 

BY THE COURT:

/s/ Gary F. Traynor

Justice

9 Del. Supr. Ct. R. 42(d)(v).

10 Del. Supr. Ct. R. 42(b)(ii).

11 Del. Supr. Ct. R. 42(b)(iii).