IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

CVR REFINING, LP, et al., 

Plaintiffs,

 v. 

XL SPECIALTY INSURANCE COMPANY, et 

al.,

Defendants.

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) C.A. No. N21C-01-260 EMD CCLD

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Submitted: July 7, 2021

Decided: August 11, 2021

Upon Defendants’ Motion to Dismiss, or Alternatively, to Stay

DENIED

Jennifer C. Wasson, Esquire, Carla M. Jones, Esquire, Potter Anderson & Corroon LLP, 

Wilmington, Delaware, Robin L. Cohen, Esquire, Alexander M. Sugzda, Esquire, Cohen Ziffer 

Frenchman & McKenna, New York, New York. Attorneys for Plaintiffs CVR Refining, LP, CVR 

Refining GP, LLC, CVR Refining Holdings, LLC, CVR Energy, Inc. and David Lamp 

Herbert Beigel, Esquire, Law Offices of Herbert Beigel, Tucson, Arizona. Attorney for Plaintiffs 

Carl C. Icahn and Icahn Enterprises L.P.

Robert J. Katzenstein, Esquire, Smith Katzenstein & Jenkins LLP, Wilmington, Delaware, 

Leland H. Jones, Esquire, Chiara Tondi Resta, Esquire, Wiley Rein LLP, Washington, D.C. 

Attorneys for Defendant XL Specialty Insurance Company.

John C. Phillips, Jr., Esquire, David Bilson, Esquire, Phillips McLaughlin & Hall, P.A., 

Wilmington, Delaware, Michael P. Duffy, Esquire, Scarlett M. Rajbanshi, Esquire, Boston, 

Massachusetts. Attorneys for Defendant Twin City Fire Insurance Company.

John C. Phillips, Jr., Esquire, David Bilson, Esquire, Phillips McLaughlin & Hall, P.A., 

Wilmington, Delaware, Erica J. Kerstein, Esquire, Robinson & Cole LLP, New York, New 

York. Attorneys for Defendant Allianz Global Risk US Insurance Company.

John C. Phillips, Jr., Esquire, David Bilson, Esquire, Phillips McLaughlin & Hall, P.A., 

Wilmington, Delaware, Geoffrey W. Heineman, Esquire, Ropers Majeski, P.C. Attorneys for 

Defendant Argonaut Insurance Company.
2

DAVIS, J. 

I. INTRODUCTION

This insurance coverage dispute is assigned to the Complex Commercial Litigation 

Division of the Court. Plaintiffs CVR Refining, LP (“CVR Refining”), CVR Refining GP, LLC 

(the “General Partner”), CVR Refining Holdings, LLC (“CVR Holdings”), CVR Energy, Inc. 

(“CVR Energy”), Icahn Enterprises, LP (“IELP”), Carl. C. Icahn, and David L. Lamp 

(collectively, “Plaintiffs”) assert claims against Defendants XL Specialty Insurance Company 

(“XL”), Twin City Fire Insurance Company (“Twin City”), Allianz Global Risks US Insurance 

Company (“Allianz”), Argonaut Insurance Company (“Argonaut”), and Allied World National 

Assurance Company (“AWAC”) (collectively, the “Insurers”). Specifically, Plaintiffs allege 

that: (i) all the Insurers anticipatorily breached insurance policies by denying defense costs 

coverage for Mr. Icahn, IELP and CVR Energy; (ii) all the Insurers anticipatorily breached the 

policy by denying coverage of Plaintiffs’ indemnity costs; and (iii) the Insurers breached the 

implied covenant of good faith and fair dealing by refusing to cooperate with Plaintiffs prior to a 

mediation or to provide coverage for any settlement reached at that mediation. 

The Insurers moved to dismiss, or alternatively, to stay this action under McWane1(the 

“McWane Motion”). In addition, Plaintiffs moved for summary judgment on Count I of the 

Complaint (the “Partial SJ Motion”). The Court held a hearing on the McWane Motion and the 

Partial SJ Motion on July 7, 2021. After the hearing, the Court took both matters under 

advisement.

For the reasons set forth below, the Court will DENY the McWane Motion. The Court 

will issue a decision on the Partial SJ Motion in a separate opinion at a later date.

1 McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co., 263 A.2d 281 (Del. 1970).
3

II. RELEVANT FACTS

A. THE PARTIES

All five corporate plaintiffs are Delaware entities. CVR Refining is an oil refiner and 

marketer of transportation fuels organized as a limited partnership in Delaware.2 CVR 

Refining’s principal place of business is Texas.3 The General Partner is a Delaware LLC and is 

an indirectly wholly owned subsidiary of CVR Energy through CVR Holdings.4 The General 

Partner is the general partner of CVR Refining, and has direct responsibility for CVR Refining’s 

business and operation management.

5

 CVR Holdings is a Delaware LLC and is an indirectly 

wholly owned subsidiary of CVR Energy.6 CVR Energy is a Delaware corporation with its 

principal place of business in Texas.7 Finally, IELP is a Delaware limited partnership.8

There are two individual plaintiffs—Carl Icahn and David L. Lamp. Mr. Icahn served as 

the General Partner’s chairman from January 2013 to July 2018, as well as CVR Energy’s 

chairman from June 2012 to July 2018.9 At all relevant times, Mr. Icahn, directly or indirectly, 

wholly owned the general partner of IELP and owned approximately 91% of IELP’s outstanding 

depositary units.10 Mr. Lamp has been a director of CVR Energy and the General Partner since 

January 2018.11 Since December 2017, Mr. Lamp has also been the president and CEO of both 

CVR Energy and the General Partner.12

2 Compl. ¶ 11. 

3

Id.

4

Id. ¶ 12. 

5

Id.

6

Id. ¶ 13. 

7

Id. ¶ 14. 

8

Id. ¶ 15. 

9

Id. ¶ 16. 

10 Id.

11 Id. ¶ 17.

12 Id.
4

The Defendants are all insurers. XL is a Delaware corporation with its principal place of 

business in Connecticut.13 XL is an insurance company licensed to do business in the state of 

Delaware.14 Twin City is an Indiana corporation with its principal place of business in 

Connecticut and is an insurance company licensed to do business in Delaware.15 Allianz and 

Argonaust are Illinois corporations and are licensed to do business in Delaware.16 Allianz has its 

principal place of business in Illinois.

17

 Argonaust has Texas as its principal place of business.18 

AWAC is a New Hampshire corporation with its principal place of business in New York and is 

an insurance company licensed to do business in Delaware, among other states.19

B. THE POLICIES20

XL issued Executive and Corporate Securities Liability Insurance ELU159007-18 (the 

“XL Primary Policy” or “Policy”) to CVR Energy.21

The Policy requires, in part, for XL to advance defense costs:

(C) Upon the written request of:

(1) the Company (or with respect to a Claim or Interview to which 

Insuring Agreements (A) or (D) apply, an Insured Person), the 

Insurer will advance Defense Expenses, no later than 60 days after 

the Insurer’s receipt of invoices and any additional information 

reasonably requested by the Insurer documenting such Defense 

Expenses, in excess of the applicable Retention, if any, before the 

disposition of the Claim, Interview or Investigation Demand for 

which this Policy provides coverage; or

(2) an Insured Person with respect to a Claim or Interview to which 

Insuring Agreements (B) or (C) apply (or would apply but for the 

13 Id. ¶ 18. 

14 Id.

15 Id. ¶ 19. 

16 Id. ¶¶ 20 and 21.

17 Id. ¶ 20.

18 Id. ¶ 21. 

19 Id. ¶ 22. 

20 The Policies are not directly at issue in the McWane Motion. The Court is discussing the Policies in depth to 

provide context as to the coverage dispute between Plaintiffs and the Insurers.

21 Id. ¶ 26. 
5

Company’s failure or refusal to pay Defense Expenses on behalf of 

such Insured Person), solely in the event that the Company fails or 

refuses to indemnify the Insured Person for Defense Expenses 

within 60 days of a written request of the Insured Person, the 

Insurer will advance Defense Expenses on a current basis, but not 

later than 60 days, after the Insurer’s receipt of invoices and any 

additional information reasonably requested by the Insurer 

documenting such Defense Expenses, in excess of the applicable 

Retention, before the disposition of the Claim or Interview for 

which this Policy provides coverage, subject in all events to 

Section VI. General Condition (G) of this Policy.22

The Policy sets out the Limit of Liability:

Item 3. Limit of Liability:23

(A) $1,000,000 Maximum Aggregate Sublimit of Liability each Policy 

Period for all Investigation Demands

(B) $10,000,000 Maximum Aggregate Limit of Liability each Policy Period

(including Defense Expenses) for all Loss from all 

Claims, Investigation Demands, and Interviews.

24

The Policy also specifies the Retentions:

Item 4. Retentions:

$0 Each Insured Person under INSURING AGREEMENT I (A) or 

(D)

$1,000,000 each Claim, other than a Securities Claim, under INSURING 

AGREEMENT I (B) or (C). 

$1,000,000 each Securities Claim under INSURING AGREEMENT I (B) or 

(C)

$0 each Investigation Demand under INSURING AGREEMENT I 

(F)25

22 Bourne Decl. Ex. 1 (hereinafter “XL Primary Policy”) Endorsement No. 26.

23 Words in bold appear in bold in the XL Primary Policy.

24 Id. Item 3.

25 Id. Item 4. 
6

Under the XL Primary Policy, XL provided $10 million in coverage in excess of a $1 

million retention. Endorsement No. 23, however, provides a higher retention limit for claims 

arising from mergers and acquisitions:

. . . solely with respect to any Claim based upon, arising out of, directly or 

indirectly resulting from, in consequence of, or in any way involving any: (a) 

acquisition, assumption, merger, consolidation or otherwise of any entity, asset, 

Subsidiary or liability described in Section VI General Conditions (D)(1) and (2); 

or (b) Change in Control, Item 4 of the Declarations is amended to read in its 

entirety as follows:

Item 4. Retentions

$0 each Insured Person under Insuring Agreement I (A) or (D)

$2,500,000 each Claim, other than Securities Claim, under INSURING 

AGREEMENT I (B) OR (E)

$2,500,00 each Securities Claim under INSURING AGREEMENT I (B) OR 

(C)

$0 each Investigation Demand under INSURING AGREEMENT I 

(F)26

Section VI General Conditions (D) concerns conditions related to Mergers and 

Acquisitions (Changes in Exposure or Control):

(1) If during the Policy Period the Company acquires any entity by merger, 

consolidation or otherwise such that the entity becomes a Subsidiary, coverage 

shall be provided for any Loss involving a Claim, Interview or Investigation 

Demand for a Wrongful Act occurring after the consummation of the transaction. 

(2) If, however, by reason of the transaction (or series of transactions) described in 

(D)(1) above, the assets or liabilities so acquired or so assumed as a result of such 

acquisition, exceed thirty-five percent (35%) of the total assets or liabilities, 

respectively, of the Company, as represented in the Company's most recent 

audited consolidated financial statements, coverage under this Policy shall be 

provided for a period of ninety (90) days or to the Expiration Date, whichever 

occurs first, for any Loss involving a Claim, Interview or Investigation Demand 

for a Wrongful Act that occurred after the transaction has been consummated. 

Coverage beyond such period will be provided only if: 

(a) the Insurer receives written notice containing full details of the 

transaction(s); and 

26 Id. Endorsement No. 23. 
7

(b) the Insurer at its sole discretion, agrees to provide such additional 

coverage upon such terms, conditions, limitations, and additional premium 

that it deems appropriate.27

There are three potentially applicable Insuring Agreements:

(A) The Insurer shall pay on behalf of the Insured Persons Loss resulting 

from a Claim first made against the Insured Person during the Policy 

Period for a Wrongful Act, except for Loss which the Company is 

permitted or required to pay on behalf of the Insured Persons as 

indemnification.

(B) The Insurer shall pay on behalf of the Company Loss resulting from a 

Claim first made against the Insured Persons during the Policy Period

for a Wrongful Act to the extent the Company is required or permitted to 

pay on behalf of the Insured Persons as indemnification.

(C) The Insurer shall pay on behalf of the Company Loss resulting solely 

from any Securities Claim first made against the Company during the 

Policy Period for a Wrongful Act.

...28

“Loss” is a defined term:

“Loss” means damages, judgments, settlements, pre-judgment and 

post-judgment interest or other amounts (including punitive, exemplary or 

multiplied damages, where insurable by law) that any Insured is legally 

obligated to pay and Defense Expenses, including that portion of any 

settlement which represents the claimant’s attorneys’ fees.29

The definition of Loss also has certain exclusions:

. . . Loss will not include that portion which constitutes:

(3) any amount which is uninsurable under the law pursuant to which 

this Policy is construed; provided that the Insurer will not assert 

that the portion of any settlement or judgment in a Claim arising 

from an initial or subsequent public offering of the Company’s

securities constitutes uninsurable loss due to the alleged violations 

of Section 11 and/or 12 of the Securities Act of 1933 as amended 

(including alleged violations of Section 11 and/or 12 of the 

27 Id. § VI(D)(1) and (2). 

28 Id. § I. 

29 Id. § II(O).
8

Securities Act of 1933 by a Controlling Person pursuant to Section 

15 of the Securities Act of 1933);

. . . 

(5) any amount which represents or is substantially equivalent to an 

increase in the consideration paid, or proposed to be paid, by the 

Company in connection with its purchase of any securities or 

assets of any person, group of persons, or entity

. . .

30

“Defense Expenses” are defined as:

“Defense Expenses” means reasonable and necessary legal fees, expenses and 

other costs (including experts’ fees):

(1) Incurred in the investigation, adjustment, settlement, defense and/or 

appeal of any Claim . . .

31

“Claim” is defined under Endorsement 25:

Section II Definitions (C)(2) of the Policy is amended to read in its entirety as 

follows:

(2) any civil, criminal, judicial, administrative or regulatory proceeding 

commenced by:

(a) service of a complaint or similar pleading;

. . .

32

“Securities Claim,” by contrast, is defined:

“Securities Claim” means a Claim, other than an administrative or regulatory 

proceeding against or investigation of the Company:

(1) made against an Insured for any actual or alleged violation of any federal, 

state or local statute, regulation, or rule or common law regulating securities, 

including but not limited to the purchase or sale of, or offer to purchase or sell, 

securities, which is:

30 Id. §§ II(O)(3) and II(O)(5).

31 Id. § II(F)(1). 

32 Id. Endorsement No. 25 (Amend Definition of Claim). 
9

(a) brought by any person or entity resulting from, the purchase or sale 

of, or offer to purchase or sell securities of the Company; or

(b) brought by a security holder of the Company with respect to such 

security holder’s interest in securities of the Company.

. . . 

33

 

Endorsement No. 42 amends the definition of “Securities Claim”:

“. . .‘Securities Claim,’ as defined in Section II Definitions (S) of the Policy, is 

amended to include any Claim, other than an administrative or regulatory 

proceeding against or investigation of the Company, made against any Insured for 

any actual or alleged act, error, omission, misstatement, misleading statement or 

breach of duty arising from or in connection with the purchase or sale of, or offer 

to purchase or sell any securities issued by the Company, whether such purchase, 

sale or offer involves a transaction with the Company or occurs in the open 

market.34

“Insured” means the Insured Persons and the Company.

35

“Insured Person” is defined:

“Insured Person” means:

(1) any past, present or future natural person director or officer, or member or 

manager of the board of managers, of the Company and those persons serving in 

a functionally equivalent role for the Parent Company or any Subsidiary

operating or incorporated outside the United States.36

Endorsement No. 46 further amends the definition of “Insured Person”:

(2) any past, present or future natural person employee or intern of the 

Company (other than an individual described in (J)(1) above) to the extent 

any Claim is: (a) a Securities Claim, or (b) made and maintained against 

both such employee and an Insured Person as defined in (J)(1) above;”37

Endorsement No. 23 of the Policy increased the retention to $2.5 million for claims 

related to Mergers and Acquisitions.

33 Id. § II(S)(1).

34 Id. Endorsement No. 42. 

35 Id. § II(I).

36 Id. § II(J).

37 Id. Endorsement No. 46. 
10

“Company” is defined:

“Company” means the Parent Company and any Subsidiary created or 

acquired on or before the Inception Date set forth in ITEM 2 of the Declarations 

or during the Policy Period, subject to GENERAL CONDITIONS VI (D). The 

term Company shall include any such entity as a debtor in possession, as such 

term is used in Chapter 11 of the United States Bankruptcy Code or any 

equivalent provision in any foreign jurisdiction.38

“Parent Company” means the entity named in ITEM 1 of the Declarations.39 ITEM 1 

names CVR Energy as the Company.40

“Subsidiary” is defined:

“Subsidiary” means any entity during any time in which the Parent Company

holds directly or indirectly:

(1) more than fifty percent (50%) of the voting rights or issued share capital 

of such entity.

. . .

41

“Wrongful Act” means: 

(1) any actual or alleged act, error, omission, misstatement, misleading 

statement, neglect, or breach of duty by an Insured Person while acting in his or 

her capacity as such or due to his or her status as such;

. . . 

(3) solely with respect to Insuring Agreement (C) of the Policy, any actual or alleged 

act, error, omission, misstatement, misleading statement, neglect, or breach of duty by the 

Company;

. . .

42

The XL Primary Policy also contains an allocation provision:

If both Loss covered by this Policy and loss not covered by this Policy are 

incurred, either because a Claim, Interview or Investigation Demand made 

38 Id. § II(D). 

39 Id. § II(Q).

40 Id. Item 1. 

41 Id. § II(T). 

42 Id. § II(U). 
11

against the Insured contains both covered and uncovered matters, or because a 

Claim, Interview or Investigation Demand is made against both the Insured

and others (including the Company for Claims other than Securities Claims) not 

insured under this Policy, the Insured and the Insurer will use their best efforts to 

determine a fair and appropriate allocation of Loss between that portion of Loss

that is covered under this Policy and that portion of loss that is not covered under 

this Policy. Additionally, the Insured and the Insurer agree that in determining a 

fair and appropriate allocation of Loss, the parties will take into account the 

relative legal and financial exposures of, and relative benefits obtained in 

connection with the defense and/or settlement of the Claim, Interview or 

Investigation Demand by, the Insured and others.43

Twin City. Allianz, Argonaut and AWAC issued excess insurance policies (collectively

with XL Primary Policy, the “Policies”) creating an insurance coverage tower.44 The Policies 

follow form to the XL Primary Policy.45 

C. THE UNDERLYING ACTIONS

The coverage dispute between Plaintiffs and the Insureds arises out of two putative class 

action lawsuits. Certain plaintiffs filed a lawsuit against CVR Refining in the Court of 

Chancery, In re CVR Refining, LP Unitholder Litigation, No. 2019-0062-KSJM (the “Delaware 

Litigation”).

46

 In addition, certain other plaintiffs initiated a lawsuit in the Southern District of 

New York, White Pine Investments v. CVR Refining, LP, No. 1:20-cv-02863 (the “White Pine 

Action”) (collectively, the “Underlying Actions”).47 The factual allegations of both lawsuits are 

substantially similar.48 The Delaware Litigation plaintiffs alleged that CVR manipulated the 

price of CVR Refining’s stock to enable CVR Energy to call the plaintiffs’ common units at an 

artificially depressed price.49 The plaintiffs in the Delaware Litigation and in the White Pine 

Action are not parties to this civil proceeding. 

43 Id. § V(D). 

44 See Compl. ¶¶ 41-44.

45 See id.; see also Bourne Decl. Exs. 2-5. 

46 Compl. Ex. F

47 See id. ¶ 45. 

48 Id. 

49 Id. ¶ 46.
12

The Delaware Litigation complaint names CVR Energy, CVR Refining, CVR Holdings, 

the General Partner, and Mr. Icahn and various individual directors and officers.50 The Delaware 

Litigation alleges breach of contract against the CVR entities, breach of the implied covenant of 

good faith and fair dealing against the CVR entities, and tortious interference against CVR 

Energy and Mr. Icahn.51

The White Pine Action complaint names as defendants CVR Energy, CVR Refining, 

CVR Holdings, the General Partner, IELP, and Mr. Lamp.52 The White Pine Action alleges 

violations of Section 10(b) of the Exchange Act and Rule 10b-5; and Section 20(a) of the 

Exchange Act.53 

Plaintiffs gave notice of the Underlying Actions to the Insurers.54 On March 25, 2019, 

XL contacted CVR Energy regarding coverage.55 XL stated the Delaware Litigation constituted 

a Claim against Insured Persons for Wrongful Acts and constituted a Securities Claim against 

CVR Energy, CVR Refining, CVR Holdings and the General Partner.56 XL denied coverage as 

to Mr. Icahn and IELP.57

D. THE INSURERS DENY COVERAGE.

Mediation for the Delaware Litigation was scheduled for February 17, 2021.58 

On January 8, 2021, XL sent a letter to CVR Energy, noting that coverage may not be 

available in the Delaware Litigation.59 First, XL argued that the “relief sought in the Litigation 

50 Id. ¶ 51. 

51 Id. ¶ 52. 

52 Id. ¶ 53. 

53 Id. ¶ 54. 

54 Id. ¶ 55. 

55 Id. ¶ 56. 

56 Id.

57 Id.

58 Id. ¶ 57. 

59 McWane Mot. Reply Br. Ex. K (January 8 XL Letter). 
13

may not constitute covered Loss” because (1) the damages are based solely on contractual 

obligations, (2) it is “any amount which represents or is substantially equivalent to an increase in 

the consideration paid, or proposed to be paid, by the Company in connection with its purchase 

of securities or assets of any person, group of persons, or entity,” and (3) the amount may be 

uninsurable under Texas law.60 Furthermore, XL took the position that coverage was 

unavailable for IEP and Mr. Icahn because IELP was not an Insured and that Mr. Icahn was not 

being sued in his capacity as an Insured Person.

61

 

On January 15, 2021, CVR Energy responded, setting out its position on why there was 

coverage under the Policies.

62

 CVR requested that XL confirm by February 3, 2021 that XL 

“will provide coverage for any settlement reached at mediation...scheduled for February 17, 

2021.”

63

 Instead of responding to the January 15, 2021 letter, the Insurers filed suit in Texas.

E. PROCEDURAL POSTURE

The Insurers filed a petition in Texas District Court on January 27, 2021 (the “Texas 

Action”).64 The Insureds then filed the Complaint in this litigation on January 30, 2021 seeking 

recovery for (1) anticipatory breach of contract regarding the Insurers’ denial of coverage for 

defense costs to Mr. Icahn, IELP, and CVR Energy; (2) anticipatory breach of contract for 

denying indemnity costs; and (3) breach of the implied covenant of good faith and fair dealing.65 

60 Id.

61 Id.

62 McWane Mot. Op. Br. at 9.

63 McWane Mot. Reply Br. Ex. L (January 15 CVR Letter)

64 McWane Mot. Op. Br. Ex. A (Insurers’ Texas Petition).

65 D.I. No. 1. 
14

The Insureds moved for partial summary judgment on XL’s duty to advance defense 

costs on March 12, 2021.66 The Insurers moved to dismiss, or alternatively, to stay the action 

under McWane on April 9, 2021.67 The parties oppose the respective motions. 

The Court held a hearing on the McWane Motion on July 7, 2021. The Court understands 

that Texas District Court will hold a hearing on outstanding motions in the Texas Action in midAugust.

III. PARTIES’ CONTENTIONS

The Insurers argue that this action should be dismissed in favor of the first-filed Texas 

Action, which involves the same parties and same coverage dispute. The Insurers argue that the 

Texas Action is first-filed because this civil proceeding was filed as a reaction to the Texas 

Action. 

Plaintiffs argue that this action and the Texas Action are contemporaneously filed and 

that traditional forum non conveniens analysis should apply. Plaintiffs further contend that the 

Insurers cannot demonstrate that it would be an overwhelming hardship and inconvenience to 

litigate in Delaware. As such, Plaintiffs claim that the Court should not dismiss the case under 

the traditional forum non conveniens rules.

The Court notes that, at present, there are four separate actions filed involving four 

different courts and three different states. As remarked at the July 7, 2021 hearing, judicial 

economy would have been best served through a traditional intervention in the Delaware 

Litigation or the White Pine Action for purposes of determining coverage. 

66 D.I. No. 24. 

67 D.I. No. 30. 
15

IV. STANDARD OF REVIEW

The granting of dismissal or a stay rests within the sound discretion of the trial court.68 

Dismissal under forum non conveniens is drastic relief and only warranted in “rare cases.”69 To 

avoid the plaintiff’s choice of forum, a defendant must show “with particularity that it will be 

subjected to overwhelming hardship and inconvenience if required to litigate in Delaware.”70 A 

defendant must show that the inconvenience and hardship are so profound that they 

“overwhelm” the plaintiff’s choice of forum.71 It is intended as “a stringent standard that holds 

defendants who seek to deprive of a plaintiff of her chosen forum to an appropriately high 

burden.”72 

When determining whether a suit should be stayed or dismissed for forum non 

conveniens, Delaware applies different standards depending on the circumstance.73 If the foreign 

action is first-filed, the Court will conduct an analysis under McWane.

74

 Under McWane, 

Delaware courts generally defer to a case filed first in time in another forum if that action 

involves substantially the same parties and issues as the litigation pending in Delaware.75 But, if 

two cases are filed contemporaneously, the Delaware case is filed first or there is no other 

pending action, the Court examines the motion under the traditional forum non conveniens

framework, applying the factors set forth in Cryo-Maid under an “overwhelming hardship” 

standard.76 

68 BP Oil Supply Co. v. Conoco Phillips Co., 2010 WL 702382, at *2 (Del. Super. 2010).

69 See Ison v. E.I. DuPont de Nemours and Co., Inc., 729 A.2d 832, 842 (Del. 1999). 

70 Pipal Tech Ventures Private Ltd. V. MoEngage, Inc., 2015 WL 9257869, at *5 (Del. Ch. Dec. 17, 2015). 

71 Id at *10.

72 Martinez v. E.I. DuPont de Nemours and Co., Inc., 86 A.3d 1102, 1105 (Del. 2014), as revised (Mar. 4, 2014). 

73 See Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C., 173 A.3d 1033, 1036 (Del. 2017). 

74 See id.

75 BP Oil Supply Co., 2010 WL 702382, at *2.

76 See Ethica Corp. Finance S.r.L., 2018 WL 3954205, at *5 (Del. Super. Aug. 16, 2018). 
16

V. DISCUSSION

The Court’s decision of whether to apply McWane and therefore whether or not to 

proceed to the Cryo-Maid analysis hinges upon whether a prior action was filed. The Insurers 

contend that the Texas Action is first filed both as to timing and because this action is reactive to 

the Texas Action. The Court does not agree with this legal conclusion. While the Texas Action 

was filed three days before this civil proceeding, the Court notes that merely using a timeline is 

not how to legally analyze the issue. 

“Delaware courts have not created a ‘bright line’ test to determine whether two actions 

are contemporaneously filed” because that determination is fact-specific to each case.77 

Delaware courts may treat cases that are filed within the same general time frame as 

contemporaneous.78 This is to avoid a situation where the parties “race to the courthouse” to file

actions that otherwise indicate independent decision making.79 Furthermore, declaratory actions 

filed in anticipation of the natural plaintiff are not entitled to deference “generally afforded to a 

first-filed action.”80 

By contrast, if the Delaware action is reactive, Delaware courts will defer to the first-filed 

suit, even if the competing suits were filed close in time.81 A reactive Delaware action will not 

“succeed in ousting a foreign plaintiff of its choice of forum simply by the speed with which it 

was filed.”82 “[S]uch a rule would undermine the very considerations of comity and efficiency 

77 Royal Indem. Co. v. Gen. Motors Corp., 2005 WL 1952933, at *2 n. 18 (Del. Super. Jul. 26, 2005). 

78 See In re Bear Stearns Cos., Inc. Shareholder Litigation, 2008 WL 959992, at *5 (Del. Ch. Apr. 9, 2008) (finding 

actions filed contemporaneously when they were “filed in the same general time frame, only three days apart”). 

79 Tex. Instruments Inc. v. Cyrix Corp., 1994 WL 96983, at *4 (Del. Ch. Mar. 22, 1994); see also Dura Pharms., Inc. 

v. Scandipharm, Inc., 713 A.2d 925, 929 (Del. Ch. 1998) (“[T]he two complaints were filed within one business day 

of another . . . an indication of independent decision making”). 

80 Nat. Union Fire Ins. Co. of Pittsburg, PA v. Crosstex Energy Servs., L.P., 2013 WL 6598736, at *4 (Del. Super. 

Dec. 13, 2013). 

81 See Dura Pharms, Inc., 713 A.2d at 929 (Del. Ch. 1998)

82 Id. 
17

on which the general rule of McWane based, by encouraging a ‘race’ to file responsive or 

reactive complaints.”83 Therefore, if the parties were “free to file suit” for a significant period of 

time before the purportedly contemporaneous suits were filed, courts are more likely to find the 

second-filed suit reactive and defer to the first-filed action.84 

The facts demonstrate that the Insurers engaged in a “race to the courthouse.” Here, the 

parties negotiated coverage until January 15, 2021.85 Plaintiffs set a deadline of February 3, 

2021 for the Insurers to take a final position on the February 17, 2021 mediation in the Delaware 

Litigation. Instead of continuing discussions with their insureds, the Insurers filed the Texas 

Action on January 27, 2021.86 While Plaintiffs’ cause of action may have existed when Insurers 

refused to cover the claim on January 8, 2021, Plaintiffs did not file suit for a significant amount 

of time within the context of negotiations. Without warning, the Insurers, who did not deny 

coverage until 2021, filed the Texas Action without additional notice to Plaintiffs. Importantly, 

Plaintiffs are the natural plaintiffs in this action.

87

 Under these circumstances, the Court will not 

defer to the Insurers’ choice of forum. Therefore, the Court finds that the actions were filed 

contemporaneously. As such, Cryo-Maid and not McWane governs here. 

When two cases are filed contemporaneously, the Court should examine the motion 

“under the traditional forum non conveniens framework, applying the factors set forth in 

Cryo-Maid under an ‘overwhelming hardship’ standard.”88 The Cryo-Maid factors are (1) the 

relative ease of access to proof; (2) the availability of compulsory processes for witnesses; (3) 

83 Id.

84 Id.; see also Chemtura Corp. v. Certain Underwriters at Lloyd’s, 2015 WL 5340475, at *4 (Del. Super. Aug. 26, 

2015) (finding that a second-filed action was reactive when defendants could have filed suit long before plaintiffs). 

85 See January 15 CVR Letter. 

86 Insurers’ Texas Petition. 

87 See Lima Delta Co. v. Global Aerospace, Inc., 2016 WL 691965, at *4 n.42 (Del. Super. Feb. 19, 2016) 

(“[Plaintiff] is the insured, and therefore, the “natural plaintiff” in an insurance coverage dispute”). 

88 Ethica Corp. Finance S.r.L, 2018 WL 3954205, at *5 (Del. Super. Aug 16, 2018). 
18

the possibility of the view of the premises; (4) whether the controversy is dependent upon the 

application of Delaware law; (5) the pendency or nonpendency of a similar action or actions in 

another jurisdiction; and (6) all other practical problems that would make the trial of the case 

easy, expeditious and inexpensive.89 

The Insurers do not argue that the Cryo-Maid factors apply, therefore they cannot meet 

their burden of proof.90 Furthermore, the Insurers waived any Cryo-Maid argument by failing to 

assert it in their opening brief.91 Even if the Insurers argued under traditional forum non 

conveniens standards, the Court finds that cannot prove overwhelming hardship if forced to 

litigate in Delaware. All the Insureds are licensed to do business in Delaware. XL is a Delaware 

corporation. In addition, there is a very good chance that Delaware law will apply to the 

Policies.92

VI. CONCLUSION

For all the foregoing reasons, the McWane Motion is DENIED.

93

 

The Court understands that this decision does not help preserve judicial resources. 

Ideally, the parties would have intervened in either the Delaware Litigation or the White Pine 

Action for a coverage determination. This is a commonly accepted practice and one usually 

welcomed by the courts.94 Unfortunately, the Insurers initiated litigation in an entirely new State 

89 See Taylor v. LSI Logic Corp., 689 A.2d 1196, 1198-99 (Del. 1997). 

90 See Williams Gas Supply Co. v. Apache Corp., 594 A.2d 34, 36 (Del. 1991) (“The burden [of proof] is imposed 

upon the moving party . . .”). 

91 See Franklin Balance Sheet Inves. Fund v. Crowley, 2006 WL 3095952, at *4 (Del. Ch. Oct. 19, 2006) (“[A] party 

is obliged in its motion and opening brief to set forth all of the grounds, authorities and arguments supporting its 

motion.”). 

92 See RSUI Indem. Co. v. Murdock, 248 A.3d 887, 896-901 (Del. 2021).

93 Arguments regarding forum shopping were made at the June 28, 2021 hearing. The Court disregarded such 

arguments in making its decision. The Court firmly believes that both this Court and the Texas District Court can 

competently and impartially preside over the litigation between the parties.

94 See, e.g., Bradley Corp. v. Zurich Ins. Co., 984 F.Supp. 1193, 1998 (E.D. Wis. 1997) (parties should move to 

intervene in primary litigation and request a determination as to coverage).
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(Texas as opposed to Delaware or New York) and Plaintiffs filed a fourth lawsuit in this Court. 

Now four different courts in three different States are involved. This conduct does not preserve 

scarce judicial resources. Despite this, the Court—applying, as it must, governing Delaware 

law—has determined that it will not stay or dismiss this civil proceeding. 

Dated: August 11, 2021

Wilmington, Delaware

/s/ Eric M. Davis

Eric M. Davis, Judge

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