Opinion ID: 2550236
Heading Depth: 1
Heading Rank: 3

Heading: Lexington Denies Coverage

Text: Shortly after the CDC informed ConAgra of the suspected link, ConAgra contacted Lexington about coverage for the claims arising from the contaminated peanut butter (the Peanut Butter Claims). Approximately nine months later, Lexington preliminarily reserved its rights under the Policy in a letter to ConAgra that relevantly stated: [W]e request a face-to-face meeting to discuss these cases and related coverage issues. . . . In the interim, Lexington preliminarily reserves its rights, including, but not limited to, the right to limit or decline coverage of the claims discussed herein, or later asserted, under the Policy and consistent with Lexington's findings and analysis pending completion of our ongoing investigation of the [Peanut Butter Claims]. In that letter, Lexington also explicitly referred to the Lot or Batch Provision, explaining: The coverage provided under the Policy is guided by several provisions, including, and without limitation . . . Endorsement No. 3 (Lot or Batch) . . . . Please be advised that Lot or Batch is defined as `a single production run at a single facility not to exceed a 7-day period.' Six months later, ConAgra sent a letter to Lexington that requested a statement of Lexington's coverage position, as well as any advice regarding settlement of the Peanut Butter Claims. Over the next six months, ConAgra and Lexington exchanged more letters, and ConAgra provided Lexington with numerous documents to aid Lexington in developing its coverage position. ConAgra also informed Lexington that it had paid or agreed to pay over $3 million in settlements. ConAgra believed that Lexington's duties under the Policy had been triggered because that amount exceeded the Retained Limit for a General Liability Occurrence. In response, Lexington issued a reservation of rights letter that advised ConAgra of Lexington's position that the Lot or Batch Provision applied to the Peanut Butter Claims. Lexington informed ConAgra that Lexington's duties under the Policy had not been triggered because ConAgra had not demonstrated that it had exhausted the Retained Limit$5 millionfor any one Lot or Batch.