Court Opinion

ID: 9915265
Source: CourtListenerOpinion
Date Created: 2024-01-04 22:02:35.887351+00
Date Added: 2024-06-11T13:09:00.863818
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

CONDUENT STATE HEALTHCARE,       )
LLC, f/k/a/ XEROX STATE          )
HEALTHCARE, LLC, f/k/a ACS STATE )
HEALTHCARE, LLC,                 )
                                 )
      Plaintiff,                 )
                                 ) C.A. No. N18C-12-074 MMJ CCLD
      v.                         )
                                 )
AIG SPECIALTY INSURANCE          )
COMPANY, f/k/a CHARTIS SPECIALTY )
INSURANCE COMPANY, et. al.,      )
                                 )
      Defendants.                )
                                 )

                         Submitted: November 28, 2023
                           Decided: January 4, 2024

                     On Defendants’ Motion for Reargument
                                  DENIED

                                    ORDER

Orrie A. Levy, Esq., Robin L. Cohen, Esq., Keith McKenna, Esq., Cohen Ziffer
Frenchman & McKenna LLP, New York, New York; Jennifer C. Wasson, Esq.,
David A. Seal, Esq., Carla M. Jones, Esq., Potter Anderson & Corroon LLP,
Wilmington, Delaware; Attorneys for Plaintiff

Kenneth J. Nachbar, Esq., Megan Ward Cascio, Esq., Courtney Kurz, Esq., Emily C.
Freidman, Esq. Neal M. Glazer, Esq., Izak Weintraub, Esq., London Fischer, LLP;
Robert J. Katzenstein, Esq., Julie O’Dell, Esq., Smith Katzenstein & Jenkins, LLP;
Maaren A. Shah, Esq., Michael B. Carlinsky, Esq., Todd G. Bettie, Esq. Jonathan E.
Feder, Esq., Quinn Emanuel Urquhart & Sullivan, LLP; Robert S. Harrell, Esq.,

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Mayer Brown; Peter H. Kyle, Esq., John L. Reed, Esq., DLA Piper LLP (US);
Attorneys for Defendants

JOHNSTON, J.

      1.      By Opinion dated February 14, 2023, the Court granted a new trial. The

Court held:

           The Court finds that there are four principal reasons
           compelling retrial.

           The Court acknowledges that, in hindsight, the Winter
           Submission was so replete with evidentiary problems
           (hearsay, double or triple hearsay, inability to cross-examine
           the declarant, admitted lack of knowledge by the declarant),
           that it never should have been admitted—despite the
           agreement of the parties.       As the trial progressed, that
           document, and speculative evidence about the bias and
           credibility of the absent witness, became a central focus.

           Contrary to several explicit written and bench rulings of the
           Court, AIG’s counsel repeatedly referred to the jury a Press
           Release that had been unequivocally deemed inadmissible.

           Despite repeated admonishments by the Court, AIG’s closing
           argument was intended to persuade the jury to draw improper
           inferences from information set forth in privilege logs.

           AIG further inaccurately and improperly argued that AIG
           never had any coverage obligation to Conduent. This
           argument is directly in violation of the Court’s pretrial
           holding that AIG breached its contractual duty to pay defense
           costs.

           The Court finds that, in order to prevent manifest injustice,
           exceptional circumstances exist demonstrating that justice
           would miscarry if the jury’s verdicts were allowed to stand.
           THEREFORE, Plaintiff’s Motion to Set Aside the Judgment

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          Under Rule 59(d) and for a New Trial Under Rule 59(a) is
          hereby GRANTED.

          FURTHER THEREFORE, Plaintiff’s Motion for Judgment
          as a Matter of Law pursuant to Rule 50 is hereby GRANTED
          IN PART. The Court finds, as a matter of law, that AIG’s
          initial denial of coverage, and continued repudiation of
          coverage obligations, relieved Conduent of any duty to
          cooperate or to seek consent with regard to settlement with
          the Texas Attorney General.

          IT IS SO ORDERED.

          Plaintiff’s Application to Maintain Sealing is hereby
          GRANTED.1

       2. Defendants have moved for reargument. Defendants contend that the Court

failed to follow Rule 59(c) in granting a new trial on the basis of the Winter

Submission, without first giving Defendants notice and an opportunity to be heard.

The parties had agreed before trial that the Winter Submission could be used at trial.

Therefore, Conduent waived any right to seek a new trial on the basis of the

Submission, and the Court cannot order a new trial on its own initiative where no

party could obtain a new trial on this basis. Defendants argue that the Court

misapprehended Rule of Evidence 512(a) concerning negative inferences drawn by

Defendants from Conduent’s privilege assertions. Defendants contend that use of

the Press Release was appropriate because Conduent opened the door. Finally,

1
 Conduent State Healthcare, LLC v. AIG Specialty Ins. Co., 2023 WL 2256053, at *14 (Del.
Super.).
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Defendants assert that the verdict can be construed as consistent, and that even

inconsistent verdicts must be accorded deference where findings rest on sufficient

evidence.

          3.    Conduent responds that the post-trial briefing provided adequate

opportunity for Defendants to address any issue relating to the Winter Submission,

as contemplated by Rule 59(c).                 Conduent’s agreement to use of the Winter

Submission was not unlimited. Conduent had preserved objections to certain

portions of the document. The manner in which Defendants used the Submission

was unfairly prejudicial. Proper use of the privilege logs, and any inferences to be

drawn therefrom, was a hotly-contested issue both pretrial and throughout trial.

Conduent asserts that Defendants’ references to the Press Release were contrary to

the Court’s repeated rulings. Defendants’ suggestion to the jury - that coverage

decisions were correct - was erroneous and improper.

          4. The reasons for the Court’s decision are set forth in detail in the February

14, 2023 Opinion.

          5. The purpose of moving for reargument is to seek reconsideration of

findings of fact, conclusions of law, or judgment of law.2 Reargument usually will

be denied unless the moving party demonstrates that the Court overlooked a

2
    Hessler, Inc. v. Farrell, 260 A.2d 701, 702 (Del. 1969).

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precedent or legal principle that would have a controlling effect, or that it has

misapprehended the law or the facts in a manner affecting the outcome of the

decision.3 “A motion for reargument should not be used merely to rehash the

arguments already decided by the court.”4

          6. The Court has reviewed and considered the parties’ written submissions.

The Court finds that oral argument would be neither necessary nor helpful. The

Court did not overlook a controlling precedent or legal principle, or misapprehend

the law or the facts in a manner affecting the outcome of the decision.

          THEREFORE, Defendants’ Motion for Reargument is hereby DENIED.

          IT IS SO ORDERED.

                                                    Mary M. Johnston
                                               The Honorable Mary M. Johnston

3
    Ferguson v. Vakili, 2005 WL 628026, at *1 (Del. Super.).
4
    Wilmington Trust Co. v. Nix, 2002 WL 356371, at *1 (Del. Super.).

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