Twin City Fire Insurance Co v. Energy Transfer Equity

IN THE SUPREME COURT OF THE STATE OF DELAWARE

TWIN CITY FIRE INSURANCE CO., §
NAVIGATORS INSURANCE CO., and § No. 343, 2020
ALLIED WORLD NATIONAL §
ASSURANCE CO., § Court Below: Superior Court
§ of the State of Delaware
Defendants Below, §
Appellants, § C.A. No. N19C-11-009
§ CCLD
v. §
§
ENERGY TRANSFER EQUITY, LP, §
REGENCY GP LP, and REGENCY GP §
LLC, §
§
Plaintiffs Below, Appellees. §

Submitted: October 16, 2020
Decided: December 31, 2020

Before VALIHURA, VAUGHN, and TRAYNOR, Justices.

ORDER

After consideration of the notice of appeal from an interlocutory order and the

documents attached thereto, it appears to the Court that:

(1) The appellants, Twin City Fire Insurance Company, Navigators

Insurance Company, and Allied World National Assurance Company (collectively,

the “Appellant Insurers”), have petitioned this Court, pursuant to Supreme Court

Rule 42, to accept an appeal from the Superior Court’s opinion dated September 25,
2020. The September 25 opinion denied the Appellant Insurers’ motion to dismiss

for lack of personal jurisdiction.

(2) In the Superior Court litigation, the appellees, Energy Transfer Equity,

LP, Regency GP LP, and Regency GP LLC (collectively, the “Insureds”), claim that

certain director and officer insurance policies issued by the Appellant Insurers and

others cover damages that may be awarded in class-action litigation that is pending

in the Delaware Court of Chancery (the “Dieckman Action”). The plaintiff in the

Dieckamn Action seeks damages for unitholders of Regency Energy Partners LP

(“Regency”) arising out of the acquisition of Regency by Energy Transfer Partners

L.P. Appellees Regency GP LP and Regency GP LLC, among others, were named

as defendants in the Dieckman Action.

(3) The Appellant Insurers moved to dismiss the Superior Court litigation,

asserting that they are not subject to personal jurisdiction in Delaware. The Superior

Court denied the motion, holding that the Appellant Insurers are subject to personal

jurisdiction under 10 Del. C. § 3104(c)(6).1 That section of Delaware’s long-arm

statute provides that a Delaware court may exercise personal jurisdiction over a

nonresident who “[c]ontracts to insure or act as surety for, or on, any person,

property, risk, contract, obligation or agreement located, executed or to be performed

1
Energy Transfer Equity, L.P. v. Twin City Fire Ins. Co., 2020 WL 5757343, at *5 (Del. Super.
Ct. Sept. 25, 2020).
2
within the State at the time the contract is made, unless the parties otherwise provide

in writing.”2 The court also held that the exercise of jurisdiction over the Appellant

Insurers would not offend due process.3

(4) The Appellant Insurers asked the Superior Court to certify an

interlocutory appeal. The Superior Court denied the application for certification.4

The court determined that its opinion denying the Appellant Insurers’ motion to

dismiss did not decide a substantial issue of material importance because it did not

go to the merits of the case.5 With respect to the criteria of Rule 42(b)(iii), the

Superior Court concluded that the decision sustained the controverted jurisdiction of

the Superior Court6 and arguably involved a question of law relating to the

“constitutionality, construction, or application” of Delaware’s long-arm statute.7

But it also determined that a successful interlocutory appeal would not necessarily

terminate the litigation in its entirety,8 because numerous other insureds would

remain as defendants in the action, even if the Appellant Insureds were not subject

2
10 Del. C. § 3104(c)(6).
3
Energy Transfer Equity, 2020 WL 5757343, at *6.
4
Energy Transfer Equity, L.P. v. Twin City Fire Ins. Co., 2020 WL 6112299 (Del. Super. Ct. Oct.
16, 2020).
5
Id. at *3 (citing Jelin v. NRG Barriers, Inc., 1996 WL 442907 (Del. July 23, 1996); Tortuga Cas.
Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 1991 WL 247813 (Del. Nov. 14, 1991); Cardona
v. Hitachi Koto Co., 2019 WL 956779, at *2 (Del. Super. Ct. Feb. 25, 2019), appeal refused, 2019
WL 1716054 (Del. Apr. 16, 2019); TowerHill Wealth Management, LLC v. Bander Family P’ship,
2008 WL 4615865, at *2 (Del. Ch. Oct. 9, 2008), appeal refused, 2008 WL 4809456 (Del. Nov.
3, 2008)).
6
DEL. SUPR. CT. R. 42(b)(iii)(D).
7
Id. R. 42(b)(iii)(C).
8
Id. R. 42(b)(iii)(G).
3
to personal jurisdiction. And it determined that interlocutory review would not serve

considerations of justice9 or promote the most efficient and cost-effective resolution

of the case.10

(5) We agree that interlocutory review is not warranted in this case.

Applications for interlocutory review are addressed to the sound discretion of this

Court.11 In the exercise of its discretion and giving great weight to the trial court’s

view, 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,12 and the potential benefits of interlocutory

review do not outweigh the inefficiency, disruption, and probable costs caused by

an interlocutory appeal.13

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

REFUSED.

BY THE COURT:

/s/ James T. Vaughn, Jr.
Justice

9
Id. R. 42(b)(iii)(H).
10
Id. R. 42(b)(iii).
11
Id. R. 42(d)(v).
12
Id. R. 42(b)(ii).
13
Id. R. 42(b)(iii).
4