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.).
3
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).
4
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.).
5