SS&C Technologies Holdings, Inc. v. Endurance Assurance Corporation

• Court: Superior Court of Delaware
• Decided: April 26, 2022
• Docket: N20C-01-088 EMD CCLD
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

SS&C TECHNOLOGIES HOLDINGS, ) INC., ) ) Plaintiff, ) C.A. No.: N20C-01-088 EMD CCLD ) v. ) ) ENDURANCE ASSURANCE ) CORPORATION, ) Defendant.

MEMORANDUM ORDER DENYING PLAINTIFF’S RENEWED MOTION FOR SUMMARY JUDGMENT

Upon consideration of Plaintiff’s Renewed Motion for Summary Judgment (the

“Motion”) filed by Plaintiff SS&C Technologies Holdings, Inc. (“SS&C”);1 Defendant’s

Opposition to the Motion (the “Opposition”) filed by Defendant Endurance Assurance Corp.

(“Endurance”); Plaintiff’s Reply Brief in Support of the Motion (the “Reply”); the transcript of

oral argument; and the entire record of this civil action,

1. On October 29, 2020, the Court issued an Opinion denying Defendant’s Motion to

Dismiss or Stay the Action, granting in part and deferring in part, Plaintiff’s Motion for Partial

Summary Judgment.2 The Court noted that the parties had not yet briefed how the Policy

addressed allocation and acknowledged that “[a]llocation may remain an issue.”3 The Court

recognized that the litigation posture of the Armour Action included indemnifiable and non-

indemnifiable claims under the Policy. The Court believed that the allocation could be resolved

1 Terms not otherwise defined herein shall have the meaning ascribed to them in SS&C Technologies Holdings, Inc. v. Endurance Assurance Corp., 2020 WL 6335898 (Del. Super. Oct. 29, 2020) (the “Opinion”). 2 SS&C Technologies Holdings, Inc., 2020 WL 6335898 at *1-*9. 3 Id. at *9; see also id. at *9, n. 84. prior to a trial. The Court directed the parties to engage in limited discovery targeting the sole

question of allocation.4

2. On February 22, 2021, after discovery, SS&C filed the Motion.5 On July 16,

2021, Endurance filed the Opposition.6 On August 5, 2021, SS&C filed the Reply.7 On January

10, 2022, the Court heard oral argument and reserved judgment.8

3. SS&C argues that as a matter of law, no portion of the settlement can be allocated

between covered and allegedly uncovered claims. To support this argument, SS&C asks the

Court to apply the Larger Settlement Rule.9 SS&C further contends that because the settlement

is not higher due to the settlement of any uncovered claims, SS&C should recover the entire

settlement. SS&C argues that even if the Larger Settlement Rule does not apply, Endurance

must still cover the entirety of the settlement because it cannot carry its burden of showing that

any portion of the settlement should be excluded.

4. The Court is not prepared to extend, on this record, the Larger Settlement Rule

beyond the coverage/allocation situation where indemnifiable and non-indemnifiable parties are

involved.

4 The Court directed the parties to engage in limited discovery targeting the “‘bare’ factual question. . . if any of the Settlement can plausibly be allocated to: (i) ‘return, reduction or restitution of fees’ paid by ACM to SS&C or (ii) . . . the remaining CUTPA claim.’” Id. at *8. Simply, the Court noted that “[t]he only remaining question is whether any of the Settlement can be allocated to the Fee-Carve out and the CUTPA claim.” Id. at *9. 5 D.I. No. 62. 6 D.I. No. 68. 7 D.I. No. 69. 8 D.I. Nos. 71, 72. 9 SS&C argues that the rationale of the Larger Settlement Rule which addresses the appropriate allocation of a settlement between insured parties and uninsured parties, applies in equal force to determining the appropriate allocation between covered claims and uncovered claims. SS&C does not cite any Delaware caselaw supporting the extension of the Larger Settlement Rule to the present situation but instead relies on a California case, PMI Mortg. Ins. Co. v. Am. Int’l Specialty Lines Ins. Co., 2006 WL 3290428, at *7 (N.D. Cal. Nov. 13, 2006). The Court does not find that the California case stands for the proposition that the Larger Settlement Rule should extend to situations where there is a question of allocation between covered and uncovered claims.

2 5. Endurance argues that most of the settlement (approximately 90%) must be

allocated to uncovered loss. Specifically, Endurance argues that the unfair practices exclusion

limits coverage for the settlement and the Fees Carve-Out is triggered. Ultimately, Endurance

believes that Connecticut law applies, SS&C had the burden to prove the appropriate allocation

of the Settlement according to the relative merits of the underlying counts, they didn’t meet that

burden and accordingly, the Court should adopt the allocated amount proposed by Endurance

and conclude that no more than $336,079.60 of the $3,550,000.00 settlement is reasonably

allocable to covered matters.

6. The Court finds that Endurance’s position is not procedurally supportable. At

best, the Court would deny the Motion because a genuine issue of material fact exists on

allocation. The Court would not grant judgment in favor of Endurance merely because SS&C

failed to meet a factual burden on summary judgment.

7. The standard of review on a motion for summary judgment is well-settled. The

Court’s principal function when considering a motion for summary judgment is to examine the

record to determine whether genuine issues of material fact exist, “but not to decide such

issues.”10 Summary judgment will be granted if, after viewing the record in a light most

favorable to a nonmoving party, no genuine issues of material fact exist and the moving party is

entitled to judgment as a matter of law.11 If, however, the record reveals that material facts are in

dispute, or if the factual record has not been developed thoroughly enough to allow the Court to

apply the law to the factual record, then summary judgment will not be granted.12 The moving

10 Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon & Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. 1973). 11 Id. 12 Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); see also Cook v. City of Harrington, 1990 WL 35244, at *3 (Del. Super. Feb. 22, 1990) (citing Ebersole, 180 A.2d at 467) (“Summary judgment will not be granted under any circumstances when the record indicates . . . that it is desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances.”).

3 party bears the initial burden of demonstrating that the undisputed facts support his claims or

defenses.13 If the motion is properly supported, then the burden shifts to the non-moving party to

demonstrate that there are material issues of fact for the resolution by the ultimate fact-finder.14

8. At oral argument, SS&C argued that there is no factual issue that remains for

allocation and the evidence demonstrates that the entirety of the settlement is covered.

Endurance argued that only 10% of the settlement is attributable to covered claims.

9. Both parties have essentially argued all-or-nothing with respect to allocation. The

factual record does not support this conclusion. The Armour action, on the eve of trial, included

both indemnifiable and non-indemnifiable claims.

10. The Court does not have a sufficient record to grant the Motion. SS&C has not

yet demonstrated that there are no genuine issues of material fact, and they are entitled to

judgment as a matter of law. As such, the Motion is denied.

IT IS HEREBY ORDERED that, the parties contact chambers to schedule a status

conference to determine next steps—i.e., a hearing, trial, mediation, or the like—to resolve the

allocation issue.

April 26, 2022 Wilmington, Delaware

/s/ Eric M. Davis Eric M. Davis, Judge

cc: File&ServeXpress

13 Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970) (citing Ebersole, 180 A.2d at 470). 14 See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).