AT&T Corp. v. Clarendon America Insurance Co., et al.
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY AT&T CORP., Plaintiff, v. CLARENDON AMERICA INSURANCE CO., et al. Defendants. ) ) ) ) ) ) ) ) C.A. No. 04C-11-167 (JRJ) Date Submitted: September 20, 2005 Date Decided: April 13, 2006 OPINION Upon Defendant Continental Casualty Co. s Motion for Partial Summary Judgment for a Declaration That There is No Coverage for the Williamson Fiduciary and Leykin Actions Under the Excess Run-Off and 2001 Continental Policies (D.I. 65/E-File 109) GRANTED Upon Defendant Zurich American Ins. Co. s Motion for Summary Judgment and Joinder in Defendant Federal Ins. Co. s Motion for Partial Summary Judgment as to the 2001-2007 AT&T Run-Off Policies (D.I. 66/E-File 110) GRANTED Upon Defendant National Union Fire Ins. Co. s Motion for Partial Summary Judgment and/or Judgment on the Pleadings (D.I. 69/E-File 113) GRANTED Upon Defendant Federal Ins. Co. s Motion for Partial Summary Judgment as to the 2001-2007 AT&T Run-Off Policies (D.I. 72/E-File 117) GRANTED Upon Defendant Gulf Ins. Co. s Joinder in Continental Casualty Co. s Motion for Partial Summary Judgment for a Declaration That There is No Coverage for the Williamson Fiduciary and Leykin Actions Under the Excess Run-Off and 2001 Continental Policies (D.I. 73/E-File 118) GRANTED Upon Defendant Gulf Ins. Co. s Joinder in Federal Ins. Co. s Motion for Partial Summary Judgment for a Declaration That There is No Coverage for the Underlying Litigation Under the AT&T Run-Off Policy Tower (D.I. 75/E-File 120) GRANTED Upon Defendant Twin City Fire Ins. Co. s Joinder in Motions for Partial Summary Judgment Filed in Connection With the Williamson Fiduciary and Leykin Actions (D.I. 81/Lexis 130) GRANTED Upon Defendant Faraday Capital Limited s ( Lloyd s ) Joinder in Federal Ins. Co. s Motion for Partial Summary Judgment (D.I. 82/E-File 135) GRANTED Appearances: John E. James, Esquire and Sarah DiLuzio, Esquire of Potter Anderson & Corroon, 1313 North Market Street, Wilmington, Delaware, 19801, and Jeffery M. Johnson, Esquire (Argued), Deborah Goldstock Ringel, Esquire, Ryan S. Luft, Esquire, Jason D. Wallach, Esquire, B. Haven Walling, Jr., Esquire and Karen L. Bush, Esquire (Pro Hac Vice) of Dickstein, Shapiro Morin & Oshinsky, 2101 L Street, N.W., Washington, D.C. 20037 and Alexander D. Widell, Esquire (Pro Hac Vice) of Dickstein, Shapiro, Morin & Oshinsky, 1177 Avenue of the Americas, New York, New York 10036, Attorneys for the Plaintiff AT&T Corp. John D. Balaguer, Esquire and William L. Doerler, Esquire of White and Williams, 824 Market Street, Suite 902, Wilmington, Delaware, 19899, and Geoffrey W. Heineman, Esquire, and Matthew Bryant, Esquire (Pro Hac Vice) of Ohrenstein & Brown, One Penn Plaza, 46th Floor, New York, New York, 10119, Attorneys for the Defendant Travelers Indem. Co., as successor in interest by merger to Gulf Ins. Co. David A. Denham, Esquire of Bifferato Gentilotti Biden & Balick, 1308 Delaware Avenue, Wilmington, Delaware, 19899, and Martin J. Flannery, Jr., Esquire and David A. Richman, Esquire (Pro Hac Vice) of Pattison & Flannery, 111 Broadway, 20th Floor, New York, New York, 10006, Attorneys for the Defendants Faraday Capital Limited, Individually and as Representative of those Underwriters at Lloyd s. Anthony G. Flynn, Esquire, Timothy Jay Houseal, Esquire, and Martin S. Lessner, Esquire of Young, Conaway, Stargatt & Taylor, 1000 West Street, 17th Floor, Wilmington, Delaware, 19899, and David Newmann, Esquire (Argued) and Michelle A. Kisloff, Esquire (Pro Hac Vice) of Hogan & Hartson, 555 Thirteenth Street, N.W., Washington, D.C. 20004, Attorneys for the Defendant Federal Ins. Co. Carmella P. Keener, Esquire of Rosenthal, Monhait & Goddess, 919 North Market Street, Suite 1401, Wilmington, Delaware, 19801, and Leslie Ahari, Esquire (Argued) and Marc E. Rindner, Esquire (Pro Hac Vice) of Ross, Dixon & Bell, 2001 K Street, N.W., Washington, D.C. 20006, Attorneys for the Defendants Columbia Casualty Co. and Continental Casualty Co. Kevin F. Brady, Esquire, Connolly, Bove, Lodge & Hutz, 1007 North Orange Street, Wilmington, Delaware, 19899, and William E. Smith, Esquire (Argued), Cara Tseng Duffield, Esquire, and Daniel J. Standish, Esquire (Pro Hac Vice) of Wiley Rein & Fielding, 1776 K Street N.W., Washington, D.C. 20006, Attorneys for the Defendant Genesis Ins. Co. Francis J. Murphy, Esquire of Murphy, Spadaro & Landon, 1011 Centre Road, Suite 210, Wilmington, Delaware, 19805, and Alexis J. Rogoski, Esquire and Daniela Levarda, Esquire (Pro Hac Vice) of Boundas, Skarzynski, Walsh & Black, One Battery Park Plaza, 22nd Floor, New York, New York, 10004, Attorneys for the Defendant XL Specialty Ins. Co. John C. Phillips, Jr., Esquire and Brian Farnan, Esquire of Phillips, Goldman & Spence, 1200 North Broom Street, Wilmington, Delaware, 19806, and Douglas M. Mangel, Esquire (Pro Hac Vice) of Drinker Biddle & Reath, 1500 K Street, N.W., Suite 1100, Washington, D.C. 20005, Attorneys for the Defendants Clarendon America Ins. Co. and Twin City Fire Ins. Co. Edward M. McNally, Esquire and Mary B. Matterer, Esquire of Morris James Hitchens & Williams, 222 Delaware Avenue, 10th Floor, Wilmington, Delaware, 19801, and Jeffrey G. Weil, Esquire, Rick L. Swedloff, Esquire (Pro Hac Vice) of Dechert, LLP, Cira Centre, 2929 Arch Street, Philadelphia, Pennsylvania 19104, Attorneys for the Defendant North American Speciality Ins. Co. Edward M. McNally, Esquire and Mary B. Matterer, Esquire of Morris James Hitchens & Williams, 222 Delaware Avenue, 10th Floor, Wilmington, Delaware, 19801, and Michael Manire, Esquire, Deeana M. Galla, Esquire, J. Lloyd Herman, Esquire, William P. Larsen, III, Esquire (Argued) (Pro Hac Vice) of D Amato & Lynch, 70 Pine Street, New York, New York 10270, Attorneys for the Defendant National Union Fire Ins. Co. C. Scott Reese, Esquire and Noriss E. Cosgrove, Esquire of Cooch and Taylor, 824 Market Street, Suite 1000, Wilmington, Delaware, 19899, and Randall Block, Esquire (Argued) (Pro Hac Vice) of Sedgwick, Detert, Moran & Arnold, LLP, One Market Tower, 8th Floor, San Francisco, California, 94105, Attorneys for the Defendant Zurich American Ins. Co. Jurden, J. I. INTRODUCTION A. Procedural Posture This is a vast insurance coverage case involving Directors and Officers and Company ( D&O ) Liability policies purchased by two corporations, the Plaintiff AT&T Corp. ( AT&T ) and At Home Corp. ( At Home ). Procedurally, the litigation is shifting from Phase 1 into Phase 2.1 This Opinion addresses the first of three sets of dispositive motions, and AT&T s opposition thereto, filed pursuant to Phase 1 of Case Management Order No. 1.2 It contains the Court s determination of counterclaims raised by the Defendant Insurers,3 who issued policies to AT&T and its directors and officers. Thus, beyond presenting relevant underlying facts and California case law, this Opinion addresses potential coverage under the AT&T Programs but not the At Home Towers.4 1 See AT&T Corp . v. Clarendon A m. Ins., Del. Super., C.A. No. 04C-11-167, Jurden, J. (Apr. 27, 2005) (ORDER) (D.I. 61/E-File 103). The Court notes that discovery has commenced in preparation for the Phase 2 dispositive m otions. See AT&T Corp . v. Clarendon A m. Ins., Del. Super., C.A. No. 04C-11-167, Jurden, J. (Jan. 9, 2006) (ORD ER) (D .I. 192). 2 AT&T Corp . v. Clarendon A m. Ins., Del. Super., C.A. No. 04C-11-167, Jurden, J. (Apr. 27, 2005) (ORDER ) (D.I. 61/E-File 103). 3 See infra text accompanying notes 6, 14. However, given the Court s forth coming decision on issues related to AT&T s rights as an assignee to any coverage potentially available to its own directors and officers under the 2002 National Union 9 th Excess P olicy, this Opin ion does n ot addres s countercla ims made under the se parate terms of that E xcess Po licy. See National Union Fire Ins. Co. Op. Br. in Supp. Mot. for Part. Summ. J. and/or J. on the Plea. at 20-22, AT&T Corp . v. Clarendon A m. Ins., D.I. 69/E -File 113 (J une 2, 20 05); Rep ly Br. in Supp . Mot. by Nat l Un ion for J. on th e Plea. and /or Part. Su mm. J. at 14 -19, AT&T Corp . v. Clarendon A m. Ins., D.I. 133/EFile 200 (S ept. 2, 200 5). 4 Due to the Court s pending determination of AT&T s rights as an assignee or equitable subrogee of the directors and officers of At Home Corp., under policies issued by the Defendants the At Home Insurers and National Union, this O pinion do es not add ress any coun terclaims ma de under the At Ho me To wers. See Op. Br. of the At Home Insurers in Supp. of their Mot. for Part. Summ. J. on Pl. s Claims for Coverage for the Williamson Fid uciary & Leykin Actions Under the 2001 At Home Program, AT&T Corp . v. Clarendon A m. Ins., D.I. 68/E-File112 (June 2, 2005) ; Nat l Unio n Op. B r., D.I. 69/E -File 113; D ef. Clarendo n Am. Ins. C o. s Notice of Joinder in Mot. for P art. Summ. J. Filed in Connection With the Williamson Fid uciary & Leykin Actions, AT&T Corp . v. Clarendon A m. Ins., D.I. 77/E-File122 (June 7, 2005); Reply Br. by Nat l Union, D.I. 133/E-File 200. 4 B. Phase I Motions for Partial Summary Judgment The Insured, AT&T, seeks coverage in connection with several underlying shareholder suits brought against it, and certain directors and officers of AT&T and At Home Corp. To that end, it seeks indemnity and payment of defense fees, costs, settlements or judgments resulting from these suits under various D&O Liability insurance policies purchased from the Defendant Primary and Excess Insurers (referred to collectively as the Defendants or the Insurers ).5 As part of the Phase I briefing, the Defendants timely filed the multiple dispositive motions and joinders presently before the Court, in which they assert that AT&T s claims fall outside the scope of coverage afforded under the D&O policies. Subsequently, on August 15, 2005, AT&T filed its answering briefs and its First Amended Complaint. The Defendants responded on September 2, 2005.6 On September 20, 2005, the Court heard oral argument on the Defendants individual motions. For the reasons that follow, the Defendants Motions are GRANTED.. C. Background - AT&T s Complaint and the D&O Policies Given the complex circumstances that bring this matter before the Court, a recitation of the pertinent events, party relationships and D&O policies is in order before discussing the substance 5 The Defendant Primary Insurers issuing policies under the AT&T Programs are Certain Underwriters at Lloyd s, London ( Lloyd s ) and National Union Fire Insurance Company ( National Union ). The Defendant Excess Insurers for these Programs are Columbia Casualty Company ( Columbia ), Continental Casualty Company ( Continental ), Federal Insurance Company ( Federal ), National U nion, Gulf Insu rance Co mpany ( G ulf ), Twin City Fire Insurance Company ( Twin City ), and Zurich American Insurance Company ( Zurich ). However, the excess insure rs ACE B ermuda L td. and Starr Excess Insu rance Co mpany are not parties in this a ction beca use their policies co ntain ADR clauses. See Certification of Houseal in Supp. of Defs. Phase I Mots. at 5, 6, 11-12, 17-19, AT&T Corp . v. Clarendon A m. Ins., D.I. 70/E -File 114 (J une 2, 20 05). Th e Defend ant Excess I nsurer Co lumbia did not file a motion for summary judgment as to the Williamson Fiduciary or Leykin Actions. 6 Except fo r National U nion s claims p ertaining to its 20 02 AT &T P rimary, 5 th, and 9th Excess Policies, which are addressed in this Opinion, other matters related to AT &T s First Amend ed Comp laint and the Defendants pending motions to dismiss, argued on November 17, 2005, are the subject of a forthcoming opinion. 5 of the Defendants Motions. Through this action, AT&T seeks damages and declaratory judgment as to its rights and the Defendants obligations under a number of D&O policies for liability it incurred or may incur, as a result of various shareholder lawsuits.7 At various points in time, both the now bankrupt At Home Corp. and its primary shareholder, AT&T, purchased D&O insurance Programs or Towers from the Defendants. All of the D&O policies at issue are Claims made policies and each Program or Tower consists of a primary policy and multiple excess policies. Once the underlying primary policy limits are exhausted by a covered loss, this type of policy structure operates to provide further coverage under each of the excess policies seriatim. Under such a structure, an excess insurer s coverage obligations are not triggered until the preceding or underlying excess policy is exhausted.8 Likewise, and except as otherwise provided by their terms, excess policies generally follow the form of and provide coverage in conformance with the terms, conditions and exclusions of an underlying insurance policy.9 In this case, the excess policies incorporate the terms, conditions and limitations of the Primary Policies and other underlying excess insurance policies.10 In this case, the Defendants Lloyd s, National Union and Genesis11 issued the underlying 7 See Comp l., AT&T Corp . v. Clarendon A m. Ins., D.I. 1/E-File 1 (Nov. 16, 2004). 8 A thorough description of the D&O policies, with a color coded chart depicting the AT&T Programs, can be found in the Certification of Houseal, D.I. 70/E-File 114, at 1-12. 9 See Certification of Houseal, D.I. 70/E-File 114, at 1-12. 10 See Gulf Ins. Co. Joinder in Cont l Cas. Co. Mot. for Part. Summ. J. for Decl. There is No Coverage for the Williamson Fid uciary & Leykin Actions U nder Exc ess Run-O ff & 2001 Cont l Po licies at ¶ 5, AT&T Corp. v. Clarendon Am. Ins., D.I. 73/E-File 118 (June 6, 2005). 11 For clarity and future reference, the group of insurers collectively referred to as the At Hom e Insurers issued the policies that comprise the At Home Towers. This group is composed of the Defendants Clarendon America Insurance Company, Genesis Insurance Company , North American Specialty Insurance Company, Faraday Capital Limited (individually and as Representative of the Underwriters at Lloyd s) and XL Specialty Insurance Comp any. 6 Primary Policies, while the other Defendant Insurers together with National Union provided excess coverage.12 The following four Policy Programs13 purchased by AT&T are at issue in the present action:14 1. The 1997 AT&T Program was issued for the July 1, 1997 to July 1, 2001 policy period. It is composed of a Lloyd s Primary Policy and seven excess policies.15 2. The 2001 AT&T Program was issued for the July 9, 2001 to July 9, 2002 policy period. It is composed of a Lloyd s Primary Policy and seven excess policies.16 3. The 2002 AT&T Program was issued for the July 31, 2002 to July 31, 2003 policy period. It is composed of a National Union primary policy and twelve excess policies.17 4. The 2001 AT&T Run-Off Program was issued for the July 9, 2001 to July 9, 2007 policy period. It is composed of a Lloyd s Primary Policy and eight excess policies.18 12 See Comp l., D.I. 1/E-File 1 , at ¶¶ 23-26 ; First Am. Co mpl. at ¶¶ 24 -29, AT&T Corp. v. Clarendon Am. Ins., D.I. 101/E-File 164 (Nov. 15, 2005). Not all excess insurers issuing policies under the AT&T Programs are parties to this ac tion. See supra note 5. 13 See supra text accompanying notes 3-4. Although not specifically addressed in this Opinion, the following three Policy Towers issued to At Home Corp. are also at issue in this coverage case: 1. The 1999-2000 At Home Tower issued for the policy perio d of July 19 99 to July 2 000. It is compo sed of a N ational Un ion primar y policy and tw o excess p olicies. 2. The 2000-2001 At Home Tower issued for the policy perio d of July 20 00 to July 2 001. It is compo sed of a N ational Un ion primar y policy and o ne excess p olicy. 3. The 2001-2002 At Home Tower issued for the July 8, 200 1 to July 8, 2 002 po licy period. It is compo sed of a G enesis Prim ary policy and four excess p olicies. See Op. Br. of the At Home Insurers, D.I. 68/E-File 112, at 1, 3 n.2; Nat l Union Op. Br., D.I. 69/E-File 113, at 3, 4-5, 23-25; Reply Br. by Nat l Union, D.I. 133/E-File 200, at 1 n.1, 2, 5. 14 Initially, only three AT&T P olicy Programs were a t issue. However, in its August 15, 200 5 First Amended Complaint, filed after National Union s Opening Brief in support of its summary judgment motion, AT&T asserted for th e first time claims for coverage against Natio nal Union policies und er the 200 2 AT& T Pro gram. National U nion respo nded to the se new claim s in its Reply B rief. See First Am. Co mpl., D.I. 10 1/E-File 16 4; Reply Br. by Nat l Union, D.I. 133/E-File 200, at 1 n.2. 15 See Certification of Houseal, D.I. 70/E-File 114, at 3-7. 16 Id. at 9-12. 17 Id. at 22-23. 18 Id. at 16-19. 7 D. The Underlying Shareholder Litigation: The At Home Litigation The lawsuit sub judice stems from AT&T s acquisition of At Home Corp. stock in March, 2000.19 On March 28, 2000, AT&T, At Home Corp. ( At Home ), Comcast Corporation ( Comcast ) and Cox Communications ( Cox ) entered into an agreement whereby AT&T acquired 25% of the total outstanding shares of At Home s common stock and approximately 74% of At Home s voting power. In the wake of this agreement, AT&T s acquisition, and At Home s subsequent demise, shareholders filed suit in Delaware, California and New York challenging the propriety of the March 2000 Transactions. Because the timing and nature of the allegations made in these shareholder actions is crucial to determining which policies, under what Programs, are implicated at this stage of the proceedings, a brief overview of the underlying shareholder suits is necessary. 1. Delaware - The Pittleman Action The Pittleman derivative action was filed on October 19, 1999, in the Court of Chancery of the State of Delaware, by an At Home shareholder against AT&T, At Home, and certain directors and officers of both companies. AT&T gave notice of this Action to certain of its insurers, which that issued policies as part of the 1997 AT&T Program.20 The Pittleman plaintiff asserted that the proposed March 2000 Transactions would be detrimental to At Home because, if effectuated, the Transactions would substantially increase AT&T s control over At Home and would give AT&T, an At Home direct competitor, power to 19 This acquisition is referred to in the underlying lawsuits and this Opinion as the March 2000 Transactions or the March 2000 Transaction. 20 See Certification of Houseal, D.I. 70/E-File 114, at ¶ 67. 8 control At Home for its own self-interests.21 Therefore, he sought to enjoin the March 2000 Transactions and to direct the defendants to account to At Home for damages and profits. To that end, the Pittleman plaintiff alleged, inter alia, that: (a) At Home was controlled by22 and its business depended on AT&T;23 (b) AT&T competed with At Home24 and conflicts of interest were inherent . . . in [these] business relationships; 25 (c) the March 2000 Transactions would eliminate checks and balances on AT&T s control;26 (d) through the March 2000 Transactions, AT&T will have the power to control At Home in its own self-interest to the detriment of At Home and its public shareholders, free of [those] checks and balances[;] 27 and (d) the March 2000 Transactions would give cable companies more favorable distribution arrangements, reduce [At Home s] share of subscriber fees, and make it easier for Cox and Comcast to terminate exclusivity. 28 Further, the plaintiff in Pittleman alleged that the March 2000 Transactions would: eradicate any protections that currently exist to protect At Home and its public shareholders from complete domination by the conflicted majority shareholder, AT&T.... Lacking independence, At Home will be unable to enter into agreements or engage in enterprises with third parties without heeding AT&T s wishes to which it will be subservient. As a result, At Home will lose valuable opportunities and be forced to accord AT&T and its allies advantageous terms which would be unwarranted if At Home were free 21 See Certification o f Housea l, D.I. 70/E -File 114, J oint Defens e Ex. 24, A mended Comp l., Pittleman v. At Hom e Corp., C.A. No. 17474 N C (Del. Ch. Aug. 2, 2000) (hereinafter J.D. Ex. ). 22 See J.D. Ex. 24, Amended Com pl. at ¶ 4. (hereinafter Pittleman ). 23 See id. ¶¶ 19, 20. 24 See id. ¶ 22. 25 Id. ¶ 26. 26 Id. ¶¶ 26, 31. 27 Id. ¶ 30. 28 Id. ¶¶ 20, 33. 9 to conduct its business unfettered by AT&T s dominance and directives.29 The Pittleman Action was dismissed, without prejudice, in June 2001.30 2. California - Cases Consolidated Into the At Home Stockholders Litigation a. Schaffer Schaffer, a class action for breach of fiduciary duties and injunctive relief, was filed on May 26, 2000, in the Superior Court of the State of California for the County of San Mateo, against AT&T, At Home, and certain directors and officers of AT&T and At Home.31 AT&T gave notice of the Schaffer action to those insurers that issued policies under the 1997 Run-Off Program.32 b. Yourman Yourman, a class action for breach of fiduciary duties and injunctive relief, was filed on May 30, 2000, in the same court, against AT&T, At Home, and certain directors and officers of both companies.33 In addition to being filed by the same attorneys in the same court against the same parties, the allegations made in the Yourman complaint are identical to those made in the 29 Id. ¶ 36. At argument, the Defendant Insurers referred to this particular allegation as the Pittleman Prophe cy. Tr. O ral Argume nt on Mo ts. for Summ . J. at 26, AT&T Corp . v. Clarendon A m. Ins., D.I. 161 (Sep. 20, 2005). 30 See Certification of Houseal, D.I. 70/E-File 114, at ¶ 68. 31 See J.D. Ex. 2 6, Schaffer v. At Ho me Corp , Case No. 413094 (Cal. Super. Ct., San Mateo Co. May 26, 2000) (hereinafter Schaffer ). 32 See Mem. in S upp. of Fe d. Ins. Mo t. for Part. Sum m. J., D.I. 72 /E-File 117 , at 11; see Nat l Union Op. Br., D.I. 69/E-File 113, at 7. 33 See J.D. Ex. 28, Yourman v. At Home Corp., Case No. 413115 (Cal. Super. Ct., San Mateo Co. May 30, 2000) (hereinafter Yourman ). 10 Schaffer complaint.34 AT&T noticed Yourman to the insurers that issued policies under the 1997 Run-Off Program.35 c. Ward Ward, a class action for breach of fiduciary duties and injunctive relief, was filed in the same court as the Yourman and Schaffer actions on September 6, 2001, against AT&T, At Home, and certain directors and officers of both companies.36 The Ward action involves the same parties, the same attorneys, and the same allegations as Schaffer and Yourman. It was also noticed to appropriate insurers.37 3. California - The San Mateo Action Eventually, Schaffer, Yourman and Ward were all consolidated in the Superior Court under the caption: In re At Home Stockholders Litigation (Master File No. 413094) (hereinafter the San Mateo Action ). On October 23, 2000, the plaintiffs in the San Mateo Action filed their First Amended Consolidated Complaint for Breach of Fiduciary Duties and Injunctive Relief on behalf of all At Home shareholders as of March 28, 2000, against AT&T, At Home, and certain directors 34 See Certification of Houseal, D.I. 70/E-File 114, ¶ 73, at 26. 35 See Mem. in S upp. of Fe d. Ins. Mo t. for Part. Sum m. J., D.I. 72 /E-File 117 , at 11; see Nat l Union Op. Br., D.I. 69/E-File 113, at 8. 36 See J.D. Ex. 3 0, Ward v. At Home Corp., Case No. 418233 (Cal. Super. Ct., San Mateo Co. Sept. 6, 2001) (hereinafter Ward ). 37 See Nat l Union Op. Br., D.I. 69/E-File 113, at 9. The parties do not dispute that the Ward action alleges claims that are interrelated with, the same as, or related to the Pittleman, Schaffer, and Yourman actions. Thus, AT&T does not seek coverage for the Ward Action in the p resent case. See AT& T Cor p. s An. Br. in Opp n to Nat l Unio n s Mot. for Part. Sum m. J. and/or J. on the Ple a. at 14, AT&T Corp . v. Clarendon A m. Ins., D.I. 126/EFile 175 (Aug. 15, 2005); Reply Br. by Nat l Union, D.I. 133/E-File 200, at 4. 11 and officers of AT&T and At Home. The First Amended Consolidated complaint in the San Mateo Action contains one cause of action against all the named defendants for breach of the fiduciary duties of care, candor and loyalty. 38 The San Mateo plaintiffs also alleged, inter alia, that: (a) on March 28, 2000, as part of the March 2000 Transactions, At Home announced an agreement between itself, AT&T, Comcast and Cox whereby AT&T would acquire 25% of At Home s total outstanding shares of common stock and approximately 74% of At Home voting power, effectively giving AT&T sole control over At Home;39 (b) At Home will be under the complete control and domination of AT&T[;]40 (c) AT&T now has the ability to receive more favorable distribution agreements...with At Home[;] 41 (d) Due to the...[March 2000 Transaction] At Home has become subject to both board and stockholder voting control by AT&T[;] and (e) the Purchase price of At Home s assets was not the result of arm s-length negotiations but was unilaterally set by AT&T, Cox, Comcast, and At Home and agreed to by defendants as part of a scheme to allow AT&T to obtain complete control of At Home s business at the lowest possible price[.] 42 In September 2002, for reasons outlined below, the Bankruptcy Court for the Northern District of California enjoined the San Mateo Action in favor of an action to be pursed by a litigation trust created during the bankruptcy proceedings. 38 See In re At Home Corp. Stockholders Litigation First Am. Consol. Compl., J.D. Ex. 31, at 12. 39 See J.D. Ex. 3 1, First Am. C onsol. Co mpl. at ¶¶ 3, 36, 3 7, In re At Home Corp. Stockholders Litigation, Master File No. 413094 (Cal. Super. Ct., San Mateo C o. Oct. 23, 2000). 40 Id. ¶ 6. 41 Id. 42 See id. ¶ 46. 12 4. California - The At Home Bankruptcy and Dismissal of the San Mateo Action On September 28, 2001, At Home filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of California.43 The Bankruptcy Court appointed Richard Williamson as Trustee of the At Home Bondholders Liquidating Trust. On June 28, 2002, At Home s Unsecured Bondholders filed a Motion to Enforce an Automatic Stay of the San Mateo Action, alleging that the claims asserted therein were derivative and therefore property of At Home s Bankruptcy Estate.44 On August 19, 2002, AT&T joined the Unsecured Bondholders in filing a Motion to Enforce the Automatic Stay and Prevent Prosecution of Derivative Claims of the San Mateo Action.45 The Bankruptcy Court granted this motion on September 10, 2002. The Bankruptcy Court ordered dismissal of the San Mateo Action on the ground that the claims asserted in that Action belonged to the debtor and should be prosecuted by the Bondholders Trustee, Richard Williamson.46 It found: [t]he gravamen of the San Mateo Action is that the March 2000 Agreement represented a decision by the majority shareholders to break up the corporation, close its business and sell its assets. Shareholders style the wrong embodied in this act as the majority shareholders failure to disclose the effects of the Agreement to minority shareholders, the majority shareholders breach of their duty to the minority shareholders to maximize value recovered upon breakup of the corporation. These allegations state a claims for damages, however, only to the extent that the March 2000 Agreement harmed the corporation (and hence the value of the minority shares). Thus, the harm claimed by Shareholders in the San Mateo Action is 43 See Certification of Houseal, D.I. 70/E-File 114, ¶ 90, at 29. 44 See id. ¶ 91, at 29. 45 See id. ¶ 92, at 29. 46 In re At Home Corp., Bankr. N.D. Cal., Bankr. Case No. 01-3-2495-TC, Carlson, T. (Sept. 10, 2002) (Order) (J.D. Ex. 3 2). 13 closely intertwined with the harm suffered by the corporation and its creditors from the same transaction.... Under the confirmed plan, all causes of action of the corporation against the controlling shareholders pass to the Bondholders Liquidating Trust... The plan requires the Trust to prosecute an action against the same defendants for the same acts alleged in the San Mateo Action.47 Consequently, the Bankruptcy Court enjoined the prosecution of the San Mateo Action to prevent interference with the action to be brought by the corporation. 48 On November 13, 2002, the Bondholders Liquidating Trust filed an action asserting the derivative claims of At Home against the defendants, including AT&T and certain of it and At Home s Board of Directors.49 The San Mateo plaintiffs appealed the Bankruptcy Court s September 10, 2002 Order to the U.S. District Court for the Northern District of California. In its January 8, 2003 response to that appeal, AT&T urged the U.S. District Court to affirm the Bankruptcy Court s Order, arguing that permitting duplicative litigation in multiple jurisdictions would cause confusion and necessarily prejudice the non-bankrupt defendants, including AT&T Corp. 50 On September 29, 2003, the U.S. District Court affirmed the Bankruptcy Court s September 10, 2002 Order,51 prompting the San Mateo plaintiffs to appeal that decision to the U.S. Court of Appeals for the Ninth Circuit. AT&T urged the Ninth Circuit to affirm the lower courts decisions based on the existence of substantial overlap between the San Mateo and the Bondholders 47 In re At Home Corp., Bankr. N.D. Cal., Bankr. Case No. 01-3-2495-TC, Carlson, T. (Sept. 10, 2002) (Mem .) at 5, 7. (J.D . Ex. 32) (e mphasis ad ded). 48 In re At Home Corp., N.D. Cal., No. 02-04767 JSW , White, J. (Sept. 29, 2003) (ORDER ) (J.D. Ex. 34). 49 See Certification of Houseal, D.I. 70/E-File 114, ¶ 96, at 30. 50 J.D. Ex. 33, AT&T Corp. s Resp. to San Mateo Pls. Appeal of the Bankr. Ct. s Sep. 10, 2002 Order at 2, In re At Home Corp., Civ. Case No. C 02-4767 CW (N.D. Cal. Jan. 8, 2003). 51 In re At Home Corp., N.D. Cal., No. C 02-04767 JSW , White, J. (Sep. 29, 2003) (ORDE R) (J.D. Ex. 34). 14 Actions:52 [t]he purported direct claim to be pursued in state court and the purported derivative claim previously asserted in the San Mateo Action and now sought by the Bondholders to be pursued in an action filed in Santa Clara Superior Court involve identical allegations of fact, an identical claim for breach of fiduciary duty, and identical prayers for relief. Were the two cases allowed to proceed simultaneously, the substantial overlap between them would create a serious risk of conflicting rulings of fact and law.... And obviously, it would be a wasteful and inefficient use of scarce judicial and party resources to allow duplicative claims to go forward in two courts at once.53 The San Mateo plaintiffs appeal to the Ninth Circuit is still pending. 5. California - The Williamson Fiduciary Action On November 7, 2002, the Trustee for the Bondholders Liquidating Trust, Richard Williamson, filed the initial complaint in Williamson v. AT&T Corp., et al. (the Williamson Fiduciary Action ) against AT&T, At Home, and certain directors and officers of AT&T and At Home.54 In the First Amended Complaint, filed on June 20, 2003,55 Williamson alleges that: (a) the defendants breached their fiduciary duties to At Home based on AT&T s having resolved all conflicts of interest between it and At Home in AT&T s own self-interest over a two-year period, beginning with its taking complete control of At Home in the March 2000 Transactions;56 (b) 52 J.D. Ex. 3 5, Br. of D ef.-Appellee AT& T Cor p. at 5, In re At Home Corp., No. 03-17085 (9 th Cir. Mar. 29, 2004) (emphasis added). 53 Id. at 5-6 (emphasis added). 54 See J.D. Ex. 3 6, Comp l. & Dem and for Jur y Trial, Williamson v. AT&T Corp., Case No. CV 812506 (Cal. Super. Ct., Santa Clara Co. Nov. 7, 2002). 55 See J.D. Ex. 3 7, First Am. C ompl. & Deman d for Jury T rial, Williamson v. AT&T Corp., Case No. CV 812506 (Cal. Super. Ct., Santa Clara Co. June 20, 2003). 56 See id. ¶¶ 1-7. 15 [p]ursuant to...the March 2000 Transactions, [1] AT&T gained complete control of At Home s Board ... [2] Cox and Comcast received, among other things, the ability at a later date to put some or all of the At Home shares to AT&T, which ultimately allowed them to realize more than $3 billion from AT&T; 57 (c) AT&T, Cox and Comcast received an unfair split of the revenue generated from customers of the At Home service; 58 (d) in connection with the March 2000 Transactions, AT&T and the other defendants contravened every cardinal principle of corporate governance upon which our system depends. For two years, AT&T exercised a stranglehold on the Board of Directors of now bankrupt At Home Corporation[;] 59 (e) as a direct result of the March 2000 Transactions At Home receives nothing for losing critical leverage over Cox and Comcast. And AT&T extends its contracts with At Home on terms that continue to be uneconomical for At Home[;] 60 (f) the March 2000 Transactions resulted in giving AT&T sole control over At Home and in exchange for giving AT&T control, Cox and Comcast were given a $3 billion pay-off for which At Home received nothing; 61 (g) AT&T did not follow the basic precepts of corporate governance, and that at every turn, [i]n derogation of their fiduciary duties to At Home, defendants did what was in AT&T s best interests, even when it meant damaging At Home[;] 62 (h) the March 2000 Transactions were entirely unfair to At Home and plaintiffs were damaged as a result of the March 2000 Transactions;63 and (i) as part of the March 2000 Transactions, Cox and Comcast jointly agreed to waive most of their 57 Id. ¶ 42. 58 Id. 59 Id. ¶ 2. 60 Id. ¶ 5(a). 61 See id. ¶¶ 5(a), 40-4 6. 62 Id. ¶ 6. 63 See id. ¶¶ 146-15 4. 16 rights under the Stockholders Agreement, including their right to elect Cox and Comcast designees to the Board. The Cox and Comcast directors resigned from the At Home Board on August 28, 2000. From that date until after the bankruptcy filing in September 2001, AT&T at all times exercised complete control over the At Home Board. 64 In support of its January 10, 2003 Motion to Dismiss or Stay for Forum Non Conveniens65 filed in the Williamson Fiduciary Action, AT&T summarized a portion of the allegations in that Action as follows: Plaintiff alleges, inter alia, (1) that the defendants breached their fiduciary duties to At Home causing At Home to enter into certain allegedly unfair agreements with Cox and Comcast in March 2000, permitting At Home s cash situation to deteriorate, misappropriating At Home s proprietary technology, engaging in an unfair strategy either to buy At Home at a cheap price or to build out its own network for providing high-speed Internet access, and generally managing and operating At Home in AT&T s, as opposed to At Home s interest (Cmplt. ¶¶ 121-59); (2) that AT&T breached certain contractual obligations to At Home (id. ¶¶ 160-68); (3) that AT&T operated At Home as its alter ego (id. ¶¶ 169-71); (4) that AT&T, Eslambolchi, and Burns misappropriated At Home s proprietary technology and trade secrets through their in depth access to [At Home s] Trade Secrets by virtue of Project 90'' (id. ¶¶ 172-84); (5) that AT&T, Eslambolchi and Burns breached At Home s confidence by using At Home s proprietary technology for AT&T s own purposes (id. ¶¶ 185-98); (6) that AT&T engaged in unfair competition in violation of California Business & Professions Code Sections 17200 et seq. (id. ¶¶ 199-202); and (7) that AT&T has been unjustly enriched by its conduct vis-à -vis At Home (id. ¶¶ 203-04).66 On November 15, 2002, the Bondholders Liquidating Trust brought a separate action in the 64 Id. ¶ 43. 65 J.D. Ex. 38, Def. AT&T Corp. s Mem. of P.& A. in Supp. of Mot. to Dismiss or Stay for Forum Non Conveniens, Williamson v. AT&T Corp., Case No. CV 8125 06 (Cal. Super. Ct., Santa Clara Co. Jan. 10, 2003). 66 Id. at 3. 17 U.S. District Court, Northern District of California, captioned Williamson v. AT&T Corp. (the Williamson Patent Action ).67 In this action, Williamson alleged that AT&T infringed on an At Home patent.68 Again, in support of its Motion to Dismiss or Stay for Forum Non Conveniens, AT&T represented that the Williamson Patent Action is related to the trade secret misappropriation and breach of confidence claims in [the Williamson Fiduciary Action]. 69 On May 3, 2005, AT&T announced its settlement of both the Williamson Fiduciary Action and the Williamson Patent Action for $340 million.70 Pursuant to the terms of the settlement agreement, AT&T and Comcast agreed to relinquish claims to approximately $60 million being held in reserve by the At Home Bankruptcy Estate to satisfy AT&T s pending claims against At Home.71 6. New York - Cases Consolidated Into the Leykin v. AT&T, et al. Litigation a. Leykin Leykin is a securities class action suit, filed on March 5, 2002, in the United States District Court for the Southern District of New York against AT&T, and certain directors and officers of AT&T and At Home.72 67 See J.D. Ex. 4 1, Comp l. for Patent Infrin gement, Williamso n v. AT&T Corp., Case No. C 02 5442 (N.D. Cal. Nov. 15, 2002). 68 On July 22, 2005, the parties stipulated to the dismissal of AT&T s coverage claims for the Williamson Patent Action. Thus, this action is not at issue in the present case. See AT& T An. B r. in Opp n to Nat l Unio n s Mot. for P art. Summ. J ., D.I. 126 /E-File 175 , at 14-15; R eply Br. by N at l Union, D .I. 133/E-F ile 200, at 4 . 69 J.D. Ex. 3 8, Def. AT &T C orp. s M em. of P. & A., at 5 . 70 See Certification of Houseal, D.I. 70/E-File 114, ¶ 111, at 34; Press Release, AT&T, AT&T Settles Legal Claims Related to the At Home Corp. Bankr. (May 3, 2005 ) (J.D. Ex. 39). On May 5, 2005, the Bond holders Liquidating Trust mo ved for ap proval of the May 3, 2 005 settlem ent. See J.D. Ex. 41, M ot. of Bondho lders Liquidating Trust for Approval of Compromise With AT&T Corp. & the AT&T Defs. Pursuant to Bankr. R. 9019 at 1, In re At Home Corp., Case No. 01-32495-T C (Bankr. N.D. Cal. May 5, 2005 ). AT&T entered this settlement agreeme nt without the co nsent of the D efendant Ins urers. 71 See Certification o f Housea l, D.I. 70/E -File 114, ¶ 1 11, at 34; P ress Release , AT& T, supra note 75. 72 See J.D. Ex. 4 2, Class Ac tion Com pl., Leykin v. AT&T Corp., Case No. 02 CV 1765 (S.D.N.Y. Mar. 5, 2002). 18 b. Unger Unger is a securities class action suit, filed on March 11, 2002, in the United States District Court for the Southern District of New York against AT&T and certain of it and At Home s directors and officers.73 c. Eksler Eksler is a securities class action suit filed in the United States District Court for the Southern District of New York on March 14, 2002, with a complaint virtually identical to the Unger complaint, against AT&T and certain of it and At Home s directors and officers.74 d. James James is a shareholder class action suit, filed on July 3, 2003, in the United States District Court for the Southern District of New York against AT&T and certain of both companies directors and officers.75 The James plaintiffs alleged violations of §§10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5. James was filed by the same plaintiffs attorneys as Leykin and the complaint is nearly identical to the Leykin Consolidated Complaint. Ultimately, finding the James Action duplicative of Leykin, the District Court dismissed it without prejudice.76 73 See J.D. Ex. 4 3, Class Ac tion Com pl., Unger v. AT&T Corp., Case No. 02 CV 1978 (S.D.N.Y. Mar. 11, 74 See J.D. Ex. 4 4, Class Ac tion Com pl., Eksler v. AT&T Corp., Case No. 02 CV 2078 (S.D.N.Y. Mar. 14, 75 See J.D. Ex. 4 5, Class Ac tion Com pl., James v. AT&T Corp., Case No. 03 CV 4985 (S.D.N.Y.Jul. 3, 76 See J.D. Ex. 4 6, James v. AT&T Corp., 334 F. Supp. 2d 410, 412-13 (S.D.N.Y. 2004). 2002). 2002). 2003). 19 The Leykin Action e. On November 7, 2002, Leykin, Eksler, and Unger were consolidated under the caption, Leykin v. AT&T Corp., et al. (the Leykin Action ).77 The consolidated Leykin Action is a putative class action suit, filed on behalf of At Home s public shareholders during the period from March 28, 200078 to September 28, 2001. The Leykin plaintiffs allege both securities and common law fraud, and breach of fiduciary duty by AT&T, its directors and officers, certain of At Home s directors and officers, and others. In the First Amended Consolidated Complaint the Leykin plaintiffs allege the following: (a) AT&T developed the Steamboat Project 79 in February 2000, and that during this project, AT&T allegedly copied, took and converted to its own possession, benefit and use At Home s proprietary technology; (b) the plan, the subsequent conversion and its material adverse consequences for At Home were never revealed to the public until partial revelations of the consequences (but not of the plan nor of the conversion) began to occur during 2001; 80 and (c) [a]s part of such plan, on March 28, 2000, At Home entered into a series of agreements with AT&T, Cox and Comcast 81 and an important purpose for AT&T in entering these agreements was to ensure that AT&T could execute its plan to copy and convert At Home s proprietary technology to AT&T s own possession, use and benefit and make AT&T independent from At Home and its need for At Home s services.82 77 See J.D. Ex. 4 7, Conso l. Class Action Comp l., Leykin v. AT&T Corp., Case No. 02 CV 1765 (LLS) (S.D.N .Y. Nov . 8, 2002 ). 78 According to the Leykin plaintiffs, the Ma rch 200 0 Trans actions were announce d on M arch 28, 2 002. 79 J.D. Ex. 4 8, First Am. C onsol. Class Action Co mpl. at ¶ 60, Leykin v. AT&T Corp., Case No. CV 02-CV1765 (LLS)(S.D.N.Y . Feb. 24, 2004). 80 Id. 81 Id. ¶ 61(a). 82 Id. ¶¶ 66, 137. 20 The Leykin plaintiffs further assert that AT&T had, by March 28, 2000 at the latest, a plan to copy and convert At Home s proprietary technology and that [a]n important purpose of transactions therein which required shareholder approval was to ensure that AT&T could execute its plan to copy and convert At Home s technology. 83 They claim that after the March 28, 2000 agreements were signed, AT&T personnel began asking for, and were given, unique and unfettered access to At Home s proprietary technology, intellectual property and know-how. 84 The First Amended Consolidated Complaint also alleges: (a) AT&T converted and used At Home s formerly proprietary technology to build and deploy a parallel network that would compete with At Home as soon as AT&T was not bound by its exclusivity obligations to At Home[;]85 (b) AT&T dominated and controlled At Home s finances and strategic relationships such that At Home management could not exercise independent judgment, and At Home could neither access the capital markets nor align with an appropriate strategic partner[;] 86 (c) the defendants violated the securities laws and committed fraud, inter alia, by failing to disclose AT&T s plan to convert At Home s proprietary technology and artificially inflating the market price of and demand for At Home common stock[;]87 (d) At Home s directors breached their fiduciary duties of candor, due care, loyalty and good faith to At Home shareholders between March 28, 2000 and the end of the class period, when At Home filed for bankruptcy;88 and (e) AT&T, as a controlling and dominant 83 Id. ¶ 136(a),(b). 84 Id. ¶ 63(b). 85 See Id. ¶ 79. 86 Id. ¶ 103. 87 See Leykin First Am. Co nsol. Class A ction Com pl., J.D. Ex . 48, ¶¶ 120 -33, at 47-5 1; Leykin Consol. Class Action Compl., J.D. Ex. 47, at ¶¶ 120-37. 88 See Leykin First Am. Co nsol. Class A ction Com pl., J.D. Ex . 48, ¶ 138 -47, at 52-5 5. 21 shareholder, owed fiduciary duties to the other shareholders of At Home. These duties included a fiduciary duty of entire fairness to minority shareholders.... AT&T breached this fiduciary duty of entire fairness and full candor. 89 AT&T represented in its January 10, 2003 Motion to Dismiss or Stay for Forum Non Conveniens,90 filed in the Williamson Fiduciary Action, that the Williamson Fiduciary Action implicate[s] many of the same issues already being litigated in the Leykin Action.91 On February 11, 2003, AT&T moved to dismiss the Leykin Action asserting in part that a large portion of the [Leykin Consolidated] Complaint centers around plaintiffs wholly unsubstantiated allegations that AT&T had formulated by March 28, 2000 and later carried out a secret plan to convert At Home s proprietary technology to its own use. 92 The U.S. District Court for the Southern District of New York certified a class in the Leykin Action but dismissed the Action on March 23, 2006.93 E. The Coverage Action -AT&T Corp. v. Clarendon Am. Ins., et. al. In the present action, AT&T asserts that it is entitled to coverage for losses arising from the Williamson Fiduciary and Leykin Actions under the AT&T Programs and At Home Towers, which cover several policy periods, spanning the year 1997 through the year 2007. The Defendants counter that coverage, if any exists at all, is limited by the terms of their policies to the 1997 AT&T Program and is barred under other Program. 89 Leykin Consol. Class Action Compl., J.D. Ex. 47, ¶ 143, at 51. 90 See also discussion o f Williamson Fiduciary Action allegations supra at pp. 17-18. 91 AT&T Mem. of P.& A. in Supp. M ot. to Dismiss or Stay for Forum Non Conveniens, J.D. Ex. 38, at 1. 92 J.D. Ex. 49, Mem. in Supp. of Mot. to Dismiss of Defs. AT&T Corp., C. Michael Armstrong, Frank Ianna, Ho han Gyan i, Charles H . Noski, D aniel H. So mmers, M ufit Cinali, John C . Petrillo, Raym ond Liguo ri, & Hossein E slambolch i at 5, Leykin v. AT&T Corp., Case No. CV 02-CV -1765 (LLS)(S.D.N.Y. Feb. 11, 20 03). 93 Leykin v. AT&T C orp., S.D.N.Y., 02 Civ. 1765 (LLS), Stanton, L. (Mar. 23, 2006) (Op . And Order.) 22 II. STANDARD OF REVIEW A. Summary Judgment Summary Judgment may only be granted where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. 94 To make this determination, the Court considers the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits.95 In evaluating motions for summary judgment, the Court must view all facts in the light most favorable to the non-moving party. 96 Thus, the moving party bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.97 Consequently, if the moving party establishes there is no genuine issue of material fact regarding the dispute ... that party is entitled to judgment as a matter of law, [and] summary judgment should be granted. 98 Finally, [t]o the extent that the case s facts are not in dispute and the insurance policies are not ambiguous, the Court will decide coverage issues through ... a motion for summary judgment pursuant to Superior Court Civil Rule 56.99 B. Rules of Construction for Contracts of Insurance 94 Super. C t. Civ. R. 56(c ); Viad Corp. v. MCII Holdings, Inc., 2003 W L 22853414 , at *3 (Del. Super.), citing In Re Asbestos Litigation, 673 A.2d 159, 163 (Del. 1996). 95 Super. Ct. Civ. R. 56(c). 96 Viad, 2003 WL 22853414, at *3; Cirka v. Nat l Union Fire Ins. Co. of Pittsburgh, PA, 20 0 4 W L 18132 83, at *3 (D el. Ch.) . 97 Viad, 2003 WL 22853414, at *3. 98 Cirka, 2004 WL 1813283, at *3. 99 Hercules Inc. v. AIG Aviation Inc., 776 A.2 d 550, 5 58 (De l. Super. Ct. 2 000), aff d 760 A.2 d 162 (D el. 2000). 23 As a preliminary matter, the Court recognizes the parties disagreement as to whether the insurance policies at issue should be interpreted in accordance with New York, New Jersey or California law.100 However, the parties agreed during the September 20, 2005 Hearing that resolution of the pending motions does not require the Court to decide the issue at this time.101 Thus, because neither the Court nor the parties believes there are significant conflicts on any of the relevant legal principles, the Court need not determine which state law controls and will set forth the guiding legal principles of insurance policy construction applicable in all three states.102 In so doing, the Court recognizes that it is delaying the inevitable, in that the resolution of future interpretation and construction questions in this case will necessitate a determination of the 100 Tr. Ora l Argumen t on Mo ts. for Summ . J. at 105-1 06, 215 , AT&T Corp . v. Clarendon A m. Ins., D.I. 161 (Sep. 20, 2005); Cont l Cas. Co. Mem. of Law in Supp. of its Mot. for Part. Summ. J. For a Decl.There is No Coverage for the Williamson Fid uciary & Leykin Actions Under the Excess Run-Off & Cont l Policies at 9 n.4, AT&T Corp . v. Clarendon A m. Ins., D.I. 65/E-File 109 (June 2, 2005); Nat l Union Op. Br., D.I. 69/E-File 113, at 17 n.10 (argu ing that Californ ia law applies to their policies ); Op. Br . of the At Ho me Insurers in Supp. o f Their M ot. for Part. Summ. J. on Pl. s Claims for Coverage for the Williamson Fiduciary & Leykin Actions Under the 2001 At Home Program, D.I. 68/E -File112, a t 14-15 n.4 ; AT& T Cor p. s Conso l. An. Br. in O pp n to: (1) Fed. Ins. Co . s Mot. for Part. Summ. J. as to 2001-2007 AT &T Run-Off Policies; (2) Cont l Cas. Co. s Mot. for Part. Summ. J. for a Decl.There is No Coverage for the Williamson Fiduciary & Leykin Actions U nder th Ex cess Run-O ff & 2001 Cont l Policies; & (3) Zurich A m. Ins. Co. s M ot. for Summ . J. at 40 n.22 , AT&T Corp . v. Clarendon A m. Ins., D.I. 124/EFile 173 (Aug. 15, 2005); AT&T An. Br. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 16-21. 101 At oral argument AT&T asserted that, while New Jersey law applies, the Court can follow Alstrin v. St. Paul Mercury Ins. Co., 179 F. Supp. 2d 376, 388 (D . Del. 2002) because, based on the Defendants arguments, no apparent conflict of law exists between New York and New Jersey. Tr. Oral Argument at 105-106. Later, AT&T conced ed Californ ia law applies , but asserted th at the At Ho me Insurers did not reve al any differenc es in California law that would ... mean ... New York or New Jersey law would hold any differently. Id. at 106-107. Finally, Fede ral argued th at New Y ork law ap plies, but agre ed it doesn t matter for pur poses of this m otion. Id. at 215. 102 Alstrin v. St. Paul Mercury Ins. Co., 179 F. Supp. 2d 376, 388 (D . Del. 2002). Cf. Int l Bus. Mach. Corp. v. Liberty Mut. Ins. Co., 363 F.3 d 137, 1 43 (2d C ir. 2004) ( applying N ew York and Califor nia law to determine insurer s duty to defend against employee toxic tort suits as [c]hoice of law does not matter, ... unless the laws of the co mpeting jur isdictions are a ctually in conflict. ); FileNet Corp. v. Ch ubb Corp ., 735 A.2d 1203, 1207 (N.J. Super. Ct. Law Div. 1997) (finding [o]n the issue of interpretation of the insurance contract, New Jersey and California law are not in co nflict . 24 threshold issue of which law applies to these policies.103 In New York, New Jersey and California, as in Delaware, determining whether insurance contract language is ambiguous is a question of law for the Court to decide.104 As a general rule, these courts interpret insurance policy language according to the general rules of contract interpretation.105 Thus, in the absence of ambiguity, these courts construe insurance policies by giving the policy language its common, plain, and ordinary meaning,106 unless used by the 103 15 App leman on In surance § 1 12.1 (2d ed. 200 5). 104 K. Bell & Assocs, Inc. v. Lloyd s U nderwriters, 97 F.3d 632, 637 (2d C ir. 1996); Zunenshine v. Executive Risk Indem., Inc., 1998 W L 4834 75, at *3 (S.D .N.Y.); Tomco Painting & Contracting, Inc. v. Transcontinental Ins. Co., 801 N .Y.S.2d 819, 82 0 (N.Y . App. D iv. 2005) ; 2619 Re alty, LLC v. Fid. & Gu ar. Ins. Co., 756 N .Y.S.2d 564, 56 6 (N.Y . App. D iv. 2003) ; Bd. of Managers of Yardarm Condo. II v. Fed. Ins. Co., 669 N.Y.S.2 d 332, 3 33 (N.Y . App. D iv. 1998) . See Haggerty v. Fed. Ins. Co., 32 Fed. Appx. 251, 253 (9th Cir. 2002); Church Mut. Ins. Co. v. U.S. Liab. Ins. Co., 347 F. S upp. 2d 880, 88 3 (S.D. C al. 2004 ); Town of Harrison v. Nat l Union Fire Ins. Co., 675 N.E.2d 829, 832 (N.Y. 1996); Waller v. Tr uck Ins. E xch., Inc., 900 P.2 d 619, 6 27 (Cal. 1995); N. Am. Phillips Corp., 1995 WL 628444, at *7 (Del. Super.) (applying New York law); Nat l Union F ire Ins. Co. v. Transp. Ins. Co., 765 A.2d 240, 243 (N.J. Super. Ct. App. Div. 2001); Powe ll v. Alema z, Inc., 760 A.2d 1141, 1144 (N .J. Super. C t. App. D iv. 2000) . Accord Hercules, Inc. v. AIU Ins. Co., 784 A.2d 481, 489 (D el. 2001); Rhone-Poulenc Basic Chems. Co. v. Am. Motorist Ins. Co., 616 A.2 d 1192 , 1195 (D el. 1992 ); AT&T Wireless Serv. Inc. v. Fed. Ins. Co., 2006 WL 2 67135, at *4 (Del. Super.). 105 Abner, H erman & Brock, In c., 308 F. S upp. 2d 331, 33 5 (S.D.N .Y. 200 4); Lefrak Org., Inc. v. Chubb Custom Ins. Co., 942 F. S upp. 94 9, 952 (S .D.N.Y .1996); State v. Am. Mfrs. Mut. Ins. Co., 593 N.Y.S.2d 885, 886 (N.Y. App. Div. 1993) (relying on Loblaw Inc . v. Employers Lia b. Assur. Corp ., 456 N.Y.S.2d 40, 442 (N.Y.1982)); Powe rine Oil Co ., Inc. v. Sup er. Ct., 118 P.3 d 589, 5 97 (Cal. 2 005); Montrose Chem. Corp. v. Admiral Ins. Co., 913 P.2 d 878, 8 88 (Cal. 1 995); Bank o f the West v. S uper. Ct. , 833 P.2 d 545, 552 (Cal. 1992); Rosario v. Haywood, 799 A.2 d 32, 38 (N.J. Sup er. Ct. App . Div. 200 2). Cf. as to clear and unambiguous policies Hebela v. Healthcare Ins. Co., 851 A.2d 75, 80-82 (N.J. Super. Ct. App. Div. 2004 ) (citing Kampf v. Franklin Life Ins. Co., 161A.2d 717, 72 0-21 (N.J. 1960)). Accord New Castle County v. Hartford Acc. & Indem. Co., 970 F.2d 1267, 1270 (3d Cir. 1 992); E.I. duPont de Nemours & Co. v. Allstate Ins. Co., 879 A.2d 929, 938 (D el. Super. Ct. 2004) (relying on Rhone-Poulenc, 616 A.2 d 1192 , 1196 (D el.1992 )); compare Progressive Cas. Ins. Co. v. Hurley, 765 A.2d 195, 201 (N.J. 2001) (stating in a UM coverage case that New Jersey courts consistently have recognized that insurance policies are contracts of adhesion and, as such, are subject to special rules of interpretation. ). 106 Zunenshine, 1998 WL 4 83475, at *3 (S.D.N.Y.) (stating that [w]hen a contract is not ambiguous, the court should assign the plain and ordinary meaning to each term and interpret the contract without the aid of extrinsic evide nce. (citation o mitted)); Escobar v. Colonial Indem. Ins. Co., 804 N.Y.S.2d 360, 361-62 (N.Y. App. Div. 200 5); Physicians Reciprocal Insurers v. Abraham, 757 N.Y.S.2d 330, 331 (N.Y. App. Div. 2003) (stating that clear and unambiguous provisions in an insurance policy should be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement .... (citing Gov t Employees Ins. Co. v. Kligler, 366 N.E.2d 865 (N.Y. 1 977))); Montrose Chem., 913 P.2d 878, 888 (Cal. 1995) (applying California s statutory rule of contract construction, which requires that the clear and explicit meaning of these provisions, interpreted in their ordinary and popular sense, controls judicial interpretation unless used by the parties in a technical sense, or unless a special 25 parties in a technical sense or where a special meaning is given to them by usage. 107 Accordingly, as a general rule,108 policy language found to be clear and unambiguous should be interpreted and enforced as written.109 meaning is give n to them by u sage. ); Bay Cities Paving & Grading, Inc. v. Lawyers Mut. Ins. Co., 855 P.2d 1263, 1270 (Cal. 1993); Cunning ham v. Un iversal Underw riters, 120 Cal. Rptr. 2d 162, 168 (Cal. Ct. App. 2002) (reversing and remanding summary judgment after finding no coverage under commercial general liability (CGL) for tenant claim against insured and explaining [i]f the policy provision is unambiguous ... it must be interpreted according to this plain meaning. (citing Ray v. Valley Forge Ins. Co., 92 Cal. Rptr. 2d 473, 476 (Cal. Ct. App. 1999))); President v. Jenkins, 853 A.2 d 247, 2 54 (N.J . 2004) (e xplaining [w] hen interpre ting an insuranc e policy, courts should give the policy's words their plain, ordinary meaning. (citing Zacaria s v. Allstate Ins. C o., 775 A.2d 1262, 1 265 (N .J. 2001 ))). See Gibson v. Callaghan, 730 A.2d 1278, 1282 (N.J. 1999) (stating that well-established rules for interpr eting insurance policies hav e develop ed .... the word s of an insuranc e policy are to be given their plain, ordinary meaning .... [i]n the absence of any ambiguity, courts should not write for the insured a better policy of insurance than the one purchased. (quoting Longo bardi v. C hubb In s. Co., 582 A.2d 1257 , 1260 (N.J. 1990))); N. Am. Ph illips Corp., 1995 WL 626 036, at *2 (Del. Super.) (explaining that under New York law [a]n unambigo us policy pro vision must be accorde d its plain and ordinary m eaning. ). Cf. Church Mut. , 347 F. Supp. 2d 880, 884 (S.D. Cal. 2004) (stating [w]here possible, the court looks solely to the terms of the policy; the clear and explicit meaning of the policy terms, understood in their ordinary and popular sense, will govern the interpretation . ); ML Direct, Inc. v. TIG Specialty Ins. Co., 93 Cal. Rptr 2d 846, 850 (Cal. Ct. App. 2000) (explaining in context of declaratory judgment action against D&O insurer that the fundamental goal of contract interpretation is to give effect to the parties intentions, which, ... should be inferred solely from the written terms of the policy. ); Cooper Companies v. Transcon. Ins. Co., 37 Cal. Rptr. 2d 508, 512 (Cal. Ct. App. 1995) (explaining that the Californ ia Suprem e Court clarified the rules for interpreting allegedly ambiguous insurance policies [citations omitted] as follows: If contractual language is clear and explicit, it governs. (citing Bank of the W est, 833 P.2d 545 (Cal. 1992))). Accord Rhone-Poulenc, 616 A.2d 1192, 119 5 (Del. 1992). 107 Int l Bus. Mach. Corp., 363 F.3 d 137, 1 47 (2d C ir. 2004) ( applying sha red New York an d California principles o f insurance co ntract interpre tation), citing McGrail v. Equitable Life Assur. Soc. of U.S., 55 N.E.2d 483 (N.Y. 1944) and Vand enberg v. Super. C t., 982 P.2d 229, 244-45 (Cal. 199 9)). See Montrose Chem. Corp., 913 P.2d 878, 888 (Cal. 1995) ( stating that the clear and explicit meaning ... interpreted in ... ordinary and popular sense, contro ls judicial interp retation unless u sed by the p arties in a technic al sense, or un less a special m eaning is given to them by usage. ); Bay Cities Paving & Grading, Inc., 855 P.2 d 1263 , 1270 (C al. 1993 ); Cooper Companies, 37 Cal. Rptr. 2d 508, 511-12 (Cal. Ct. App. 1995) (explaining California s three-step framework for insurance policy interpretation in the context of an appeal from a ruling for a liability insurer in context of underlying breast imp lant cases). Accord U.S. Mineral Products Co. v. Am. Ins. Co., 792 A.2d 500, 509 (N.J. Super. Ct. App. Div. 2002) (recognizing, in the context of asbestos manufacturer s declaratory judgment action, that a court s function on re view is to searc h broad ly for the prob able intent of b oth parties in an effort to find the re asonable meaning in maintaining the express general purposes of the policy. ); Sears Roeb uck & Co. v. Nat U nion Fire Ins. Co., 774 A.2 d 526, 5 32 (N.J . Super. Ct. A pp. Div. 2 001) (inter preting gene ral liability policies (G LC) in consolidated personal injury suits); Hercules, Inc., 784 A.2 d 481, 4 89-90 (D el. 2001 ), citing Rhone-Poulenc, 616 A.2d 1192, 1195-96 (Del. 1992). 108 Compare infra text accompanying notes 121-125. 109 See Fed. Ins. Co. v. Campbell Soup Co., 885 A.2d 465, 468 (N.J. Super. Ct. App. Div. 2005) (explaining that [w]hen the express language of an insurance policy is clear and unambiguous, it must be enforced as written in the context of declaratory judgment action arising from underlying actions involving exchange between parent and subsidiary of securities); Nav-Its, Inc. v. Selective Ins. Co. of Am., 869 A.2d 929, 933 (N.J. 26 Generally, an insured s burden is to establish that a claim falls within the basic scope of coverage, while an insurer s burden is to establish that a claim is specifically excluded.110 Courts 2005) (explaining if the policy langua ge is clear, the p olicy should b e interpreted as written. ); President, 853 A.2d 247, 254 (N.J. 2004) (interpreting a claims made professional liability policy and explaining that [i]f the policy terms are clear, courts should interpret the policy as written and avoid writing a better insurance policy than the one purchase d. ); Liberty Surplus Ins. Corp. v. Segal Co., 2004 WL 2 102090, at *1 (S.D.N.Y. 2004 ) (declaratory judgment action by excess liability insurer to determine its duty to indemnify against suit by county); Richards v. Princeton Ins. Co., 178 F. Supp. 2d 386, 392 (S.D .N.Y. 2001) (explaining that New Jersey law holds where the language of an insurance policy is clear, a court must enforce its terms as written in the context of a declaratory judgment action to determine if a CGL policy provides coverage for personal injury action); Andy Warhol Found. for Visua l Arts, Inc. v. F ed. Ins. Co ., 189 F.3d 208, 215 (2d Cir. 1999) (explaining if the language of the insurance contract is una mbiguou s, we apply its term s in the contex t of a declara tory judgm ent action aga inst a liability insurer arising from a copyright infringement action); Oot v. Home Ins. Co. of Indiana, 676 N.Y.S.2d 715, 718 (N.Y. App. Div. 1998) (stating that where the provisions of an insurance contrac t are clear and unamb iguous, they must be enforced as written. (quoting Hartford Ins. Co. of M idwest v. H alt, 646 N.Y.S.2d 589, 596 (N.Y. App. Div. 1996))). Cf. Powerine Oil Co., Inc., 118 P.3d 589, 598 (C al. 2005); Bank of the W est, 833 P.2 d 545, 5 52 (Cal. 1992) (stating that if contractual language is clear and explicit, it governs. ); Physicians Re ciprocal Insurers , 757 N.Y.S.2d 330, 331 (N.Y. App. Div. 2003) (stating that [c]lear and unambiguous provisions in an insurance policy should be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement.... ); Mongelli v. Chicago Ins. Co., 2002 W L 3209 6578, a t *3 (E.D.N .Y. 200 2) (granting p rofessional liab ility insurer s motion for su mmary jud gment); North River Ins. Co. v. Town of Grand Island, 1995 WL 250391, at *4 (W.D.N.Y. 1995) (granting dec laratory judg ment in favor of Public O fficials and Em ployees Lia bility insurer). Accord E.I. duPon t de Nem ours & C o., 879 A .2d 929 , 938 (D el. Super. C t. 2004), citing Rhone-Poulenc, 616 A.2d 1192, 1196 (Del.1992). 110 See Harris v. Gulf Ins. Co., 297 F. Supp. 2d 1220, 122 5 (N.D. Cal. 2003) (interpreting insured versus insured ex clusion in D& O liability polic y); Fisher v. Geico Gen. Ins. Co., 378 F. Supp. 2d 444, 447 (S.D.N.Y. 2005) (interpreting au to insurance policy in pers onal injury ac tion); Zunenshine, 1998 W L 4834 75, at *4 (S.D .N.Y.) (stating that the insur er bears the b urden of p roving that the p olicy s exclusion s clearly and un mistakably ap ply to the insured s cla ims. (citation o mitted)); MacKinnon v. Truck Ins. Exch., 73 P.3d 1205, 1213 (Cal. 2003) (interpreting p ollution exclu sion in a CG L policy); Consol. Edison Co. of New York, Inc. v. Allstate Ins. Co., 774 N.E.2d 687, 690-92 (N.Y. 2002) (interpreting general liability policies in the context of environmental pollution issues); Villa Enterprises Mgmt. Ltd. v. Fed. Ins. Co., 821 A.2d 1174, 1188 (N.J. Super. Ct. Law Div. 2002) (explaining, in an action against general liability insurer arising from underlying unfair competition and advertising injury litigation, that [o ]nce cove rage has be en established , the burden shifts to the insurer to show that the cla im falls within the exclusionary provisions of the policy. (citing Sears Roebuck & Co., 774 A.2d 526, 532 (N .J. Super. Ct. App. D iv. 2001) )); Rosario , 799 A.2d 32, 37 (N.J. Super. Ct. App. Div. 2002) (explaining that in a dispute over the interpretation of an insurance contract, it is the insured s burden to bring the claim within the basic terms of the policy. On the other hand, where the insurance carrier claims the matter in dispute falls within exclusionary provisions of the policy, it bears the burden of establishing that claim. (quoting Reliance Ins. Co. v. Armstrong World Indus., Inc., 678 A.2d 1152 (N.J. Super. Ct. App. Div.1996) and Hartford Acc. & Indem. Co. v. Aetna Life & Cas. Ins. Co., 483 A.2 d 402 (N .J. 1984 ))). See also Seaboard Sur. Co. v. Gillette Co., 476 N.E.2d 272, 275 (N.Y. 1984) (explaining, in the context of a libel, slander, and copyright liability policy, that before an insurance company is permitted to avoid policy coverage, it must satisfy the burden ... of establishing that the exclusions or exemptions apply.... ); Lapierre, Litchfield & Partners v. Cont l Cas. Co., 297 N.Y.S.2d 976, 979 (N.Y. Sup. Ct. 1969) (applying these rules to interpret a professional liability policy: plaintiff has the burden of proof to establish that the claim comes within the provisions of the agreement.... The clause at issue is not an exclusion clause on which the insurer has the b urden of p roof. (citation s omitted)). Cf. Health-Chem Corp. v. Nat l Union Fire Ins. Co., 559 27 determine an insurer s coverage obligations by comparing the allegations made in a complaint with the terms of the policy. 111 Coverage language is interpreted broadly to protect the objectively reasonable expectations of the insured.112 Conversely, exclusionary clauses are accorded a strict N.Y.S.2 d 435, 4 38 (N.Y . Sup. Ct. 19 90) (exam ining the issue of a llocation of ex penses und er a D& O liability policy); N. Am. Philips Corp., 1995 W L 6284 42, at *3-4 (D el. Super.) (a pplying N ew York law). Accord E.I. du Pont de Nemours & Co., 711 A.2d 45, 53 (Del. Super. Ct.1995). 111 Steadfast Ins. Co. v. Stroock & Stroock & Lavan LLP, 277 F. Supp. 2d 245, 251 (S.D.N.Y. 2003) (interpreting exclusions under claims-made professional liability policy to determine duty to defend or indemnify); Holman v. Transamerica Ins. Co., 616 N .E.2d 49 9, 500 (N .Y. 199 3); Tartaglia v. Home Ins. Co., 658 N.Y.S.2d 388, 390 (N.Y. App. D iv. 1997) (affirming summary judgment after finding professional liability insurer owed no obligation to defend or indemnify); Voorhees v. Preferred Mut. Ins. Co., 607 A.2d 1255, 1259 (N.J. 1992) (consider ing whether insu rer owed duty to defen d under ho meowne r s policy); Fed. Ins. Co. v. Campbell Soup Co., 885 A.2d 465, 468 (N.J. Super. Ct. App. Div. 2005) (considering whether liability insurer owed duty to defend against litigation arising from securities transaction); Hebela , 851 A.2d 75, 79 (N.J. Super. Ct. App. Div. 2004 ); Rosario , 799 A.2 d 32, 40 (N.J. Sup er. Ct. App . Div. 2002) ; Powe ll, 760 A.2d 1141 ,1144 (N.J. Super. Ct. App. Div. 2000) ; Hayward v. Centennial Ins. Co., 430 F.3d 98 9, 991 (9th Cir. 20 05) (explaining, in the context of suit against CGL insurer, that in California, an insurer has a duty to defend its insured when, comparing the allegations in the third party complaint with the terms of the po licy as well as considering extrinsic facts, there is any potential for liability under the p olicy. (citation om itted)); Scottsdale Ins. Co. v. MV Transp., 115 P.3d 460, 466 (C al. 2005); Montrose Chem. Corp. v. Admiral Ins. Co., 861 P.2d 1153, 1157 (C al. 1993 ). Cf. Belt Painting C orp. v. TIG Ins. Co., 795 N .E.2d 15 , 17 (N.Y . 2003) (s tating that as the co urt has repea tedly held, an ins urer has a du ty to defend if the allegations state a cause of action that gives rise to the reasonable possibility of recovery under the policy. ); Hampton Med. Group, P.A. v. Princeton Ins. Co., 840 A.2d 915, 920 (N.J. Super. Ct. App. Div. 2004) (explaining that when the allegations in a complaint corre spond with the language o f the policy, the duty to defend arises, irrespective o f the claim's actual m erit. ). Accord Brosnahan Builders, Inc. v. Harleysville Mut. Ins. Co., 137 F. Supp. 2d 517, 52 5-26 (D . Del. 200 1); Harleysv ille Mut. Ins. C o., Inc. v. Su ssex Cou nty, 831 F. Supp. 1111, 1130 (D. Del. 1993). 112 Harris , 297 F. S upp. 2d 1220, 1 224-25 (N.D. C al. 2003 ); MacKinnon, 73 P.3d 1205, 1213 (Cal. 2003); AIU In s. Co. v. Su per. Ct., 799 P.2 d 1253 , 1264-6 5 (Cal. 19 90). See Hampton Med. Group, P.A., 840 A.2d 915, 920 (N .J. Super. C t. App. D iv. 2004) (stating that the [p] rinciples of insurance contract interpretation mandate [a] broad re ading of coverage provisions, [a] narrow reading of exclusionary provisions, [the] resolution of ambiguities in the insured s favor, and [a] construction consistent with the insured s reasonable expectations. (quoting Search EDP, Inc. v. Am. Home Assur. Co., 632 A.2d 286, 289 (N .J. Super. Ct. App. Div. 1993))). Cf. Jeffer v. Nat l Union Fire Ins. Co., 703 A.2 d 316, 3 19 (N.J . Super. Ct. A pp. Div. 1 997) (stating that exclusiona ry clauses in liability insurance policies must be strictly construed in favor of the insured, with any doubt as to the existence of coverage resolved in a manner tha t affords cov erage to the in sured. ); Sinopoli v. North River Ins. Co., 581 A.2d 1368, 1370 (N.J. Super. Ct. App. Div. 1990) (stating that the language of liability insurance policies should be construed liberally in favor of the insured and strictly against the insurer, and in such manner as to provide full coverage of the indicated risk rather than to n arrow pro tection. (citatio ns omitted)) ; Lefrak Org., Inc., 942 F. Supp. 949, 953 (S.D.N.Y. 1996) (explaining that the purpose of an insurance policy is to provide protection to the insured. To give effect to that purpose, limitations on coverage must be construed narrowly. ); Snyder v. Nat l Union Fire Ins. Co., 688 F. Supp. 932, 938 (S.D.N.Y. 1988) (observing that a corollary principle [to contra proferentem] is that exclusions ar e to be narr owly construed so that the scope of coverage remains as broad as possible. ); Fed. Ins. Co. v. Kozlowski, 792 N.Y.S.2d 397, 402 (N.Y. App. Div. 2005) (explaining, in the context of interpreting a D&O liability policy, an insurer s duty to defend and to pay defense costs under liability insurance policies must be 28 and narrow construction. 113 Even so, courts give effect to such exclusionary language where it is found to be specific, clear, plain, conspicuous 114 and not contrary to public policy. 115 This is because insurance contracts are contracts of adhesion,116 so policy language found to construed broadly in fav or of the po licyholder. (c itation omitted )); 30 West 15th Street Owners C orp. v. Travelers Ins. Co., 563 N .Y.S.2d 784, 78 6 (N.Y . App. D iv. 1990) (explaining tha t it is well settled that an insu rer s duty to defend is broader than its duty to indemnify and that a contract of insurance will be strictly construed in favor of the insured. ); Fed. Ins. Co. v. Tyco Intern. Ltd., 2004 W L 5838 29, at *6 (N .Y. Sup. C t.) (observing that the duty to defend or pay de fense costs is construed liberally and any doubts about coverage are resolved in the insured s favor. ). 113 Napoli, Kaiser & Bern, LLP, 295 F. S upp. 2d 335, 34 3 (S.D.N .Y. 200 3); Holman v. Transame rica Ins. Co., 616 N .E.2d 49 9, 500 (N .Y. 199 3); Seaboard Sur. Co. v. Gillette Co., 476 N.E.2d 272, 275 (N.Y. 1984); Oot, 676 N .Y.S.2d 715, 72 0 (N.Y . App. D iv. 1998) ; Nav-Its, Inc., 869 A.2 d 929, 9 34 (N.J . 2005); Princeton Ins. Co. v. Chunmuang, 698 A.2 d 9, 16-1 7 (N.J. 19 97); Hampton Med. Group, P.A., 840 A.2d 915, 920 (N.J. Super. Ct. App. Div. 200 4). Accord Church Mut. Ins. Co., 347 F.S upp.2d 880, 88 4 (S.D. C al. 2004 ); Harris , 297 F. Supp. 2d 1220, 1224 (N .D. Cal. 20 03); MacKinnon, 73 P.3d 1205, 1213 (Cal. 2003); N. Am. Phillips Corp., 1995 W L 6260 36, at *2 (Del. Sup er.). 114 Napo li, 295 F. S upp. 2d 335, 34 3 (S.D.N .Y. 200 3); Holman, 616 N.E.2d 499, 500 (N.Y. 1993); Seaboard Sur. Co., 476 N .E.2d 27 2, 275 (N .Y. 198 4); Oot, 676 N.Y.S.2d 715, 720 (N.Y. App. Div. 1998); Nav-Its , Inc., 869 A.2d 929, 934 (N.J. 2005) (explaining an exclusion that is specific, plain, clear, prominent, and not contrary to p ublic policy, ... will be enforced as written. (citatio n omitted)); Princeton Ins. Co., 698 A.2d 9, 17 (N.J. 1997) (stating that exclusio ns are presu mptively valid and will be giv en effect if specific, p lain, clear, pro minent, and not contrary to public policy. (citations omitted)); Hampton Med. Group, P.A., 840 A.2d 915, 920 (N .J. Super. Ct. App. Div. 2004); Church Mut. Ins. Co., 347 F. S upp.2d 880, 88 4 (S.D. C al. 2004 ); Harris , 297 F. Supp. 2d 1220, 1224-25 (N.D. Cal. 2003); MacKinnon, 73 P.3d 1205, 1 213 (C al. 2003 ); ML Direct, Inc., 93 Cal. Rptr 2d 846, 85 0 (Cal. Ct. A pp. 200 0). Cf. Zunenshine, 1998 WL 4 83475, at *4 (S.D.N.Y.) (stating that the insurer bears the burden of proving that the policy s exclusions clearly and unmistakably apply to the insured s claim. (citation omitted)). 115 Burns v. Int l Ins. Co., 709 F. S upp. 18 7, 190 (N .D. Cal. 19 89); Nav-Its , Inc., 869 A.2d 929, 934 (N.J. 2005) ; Princeton Ins. Co., 698 A.2 d 9, 17 (N .J. 1997 ); compare Am. Home Assur. Co. v. Levy, 686 N.Y.S.2d 639, 646-48 (N.Y. Su p. Ct. 199 9) (finding a se xual miscon duct prov ision limiting cov erage und er a professio nal liability insurance policy did not violate public policy). 116 Nav-Its , Inc., 869 A.2d 929, 933 (N.J. 2005) (explaining that because of the complex terminology used ... and because the policy is in most cases p repared by the insurance company expe rts, we recognize that [it] is a contract[ ] of adhesion between parties who are not equally situated. ); Shaw v . City of Jersey City, 811 A.2d 404, 410 (N.J. 2002) ( stating that [i]nsurance contracts typically are contracts of adhesion, prepared unilaterally by the insurer. ); Sparks v. St. Paul Ins. Co., 495 A.2d 406, 412 (N.J. 1985) (stating insurance contracts are contracts of adhesion , prepared unilaterally by the insu rer, and hav e always bee n subjected to careful jud icial scrutiny to avo id injury to the pu blic. ); Fireman s Funds Ins. Co. v. Fibreboard Corp., 227 Cal. Rptr. 203, 206 (Cal. Ct. App. 1986) (explaining, in the context of a declaratory jud gment action arising from asbesto s litigation, that [i]n the typical situation, the policy represents a contract of adhesion entered into between two parties of unequal bargaining strength, expr essed in the lan guage of a sta ndardize d contrac t, written by the mo re power ful bargainer to meet its own needs, and offered to the weaker party on a take it or leave it basis.... (quoting Gray v. Zurich Ins. Co., 419 P.2d 16 8 (Cal. 19 66))). Cf. Ogden Corp. v. Travelers Indem. Co., 681 F. Supp. 169, 174 (S.D.N.Y. 1988) (construing a ny ambiguities in CGL p olicy in corp orate insured s favor [a]ltho ugh [insured ] did in fact neg otiate 29 be ambiguous is construed against the drafter,117 in favor of coverage 118 and the insured s reasonable with [insurer], it cannot be said that [insured] completely drafted the provisions in question so as to cause the Court to apply a lim ited excep tion to the gene ral rule by con struing ambig uities in favor of the insurer. ); Eagle Star Ins. Co., Ltd. v. Int l Proteins Corp., 360 N.Y.S.2d 648, 650 (N.Y. App. Div. 1974) (explaining in the context of maritime insurance breach of contract case, that insurance contracts have been referred to as Contracts of Adhesio n in view of the d isadvantage ous barga ining position w hich genera lly exists between the parties .... ). Accord New Castle County v. Nat l Union Fire Ins. Co., 243 F.3 d 744, 7 55-56 (3 d Cir. 200 1); Alstrin, 179 F. Supp. 2d 376, 389 (D. D el. 2002) (explaining the reason behind the contra-insurer rule). 117 Werner Indus. v. First State Ins. Co., 548 A.2 d 188, 1 90-92 (N .J. 1988 ) (agreeing w ith the trial court s finding that the umbrella liability policy terms were plain and not inconsistent with public expectations [and] comme rcially accep ted standar ds rende ring the reaso nable exp ectation do ctrine inapp licable); Sparks, 495 A.2d 406, 412 (N.J. 1985) (stating that the recognition that insurance policies are not readily understood ... impelled courts to resolve ambiguities ... against ... insurance companies. ); Lavanant v. Gen. Acc. Ins. Co. of Am., 595 N.E.2d 819, 823 (N.Y. 1992) (explaining, in the context of a CGL policy declaratory judgment action, arising from personal injury suit against insured landlord, that where there is ambiguity as to the existence of coverage, doubt must be reso lved in favor o f the insured an d against the insu rer. (citations o mitted)); Breed v. Ins. Co. of N. Am., 385 N.E.2d 1280, 1 282 (N .Y. 197 8) (recog nizing, in a cov erage actio n involving a h omeow ners policy, the g eneral rule that ambiguities in an insurance policy are to be construed against the insurer, particularly when found in an exclusionary clause. (citation omitted)). Cf. Powerine Oil Co., Inc., 118 P.3d 589, 598 (C al. 2005) (explaining ambiguity no t eliminated b y the language and conte xt of the policy, ... are generally con strued again st the party who caused the uncertainty to exist ... i.e., the insurer ... ); Montrose Chem. Corp., 913 P.2d 878, 888 (Cal. 1995) (explaining tha t ambiguity is reso lved by interp reting the amb iguous pro visions in the sens e the ... insurer ... believed the promisee understoo d them at the tim e of formatio n. If application of this rule does not eliminate the ambiguity, ambiguous language is construed against the party who caused the uncertainty to exist. (citations omitted)). Accord New Castle County v. Nat l Union Fire Ins. Co., 174 F.3 d 338, 3 43 (3d C ir. 1999); Swfte Int l, Ltd. v. Selective Ins. Co. of Am., 1994 W L 8278 12, at *5 (D . Del.); contra AIU Ins. Co., 799 P.2 d 1253 , 1265 (C al. 1990) (stating that where the policyholder does not suffer from lack of legal sophistication or a relative lack of bargaining power, and where it is clear that an insurance policy was actually negotiated and jointly drafted, we need not go so far in protecting the insured from ambiguous or highly technical drafting. ); Fireman s Funds Ins. Co. v. Fibreboard Corp., 227 Cal. Rptr. 203, 206-07 (Cal. Ct. App. 1986) (holding the general rule of strict construction inapplicable where two large corporate entities, each represe nted by specialized insurance brokers or risk manage rs, negotiated the terms of the in surance co ntracts. ). See also Diam ond Sha mrock Ch ems. Co. v. Aetna Cas. & Sur. Co., 609 A.2d 440, 460-61 (N.J. Super. Ct. App. Div. 1992) (discussing application of the sophisticated insured exception in the context o f CGL p olicy pollution exclusion); but see Alstrin, 179 F. Supp. 2d 376, 388, 389-90 (D. Del. 2002). 118 Church Mut. Ins. Co., 347 F. S upp.2d 880, 88 4 (S.D. C al. 2004 ) (explaining th at if the policy is ambiguous because it is reasonably susceptible to more than one interpretation, the ambiguity is construed in favor of coverage. (quoting Smith Kandal Real Estate v. Cont l Cas. Co., 79 Cal. Rptr. 2d 52 (Cal. Ct. App. 1998))); AIU Ins. Co., 799 P.2d 1253, 126 4 (Cal. 1990) (stating that in the insurance context, [the Courts] generally resolve ambiguities in fa vor of cov erage. ). Cf. Hugo Boss Fashions, Inc. v. Fed. Ins. Co., 252 F.3d 608, 615 (2d C ir. 2001) (applying New York s well-established contra proferentem rule, pursuant to which unresolvable ambiguities in insurance contracts are construed in favor of the insured. ); Lavanant, 584 N.Y.S.2d 744, 747 (N.Y. 1992) (explaining that where there is ambiguity as to the existence of coverage, doubt must be resolved in favor of the insured and against the insurer. ); Nav-Its, Inc., 869 A.2 d 929, 9 33 (N.J . 2005) (s tating that if the polic y is ambiguous, [it] will be construed in favor of the insured. ); President, 853 A.2d 247, 254 (N .J. 2004) (explaining that ambigu ous languag e in an insuranc e policy is often c onstrued in fa vor of the insur ed. ). Accord New C astle Coun ty, 174 F.3 d 338, 3 43 (3d C ir. 1999); Swfte Int'l, Ltd., 1994 W L 8278 12, at *5 (D . Del.). 30 expectations.119 However, these courts do not employ the rule of contra proferentem unless ambiguity exists.120 The Court recognizes that, due to insurance policies not being readily understood 121 and 119 Nav-Its, Inc., 869 A.2d 929, 934 (N.J. 2005) (recognizing the importance of construing contracts of insurance to reflect the reasonable expectations of the insured in the face of ambiguous language... ); President, 853 A.2d 247, 254 (N.J. 200 4) ( when an ambiguity exists within an insurance contract, courts should interpret the contract to comport with the reasonable expectations of the insured. (quoting Zacarias v. Allstate Ins. Co., 775 A.2d 1262, 1264 (N.J. 2001))); Powerine Oil Co., Inc., 118 P.3d 589, 598 (C al. 2005); Bank of the W est, 833 P.2d 545, 552 (Cal. 1992) ( In summary, a court ... faced with an argument for coverage based on ... ambiguous policy language m ust first attempt to d etermine wh ether cove rage is consiste nt with the insured s objectively re asonable expectations. In so doing, the court must interpret the language in context, with regard to its intended function in the policy. ); Cunningham, 120 Cal. Rptr. 2d 162, 168 (Cal. Ct. App. 2002) ( [I]f a provision is ambiguous, the ambiguo us terms are re solved in the in sureds favo r, consistent with the insureds reaso nable exp ectations. (quoting Safeco Ins. Co. v. Robert S., 28 P.3d 889 (C al. 2001 ))). See AIU Ins. Co., 799 P.2d 1253, 1264 (Cal. 1990) (discussing the California approach to resolving ambiguity and explaining that the Court generally interpret[s] the coverage clauses of insurance policies broadly, protecting the objectively reasonable expectations of the insured. ); Belt Painting Corp., 795 N.E.2d 15, 17 (N .Y. 2003) ( We read an insurance policy in light of common speech and the reasonable expectations of a businessperson.... It follows that policy exclusions are given a strict and narrow construction, with any ambiguity resolved against the insurer. (citations omitted)). Cf. U.S. Underwriters Ins. Co. v. Affordab le Housin g Fou nd., Inc., 256 F. Supp. 2d 176, 18 0-81 (S.D.N.Y. 2003) (construing a CGL p olicy and explaining tha t if a term can be reasonab ly interpreted in two ways, a co urt must constr ue the langua ge in accordance with the reasonable expectations of the average insured individual, reading the policy and employing common language skills. ); Oot, 676 N.Y.S.2d 715, 718 (N.Y. App. Div. 1998) ( [W]here the meaning of a policy of insurance is in doubt or is subject to m ore than on e reasona ble interpre tation, all ambig uity must be reso lved in favor of the policyholder and against the company which issued the policy ¦. This rule is enforced even more strictly when the lang uage at issue p urports to lim it the compa ny s liability. (citations o mitted)). Accord Swfte Int'l, Ltd., 1994 WL 8 27812, at *5 (D. Del.). 120 Hugo Boss Fashions, Inc., 252 F.3d 60 8, 616 (2d C ir. 2001) (applying N ew York law in cov erage case against liability insurer arising from a trademark infringement action); Endicott John son Corp. v. Libe rty Mut. Ins. Co., 928 F. Supp. 176, 182 (N.D .N.Y. 1996) (explaining, in context of a CGL policy declaratory judgment action, that [o]nly after all aids to construction have been employed but have failed to resolve the ambiguities should the Court ap ply the maxim that ambiguities are to be co nstrued aga inst the insurer. (c itation omitted )); U.S. v. Gen. Reinsuranc e Corp ., 949 F.2d 569, 573-74 (N.Y. 1991) (explaining, in a suit between excess liability insurers, that New Yo rk law holds contra proferentem applies only as a matter of last resort after all aids to construction have been em ployed b ut have failed to resolve the am biguities in the written instrument. (cita tions omitted )); Breed, 46 N.Y.2d 351, 355 (N.Y. 1978) (holding that [o]bviously, before the rules governing the construction of ambiguous contracts are triggered, the c ourt must first find a mbiguity in the p olicy. ); Am. White C ross Lab., Inc. v. Con t l Ins. Co., 495 A.2 d 152, 1 57 (N.J . Super. Ct. A pp. Div. 1 985) (o bserving that th e trial judge s use of contra proferentem to interpret a products liability policy overlooked the obvious fact that only genuine ambiguities engage the socalled doctrine of ambiguity. (citing Weedo v. Stone-E-Brick, Inc., 405 A.2d 788, 794-95 (N.J. 197 9))); Montrose Chem. Corp., 913 P.2d 878, 888 (C al. 1995) (stating that ambiguity is resolved by interpreting the ambiguous provisions in the sense the ... insur er ... believed the promise e understo od them a t the time of form ation.... Only if this rule does n ot resolve the ambiguity do we then reso lve it against the insur er. ); Bank of the W est, 833 P.2d 545, 552 (Cal. 1992). Accord New Ca stle Coun ty, 243 F.3 d 744, 7 52 n.6 (3 d Cir. 2001) . 121 Sparks, 495 A.2d 406, 412 (N.J. 1985). 31 inequality in bargaining positions among contracting parties,122 case law exists that permits judicial application of the reasonable expectation doctrine to fulfill an insured s expectations even where those expectations contravene the unambiguous, plain meaning of exclusionary clauses.123 For purposes of these Motions, however, the Court defers consideration of whether application of this exception to the rule of strict construction of policy terms is appropriate in the case at bar, which involve commercial policies, some of which contain amendatory endorsements. 124 At this point, 122 Gerhardt v. Co nt Ins. Cos., 225 A.2d 328, 332 (N .J. 1966). 123 See AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 47; A T&T An. Br. in O pp n to Nat l Unio n s Mot. for Part. Sum m. J., D.I. 12 6/E-File 17 5, at 34; Re ply Br. by N at l Union, D .I. 133/E-F ile 200, at 17-18; Jo int Reply B r. in Supp. M ot. for Part. S umm. J. by C ont l Cas. Co ., Zurich Am . Ins. Co., Gu lf Ins. Co. & Twin City Fire Ins. Co. for Decl. There is No Coverage for Williamson Fiduciary & Leykin Actions U nder Run -Off & 200 1 Policies a t 5 n.4, AT&T Corp . v. Clarendon A m. Ins., E-File196 (Sep. 2, 2005). See Voorhees, 607 A.2d 1255, 1260 (N.J. 1992) (applying the reasonable expectations doctrine to a homeowner s policy and explaining that if an insured s reasonable expectations contravene the plain meaning of a policy, even its plain meaning can be overcom e. (citation o mitted)); Sparks, 495 A.2d 406, 412 (N.J. 1985) (stating that recognition that insurance policies are not readily understood ... impelled courts to resolve ambiguities ... against the insurance compa nies....[and] ha s also led co urts to enforce unambigu ous insuranc e contracts in a ccordan ce with the reas onable expectations of the insured. ); Gerhardt, 225 A.2d 328 (N.J. 1966) (construing homeowner s policy to provide workers compensation coverage over express language of an exclusion); Kievit v. Loyal Protective Life Ins. Co., 170 A.2d 22 (N.J. 1961) (declining to limit individual insured s coverage in spite of pre-existing condition under disability insuranc e policy). Accord McG rail, 55 N.E.2d 483, 486 (N.Y. 1944) (examining a total disability policy and expla ining that resort to a literal construction may not be had where the result would be to thwart the obvious and clearly ex pressed p urpose wh ich the parties inte nded to a ccomp lish or where su ch a constru ction would lead to an obvious absurdity or place one party at the mercy of the other. (citations omitted)). 124 Joint Reply Br. in Supp. Mot. for Part. Summ. J. by Cont l Cas. Co., Zurich Am. Ins. Co., Gulf Ins. Co. and Tw in City Fire Ins. C o., E-File19 6, at 5 n.4 . See Zacarias, 775 A.2d 1262, 126 8 (N.J. 2001) (considering the reasonable expectations doctrine, we discern two rules .... First, in enforcing an insurance policy, courts will depart from the literal text and interpret it in accordance with the insured s understanding, even when that understanding contradicts the insurer s intent, if the text appears overly technical or contains hidden pitfalls, cannot be understood without emp loying subtle o r legalistic distinction s, is obscured by fine print, or re quires strenuo us study to comprehend. Second, the plain terms of the contract will be enforced if the entangled and professional interpretation of an insurance underwriter is [not] pitted against that of an average purchaser of insurance, or the provision is not so confusing that the average policyholder cannot make out the boundaries of coverage. (citations omitted)); Bromfeld v. H arleysville Ins. Cos., 688 A.2 d 1114 , 1121 (N .J. Super. C t. App. D iv. 1997) (explaining the reasonab le expectations doctrine applies to insurance policies with private individuals. ); Nunn v. Franklin Mut. Ins. Co., 644 A.2d 1111, 1114 -15 (N.J. Super. Ct. App. Div. 1994) (explaining that the type of [non-commercial] policy being scrutinized as well as the type of non-commercial individual insured distinguishes New Jersey cases where judicial interpretation found unambiguous policies inconsistent with public expectations [and] commercially accepted standards ). 32 any determination of whether the exception applies is premature because the issue is not fully briefed and the choice of law question remains in dispute.125 New York, New Jersey and California courts use similar standards to ascertain the existence of ambiguity,126 and all find ambiguity where language in an insurance policy is reasonably susceptible to more than one interpretation. 127 The mere suggestion that there are two conflicting 125 Werner Indu s., 548 A.2d 188, 190-93 (N.J. 1988) (remanding to determine whether the policy terms were understood and bargained for, after agreeing with the trial court that those terms were plain and not inconsistent with p ublic expe ctations [and ] comme rcially accep ted standar ds. ); Sparks, 495 A.2 d 406, 4 16 n.6 (N.J. 1985) (noting that on remand the trial court shou ld not be p recluded from consid ering eviden ce tending to prove that the terms of this policy were specifically understood and bargained for [by previous attorney insured] ... ). 126 In Weedo v. Stone-E-Brick, Inc., 405 A.2d 788, 795 (N.J. 1979), the Supreme Court of New Jersey found that genuine ambiguity arises where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage. See Richards v. Princeton Ins. Co., 178 F. Supp. 2d 386, 392 (S.D.N.Y. 2001); Fed. Ins. Co. v. Campbell Soup Co., 885 A.2 d 465, 4 68 (N.J . Super. Ct. A pp. Div. 2 005); Rosario , 799 A.2d 32, 38 (N .J. Super. Ct. App. Div. 2002); U.S. Mineral Products Co. v. Am. Ins. Co., 792 A.2d 500, 509 (N.J. Sup er. Ct. App . Div. 200 2). New Y ork courts e mploy seve ral forms of the commo n speech a nd reason able insured test. See Nat l Union Fire Ins. Co. v. Farmington Casualty Co., 765 N.Y.S.2d 763, 766 (N.Y. Sup. Ct. 2003) (The test to determine whether an insurance contract is ambiguous focuses on the reasonable expectations of the average insu red upo n reading the policy ... and em ploying com mon spe ech. (quoting Mostow v. S tate Farm Ins. C as. Co., 668 N.E.2d 392, 423 -24 (N.Y. 1996))). See also Assoc. Mut. Ins. Coop. v. Bader, 805 N.Y.S.2d 275, 277 (N.Y. Sup. Ct. 20 05); Belt Painting Corp.,795 N .E.2d 15 , 17 (N.Y . 2003); N. Am. Phillips Corp., 1995 W L 6284 44, at *7 (The tests to be applied in construing an insurance policy are common speech ... and the reasonable expectation and purpose of the ordinary businessman. (citing Ace Wire & Cable Co. v. Aetna Cas. & Sur. Co., 457 N.E. 2d 761, 76 4 (N.Y . 1983)) ). Cf. Zunenshine, 1998 WL 483475, at *3 (S.D.N.Y.) ( Contract terms are ambiguous if they suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally und erstood in th e particular tra de or bus iness. (citation o mitted)). Finally, as in Delawar e, California courts look for policy lang uage that is reas onably susc eptible to m ore than on e interpretatio n. Church M ut. Ins. Co., 347 F. S upp.2d 880, 88 4 (S.D. C al. 2004 ), citing Smith Kandal Real Estate v. Cont l Cas. Co., 79 Cal. Rptr. 2d 52 (Cal. C t. App. 19 98); Powerine Oil Co., Inc., 118 P.3d 589, 598 (Cal. 2005); MacKinnon, 73 P.3d 1205, 1213 (Cal. 2003); Cunningham, 120 Cal. Rptr. 2d 162,168 (Cal. Ct. App. 2002). Accord New C astle Cou nty, 243 F.3d 744, 750 (3d Cir. 2001); O Brien v. Progressive N. Ins. Co., 785 A.2 d 281, 2 88 (De l. 2001), citing Rhone-Poulenc, 616 A.2d 1192 , 1196 (Del. 1992). 127 Am. Cas. Co. v. Resolution Trust Corp., 839 F. S upp. 28 2, 290 (D .N.J. 199 3), citing Allen v. M etro. Life Ins. Co., 208 A.2 d 638 (N .J. 1965 ); Byrd v. Blumenreich, 722 A.2d 598, 600 (N.J. Super. Ct. App. Div. 1999); citing Hunt v. Hosp. Serv. Plan of N.J., 162 A.2d 561, 563 (N.J. 1960) (holding [w]herever possible the phraseolo gy must be libe rally construed in favor of the insu red; if doub tful, uncertain, or a mbiguou s, or reason ably susceptible of two interpretations, the construction conferring coverage is to be adopted. ); U.S. Unde rwriters Ins. Co., 256 F. Supp.2d 176, 180 -81 (S.D.N.Y. 2003), citing Haber v. St. Paul Guardian Ins. Co., 137 F.3d 691, 695 (2d Cir. 1998); Zunenshine, 1998 WL 4 83475, at *3 (S.D.N.Y.); Home Ins. Co. of Ill. v. Spectrum Info. Tech., Inc., 930 F. S upp. 82 5, 844 (E .D.N.Y . 1996); K. Bell & Assocs, Inc., 97 F.3d 632, 637 (2d Cir. 1996); Harrington v. Am. Mut. Ins. Co., 645 N.Y.S.2d 221, 224 (N.Y. App. Div. 1996) (finding New York law closely parallels New Jersey 33 interpretations for the same policy language does not create ambiguity. 128 The courts in all three states are in agreement that a court is not required to find ambiguity where an interpretation advocated by a litigant would strain the language of the contract beyond its reasonable and ordinary meaning. 129 Again, both interpretations must reflect a reasonable reading of the contractual law in construing ambiguity in the context of homeowner s coverage); N. Am. Phillips Corp., 1995 WL 62844 4, at *7 (applying New Y ork law); Powerine Oil Co., Inc., 118 P.3 d 589, 5 98 (Cal. 2 005); Church Mut. Ins. Co., 347 F. Supp.2 d 880, 8 84 (S.D . Cal. 2004 ), citing Smith K andal R eal Estate , 79 Cal. Rptr. 2d 52 (Cal. Ct. App.1998); MacKinnon, 73 P.3d 1205, 1213 (Cal. 2003). See President, 853 A.2d 247, 254 (N.J. 2004). Cf. Pow ell, 760 A.2d 1141, 1147 (N.J. Super. Ct. App. D iv. 2000) ( An insurance policy is not ambiguous merely because two conflicting interpretations of it are suggested by the litigants rather both interpretations must reflect a reasonable reading of the contractual language. ); Liberty Surplus Ins. Corp. v. Segal Co., 2004 WL 2102090, at *1 (S.D.N.Y. 2004) ( An unambiguous contract provision is one with a definite and precise meaning, unattended by danger of misconception in the purpose of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion. (citation omitted)); Hugo Boss Fashions, Inc., 252 F.3 d 608, 6 17 (2d C ir. 2001); Cunningham, 120 Ca l. Rptr. 2d 1 62,168 (Cal. Ct. Ap p. 2002 ) ( If the policy p rovision is una mbiguou s, i.e., has only one reasonab le construction, it must be interpreted according to this plain meaning. (citing Ray v. Valley Forge Ins. Co., 92 Cal. Rptr. 2d 4 73, 475 -76 (Cal. C t. App. 19 99))). Accord O Brien v. Progressive N. Ins. Co., 785 A.2 d 281, 2 88 (De l. 2001) , citing Rhone-Poulenc, 616 A.2d 1192, 119 6 (Del. 1992). 128 Fed. Ins. Co. v. Campbell Soup Co., 885 A.2 d 465, 4 68 (N.J . Super. Ct. A pp. Div. 2 005); Rosario , 799 A.2d 32, 38 (N.J. Super. Ct. App. Div. 2002); Powell , 760 A.2 d 1141 , 1147 (N .J. Super. C t. App. D iv. 2000) , citing James v. Fed. Ins. Co., 73 A.2d 720, 72 1 (N.J. 19 50); Abner, Herrman & Brock, Inc., 308 F. Supp. 2d 331, 336 (S.D.N .Y. 200 4); Checkrite Ltd., Inc. v. Illinois Nat l Ins. Co., 95 F. Supp. 2d 180, 189 (S.D.N.Y. 2000) (interpreting e rrors and o missions liability po licy); Zunenshine, 1998 W L 4834 75, at *3 (S.D .N.Y.) ; Home Ins. Co. of Illinois v. Spectrum Info., 930 F. Supp. 825, 846 (E.D .N.Y. 1996) (interpreting claims made D&O policy); Mount Vernon Fire Ins. Co. v. Creative Housing Ltd., 668 N .E.2d 40 4, 406 (N .Y. 199 6) (interpre ting liability insurance p olicy assault and b attery exclusion ); Powerine Oil Co., Inc., 118 P.3d 589, 598 (Cal. 2005); FosterGardner, Inc. v. Nat l Union Fire Ins. Co., 959 P.2d 265, 272 (Cal. 1998) (interpreting comprehensive general liability policy); Lockheed Corp. v. Cont l Ins. Co., 35 Cal. R ptr. 3d 79 9, 805 (C al. Ct App . 2005). Accord Woodward v. Farm Family Cas. Ins. Co., 796 A.2 d 638, 6 42 (De l. 2002); Rhone-Poulenc Basic Chems. Co. v. Am. Motorist Ins. Co., 616 A.2d 1192, 1195 (Del. 1992). 129 Checkrite Ltd., Inc., 95 F. Sup p. 2d 18 0, 189 (S .D.N.Y . 2000); Zunenshine, 1998 W L 4834 75, at *3 (S.D.N .Y.). Cf. Long obardi, 582 A.2d 1257, 1260 (N.J. 1990)) ( [T]he words of an insurance policy should be given their ordinary meaning, and in the absence of an ambiguity, a court should not engage in a strained construction to support the imposition of liability. ); Zurich Am. Ins. Co. v. Pennsylvania Mfrs. Ass n Ins. Co., 2003 WL 2309 5605, at *6 (N.J. Super. Ct. App. Div. 2003) (interpreting comprehensive general liability policy); Rosario , 799 A.2d 32, 38 (N.J. Super. Ct. App. Div. 2002); Physicians Reciprocal Insurers v. Abraham, 757 N.Y.S.2d 330, 331 (N.Y. App. Div. 2003); Waller v. Truck Ins. Exchange, Inc., 900 P.2d 619, 627 (Cal. 1995) ( But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to b e ambiguo us in the abstrac t. Courts will not strain to create an ambiguity where none exists. (citations omitted)); ML Direct, Inc., 93 Cal. R ptr 2d 84 6, 850 (C al. Ct. App. 2000) ( We will not adopt a strained or absurd interpretation to create an ambiguity where none exists. The policy terms must be construed in the context of the whole po licy and the circ umstances o f the case and cannot be deemed ambiguo us in the abstrac t. ). Cf. Schiff v. Fed. Ins. Co., 779 F. Supp. 17, 21 (S.D.N.Y. 199 1) (holding in context of office building package policy that [w]here there is no ambiguity, this Court is unwilling to enlarge the liability of the insurer beyond the express terms of the 34 language before ambiguity will be found. Further, absent any ambiguity, the law in these states provides that a court should not write or rewrite a policy for an insured to make it better than the policy purchased.130 Thus, if the disputed language is found unambiguous, the court should give the policy terms their plain and ordinary meaning,131 and enforce the contract according to those terms.132 contract be tween insurer and insured . ). Accord New C astle Cou nty, 243 F.3d 744, 750 (3d Cir. 2001); O Brien v. Progressive N. Ins. Co., 785 A.2 d 281, 2 88 (De l. 2001); citing Rhone-Poulenc, 616 A.2d 1192, 119 6 (Del. 1992). 130 Morgan, Lewis & Bockius LLP v. Hanover Ins. Co., 929 F. S upp. 76 4, 774 (D .N.J. 199 6) (finding, in the context o f construing a liab ility insurance po licy, that the court c annot rewrite the contract fo r the parties, no r it is empowered to alter the terms of the same. ); President, 853 A.2 d 247, 2 54 (N.J . 2004); Voorhees v. Preferred Mut. Ins. Co., 607 A.2 d 1255 , 1260 (N .J. 1992 ); Hebela , 851 A.2d 75, 80 (N.J. Super. Ct. App. Div. 2004); Rosario , 799 A.2d 32, 38 (N.J. Super. Ct. App. Div. 2002 ); Powell , 760 A.2d 1141,1143, 1147 (N.J. Super. Ct. App. Div. 200 0); Schiff, 779 F.S upp. 17 , 21 (S.D .N.Y. 19 91); Breed, 385 N.E.2d 1280 , 1282 (N.Y. 1978) ( T his court may not make or vary the contract of insurance to accomplish its notions of abstract justice or moral obligation, since [e]quitable c onsideratio ns will not allow an extension o f the coverag e beyond its fair intent and me aning in ord er to do raw equity and to obviate objections which might have been foreseen and guarded against. ); Escobar, 804 N.Y.S.2d 360, 361-62 (N.Y .App. Div. 2005); Physicians Reciprocal Insu rers, 757 N.Y.S.2d 330, 331 (N.Y. App. Div. 200 3); Lancer Ins. Co. v. Utica Nat l Ins. Group, 721 N.Y.S.2d 782 (N.Y. App. Div. 2001); Johnson v. Home Indem. Co., 601 N .Y.S.2d 347, 34 8 (N.Y . App. D iv. 1993) , citing Gov t Employees Ins. Co., 366 N.E.2d 865, 866 (N.Y. 1977); Certain U nderwrite rs at Lloyd s of Lond on v. Su perior Co urt, 16 P.3d 94, 108 (Cal. 200 1) (stating, in context of inter preting com prehensive general liability po licy, that we do no t rewrite any pro vision of any co ntract, including the sta ndard p olicy underlying any individua l policy, for any p urpose. ) ; Blumberg v. Guarantee Ins. Co., 238 Ca l. Rptr. 36, 4 1 (Cal. Ct. A pp. 198 7) (explain ing in the conte xt of interpreting a profession al liability policy, that [c]ourts may not rewrite the insurance contract or force a conclusion to exact liability where none was contemplated. ). Cf. Bay Cities Paving & Grading, Inc., 855 P.2 d 1263 , 1271 (C al. 1993 ). Accord E.I. duPont de Nemours & Co.; 879 A.2d 929, 938 (D el. Super. Ct. 2004). 131 Nav-Its, Inc., 869 A.2 d 929, 9 33 (N.J . 2005); Longobardi, 582 A.2 d 1257 , 1260 (N .J. 1990 ); Rosario , 799 A.2 d 32, 38 (N.J. Sup er. Ct. App . Div. 2002); Lavanant, 595 N .E.2d 81 9, 822 (N .Y. 199 2); Escobar, 804 N.Y.S.2d 360, 361-62 (N.Y. App. Div. 2005); Physicians Re ciprocal Insurers , 757 N.Y.S.2d 330, 331 (N.Y. App. Div. 2003); Lapierre, Litchfield & Partne rs v. 302 N .Y.S.2d 370, 37 3 (N.Y . App. D iv. 1969) ; N. Am. Phillips Corp., 1995 W L 6284 44, at *8 (ap plying New York law ); Church Mut. Ins. Co., 347 F. Supp. 2d 880, 884 (S.D .Cal. 2004), citing AIU Ins. Co., 799 P.2 d 1253 , 1253 (C al.1990 ); Cunningham, 120 Ca l. Rptr. 2d 1 62, 168 (Cal. Ct. Ap p. 2002 ). Cf. Morgan, Lewis & Bockius LLP, 929 F. S upp. 76 4, 774 (D .N.J. 199 6) ( The parties will be b ound by the plain language of the contract. ); ML Direct, Inc., 93 Cal. R ptr 2d 84 6, 850 (C al. Ct. App. 2000) (explaining that the fundamental goal of contract interpretation is to give effect to the parties mutual intentions, which, if possible, should be inferred solely fro m the written term s of the policy. If tha t language is clea r and exp licit, it governs. ). Accord New Ca stle Coun ty, 970 F.2d 1267, 1270 (3d Cir. 1992). 132 Nav-Its, Inc., 869 A.2 d 929, 9 33-34 (N .J. 2005 ); Rosario , 799 A.2d 32, 38 (N.J. Super. Ct. App. Div. 2002) ; Richards v. Princeton Ins. Co., 178 F. Supp. 2d 386, 392 (S.D .N.Y. 2001) (applying New Jersey law); Church Mut. Ins. Co., 347 F. S upp.2d 880, 88 4 (S.D. C al. 2004 ), citing AIU Ins. Co., 799 P.2d 1253, 1253 (Cal.199 0); K. Bell & Assoc., Inc., 97 F.3d 632, 63 7 (2d C ir. 1996). Cf. Conduit & Fo und. Corp. v. H artford Cas. Ins. Co., 746 A.2d 1053, 105 8 (N.J. Super. Ct. App. Div. 2000) ( While we look for the probable intent of the 35 III. DISCUSSION The question before the Court at this juncture is whether AT&T is entitled to coverage for the Williamson Fiduciary and Leykin Actions under the 2001 AT&T Program, the 2001 AT&T RunOff Program and/or the 2002 AT&T Program. Not surprisingly, the parties disagree about how the burden of proof should be allocated in this case.133 Because the burden of proof is considered a procedural issue, the forum will apply its burden of proof unless the the primary purpose of the relevant rule of the state of the otherwise applicable law is to affect decision of the issue rather than to regulate conduct of the trial. 134 The Court finds the burden of proof question is designed to affect the outcome at trial, and thus will not apply the rules of the forum state.135 After reviewing the relevant case law of New York, New Jersey and California concerning the burden of proof in coverage cases, the Court is satisfied that regardless of how the burden is allocated, the result is the same under either parties proposed method of allocation. A. AT&T s Definition of Claim In its effort to spread coverage for the Subsequent Actions136 over multiple policy periods, AT&T alleges that each misrepresentation or omission averred in the underlying complaints is the parties and their reasonable expectations in construing insurance policies and construe exclusionary clauses in strict fashion, when the language of an insurance policy is clear, w e must enforc e its terms as written. ). Cf. Morgan, Lewis & Bockius LLP, 929 F. S upp. 76 4, (D.N .J. 1996 ); ML Direct, Inc., 93 Cal. Rptr 2d 846, 850 (Cal. Ct. App. 2000) (explaining policy language that is clear and explicit,...governs. ). 133 See discussion supra II, Part B. See also AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/ E-File 173, at 43; M em. in Supp . of Fed. Ins. M ot. for Part. S umm. J., D .I. 72/E-File 1 17, at 20-2 1. 134 N. Am. Philips Corp. v. Aetna Cas. & Sur. Co., 1995 W L 6284 42, at *3 (D el. Super.), quoting Monsa nto Co. v. Aetna Cas. & Sur. Co., 1993 WL 563244, at *3 (Del. Super. 1993). 135 Id. 136 See discussion supra Part IC. For purposes of this Opinion, the Williamson Fiduciary and Leykin Actions are referred to as the Subsequent Actions, while the Pittleman, Schaffer, Yourman and San Mateo Actions are collective ly referred to a s the Prior A ctions. 36 basis for a separate claim against the Directors.... 137 According to AT&T, the Williamson Fiduciary and Leykin Actions are not merely two Claim. Rather, it maintains that Leykin asserts at least fifteen separate alleged misrepresentations or omissions, each of which, standing alone, is sufficient to state an independent and distinct claim[,]... and that Williamson includes numerous Claims.... 138 Conversely, the Defendants argue that AT&T s assertion that the Subsequent Actions constitute in excess of fifteen individual Claims requires the Court to equate the policy term Claim with the policy term Wrongful Act, a result that the Defendant Insurers argue ignores the clear and unambiguous definition of Claim as set forth in their policies. Lloyd s Primary 2001 AT&T Run-Off Policy and Lloyd s Primary 2001 AT&T Policy define Claim as: 1. any written or oral demand for damages or other relief against any of the Assureds, .... 2. any civil, criminal, administrative or regulatory proceeding initiated against any of the Assureds, including [a] any appeal therefrom; [b] any Securities Action Claim. 139 Meanwhile, Wrongful Act is defined as: 1. any actual or alleged act, error, omission, misstatement, misleading statement, neglect, or breach of duty by the Directors or Officers, individually or collectively, whilst acting in their respective capacities. 2. any actual or alleged act, error, omission, misstatement, misleading statement, neglect or breach of duty by the Company in the purchase or sale or offer to purchase or sell any securities of the Company or in preparing materials of the Company filed with the Securities and Exchange Commission or any similar state agency or in rendering any other public statements regarding the Company, which is alleged in 137 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 36. 138 Id. at 39 (emphasis added). 139 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Endorsement No. 1 at ¶ 8, at 16. J.D. Ex. 8, Lloyd s Prim ary 2001 AT& T Polic y Endorse ment No . 1 at ¶ 6, at 16. A lthough not re levant in this case, L loyd s Primary 2 001 AT &T P olicy, Endo rsement N o. 1 also inclu des proc eedings of the EEO C or gov ernment b ody with jurisdiction over any employment practice violations in this definition. 37 any Securities Action Claim.140 This language is clear and unambiguous. Each alleged misrepresentation, omission, act or breach is a Wrongful Act, and not a Claim. The Court agrees with the Defendants that AT&T s assertion that Williamson and Leykin Claims may be subdivided into dozens of separate acts would impermissibly render meaningless the term Wrongful Act as it is used in the Policies. 141 The Court also agrees with the Defendants Insurers that if the term Claim were so defined and then applied, it would have a nonsensical impact on the Insuring Clauses and would render the term Wrongful Act superfluous. As the Defendant Insurers correctly note, [i]f Claim were to mean each alleged misrepresentation, omission, act or breach by an insured, the Insuring Clause then would have to be read to state that coverage is provided for Loss resulting from any [misrepresentation, omission, act or breach] first made against the Directors and Officers during the policy period for a Wrongful Act. 142 The Court finds that the clear and unambiguous language used to define Claim and Wrongful Act makes clear that these are two separate and distinct terms, which cannot be conflated. Moreover, contrary to AT&T s assertions, each misrepresentation, act, omission or breach does not constitute a Claim because, standing alone, it may never result in a loss or a demand for relief against the insureds.143 140 J.D. Ex. 14, Lloyd s Primary AT&T 20 01 Run-Off Policy, Endorsement No. 1 at ¶ 16, at 18. J.D. Ex. 8, Lloyd s Primary 2001 AT&T Policy, Endorsement No. 1 at ¶ 12, at 18. Although not relevant in this case, Lloyd s Primary 2001 AT&T Policy, Endorsement No.1 also includes Employment Practice Violation by directors or officers at Cl. II, N (1). 141 Joint Reply Br. in Supp. Mot. for Part. Summ. J. by Cont l Cas. Co., Zurich Am. Ins. Co., Gulf Ins. Co. & Twin City Fire Ins. Co ., E-File19 6, at 9 (citations omitted). 142 Id. at 10. 143 See Dura Pharm., Inc. v. Broudo, 125 S. Ct. 1627, 1631-33 (S. Ct. 2005). 38 Given the clear and unambiguous language of the policies at issue, the Court finds the cases offered on this point by AT&T unpersuasive.144 Unlike the policies at issue in the cases on which AT&T relies, the Defendant Insurers policies do not limit the definition of Claim to a demand for money including institution or service of a suit.145 Instead, under these policies an entire civil proceeding constitutes a Claim. 146 A plain reading of the clear and unambiguous definition of Claim compels the Court to conclude that the Williamson Fiduciary Action and the are each one civil proceeding. Another flaw in AT&T s argument that each alleged misrepresentation, omission, act or breach constitutes a Claim, is that no party, including AT&T itself, can under AT&T s proposed definition of the term, tell the Court exactly how many Claims are allegedly covered by the policies. At oral argument, the Defendant Insurers informed the Court that: ... months and months into this litigation.... We still don t know how many claims AT&T thinks there are in this case. It s totally arbitrary. They offer no principal basis for delineating between the different allegations here to figure out what constitutes a claim.147 During that same argument, when specifically asked by the Court [h]ow many claims are there? AT&T could only respond that [t]here are at least 17 claims.... 148 144 See AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 39-42. 145 See Hom e Ins. Co. o f Illinois, 930 F. S upp. 82 5, 833 (E .D.N.Y . 1996); Bay Cities Paving & Grading, Inc., 855 P.2d 1263, 1265 (Cal. 1993); TIG Specialty Ins. Co. v. Pinkmonkey.com, Inc., 375 F.3d 365, 376 (5th Cir. 2004) ; but see Cmty Found. for Jewish Educ. v. Fed. Ins. Co., 2001 WL 664205, at *4 (7th Cir. 2001) (recognizing that Claim as defined in cases like Home Ins. Co., 930 F. Supp. 825 (E.D.N.Y. 1996) is inapplicable to policies that define a civ il proceed ing as a sep arate catego ry of Claim ) . 146 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Endorsement No. 1 at ¶ 8, at 16. J.D. Ex. 8, Lloyd s Prim ary 2001 AT& T Polic y, Endorse ment No . 1 at ¶ 6, at 16. 147 Tr. Oral Argument at 212. 148 Id. at 256 (emphasis added). 39 The policy language is undeniable, clear and unambiguous. A civil proceeding equals a Claim, while an alleged misrepresentation, omission, act or breach equals a Wrongful Act. Because these terms are unambiguous, the Court need not look beyond them to make its determination. B. The Insuring Clause and Single Claim Provisions Having determined that the Williamson Fiduciary and Leykin Actions each constitute one Claim, the Court turns to the Defendants argument that any potential coverage is limited to Claims first made during the applicable policy periods. They assert that because the Subsequent Actions must be deemed first made at the time when the earlier suits149 were filed, AT&T is only potentially entitled to coverage under the policies in effect at the time it notified them about the Prior Actions.150 The Defendant Insurers base their argument on the Insuring Clause and the Single Claim Provision. The Insuring Clause in both the Lloyd s Primary 2001 Run-Off Policy and the Lloyd s Primary 2001 AT&T Policy provides: A. B. 149 Underwriters shall pay on behalf of the Directors and Officers Loss resulting from any Claim first made against the Directors and Officers during the Policy Period for a Wrongful Act. Underwriters shall pay on behalf of the Company Loss which the Company is required or permitted to pay as indemnification to any of the Directors and Officers resulting from any Claim first made against the Directors and Officers during the Policy Period for a Wrongful Act. See discussion of the Pittleman and San Mateo Actions supra Part I, D1 at 8-13. 150 See discussion supra Part ID. For purposes of this Opinion, the Pittleman, Schaffer, Yourman and San Mateo Actions are collectively referred to as the Prior Actions, while the Williamson Fiduciary and Leykin Actions are referred to as the Sub sequent A ctions. 40 C. Underwriters shall pay on behalf of the Company Loss resulting from any Securities Action Claim first made against the Company during the Policy Period for a Wrongful Act.151 The Single Claim Provision found in Lloyd s Primary 2001 Run-Off Policy and Primary 2001 AT&T Policy provides: More than one Claim involving the same Wrongful Act or Interrelated Wrongful Acts shall be deemed to constitute a single Claim and shall be deemed to have been made at the earliest of the following times: 1. The time at which the earliest Claim involving the same Wrongful Act or Interrelated Wrongful Acts is first made, or 2. The time at which the Claim involving the same Wrongful Act or Interrelated Wrongful Acts shall be deemed to have been made pursuant to Clause VI.B. 152 The National Union 2002 AT&T Primary Policy Notice/Reporting Provision provides: ...(b) if written notice of a Claim has been given to the Insurer pursuant to Clause 7(a) above, then a Claim which is subsequently made against an Insured and reported to the Insurer alleging, arising out of, based upon or attributable to the facts alleged in the Claim for which such notice has been given, or alleging any Wrongful Act which is the same as or related to any Wrongful Act alleged in the Claim of which such notice has been given, shall be considered related to the first Claim and made at the time such notice was given.153 151 J.D. Ex. 14, Lloyd s Primary AT&T 20 01 Run-Off Policy, Cl. I. at 3, Endorsement 1 ¶ 6, at 16; J.D. Ex. 8, Lloyd s Primary 2001 AT&T Policy, Cl. I. at 3, Endorsement 1 ¶ 4, at 15-16. 152 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. IV. at 6, Endorsement 1 ¶ 28(C), at 22; J.D. Ex. 8, Lloyd s Primary 2001 AT&T Policy, Cl. IV. at 21, Endorsement 1 ¶ 25(C), at 21-22. 153 J.D. Ex. 20, Nat l Union Fire Ins. Co. Primary 2002 AT&T Policy § 7(b), at 10. 41 Additionally, the National Union 2002 AT&T Primary Policy also contains a New York Claims-Made Amendatory Endorsement that provides, in pertinent part: Claims reported to the Insurer alleging the same or related Wrongful Acts shall be considered reported to the Insurer at the time and during the policy period when the first such Claim was reported.154 Based on its reading of these provisions, the Court finds that the Insuring Clauses of Lloyd s Primary Policies limits coverage to Claims first made during the July 9, 2001 to July 9, 2007 policy period,155 and to the time during which the earliest Claim, as interpreted above, involving the same Wrongful Act or Interrelated Wrongful Acts was first made. 156 Wrongful Act is defined as any actual or alleged act, error, omission, misstatement, misleading statement, neglect or breach of duty[.] 157 Interrelated Wrongful Acts are defined as Wrongful Acts which have as a common nexus any fact, circumstance, situation, event, transaction or series of facts, circumstances, situations, events or transactions. 158 The Court finds the language of these definitions is clear and unambiguous,159 and thus will give these policy terms their plain and ordinary meaning. 160 154 Id. at Endorsement 2, ¶2, at 1. 155 See J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. I. at 16; Lloyd s Primary 2001 AT&T Policy, Cl. I. at 15-16. 156 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. IV. C at 22; Lloyd s Primary 2001 AT&T Policy, Cl. IV. C at 21-22. 157 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. II. N at 18; Lloyd s Primary 2001 AT&T Policy, Cl. II. N at 18. 158 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. II. H at 4; Lloyd s Primary 2001 AT&T Policy, Cl. II. H at 4. 159 See e.g. Seneca Ins. Co. v. Kemper Ins. Co., 2004 WL 1 145830 (S.D.N.Y .). 160 Gov t Employees Ins. Co. v. Kligler, 366 N.E.2d 865, 866 (N.Y. 1977). 42 Clause IV.C of the Lloyd s Primary Policies applies when separate lawsuits involve the same Wrongful Act or Interrelated Wrongful Acts. After carefully comparing the complaints in the Prior and Subsequent Actions, the Court finds that any claims arising from the Williamson and Leykin Actions must be deemed first made within the 1997 to 2001 policy period. This is because the Subsequent Actions involve the same Wrongful Acts and Interrelated Wrongful Acts as those that gave rise to the Prior Actions filed in 1999 and 2000.161 The Wrongful Act that spawned all of the underlying litigation in this case is the March 2000 Transaction, which among other things, resulted in AT&T gaining control of At Home. That Wrongful Act gave rise to the Prior Actions. Each of the complaints in Prior Actions advances the same questions of law and fact: (a) whether the Proposed March 2000 Transactions were grossly unfair to the public stockholders of At Home; (b) whether defendants involved with those ransactions failed to disclose all material facts relating to the Proposed Transactions, including the potential positive future financial benefits that they expect to derive from At Home; (c) whether those defendants willfully and wrongfully failed or refused to obtain or attempt to obtain a purchaser for the assets of At Home at a higher price than that given to Cox and Comcast; (d) whether plaintiffs and members of the Class would be irreparably damaged if the Proposed Transactions were consummated; (e) whether defendants breached or aided and abetted the breach of the fiduciary and other common law duties owed by them to plaintiffs and members of the Class; and (f) whether plaintiffs and members of the Class have been damaged and, if so, what is the 161 See Pittleman and San Mateo Actions, respectively. J.D . Ex. 23, C ompl., Pittleman v. At Home Corp., C.A. No . 17474 NC (D el. Ch. Oct. 1 3, 1999 ); J.D. Ex. 3 1, First Am. C onsol. Co mpl., In re At Home Corp. Stockholders Litigation, Master File No. 413094 (Cal. Super. Ct., San Mateo Co. Oct. 23, 2000). 43 proper measure of those damages. Thus, the Court finds the Prior and Subsequent Actions have, inter alia, the following Interrelated Wrongful Acts in common: (a) AT&T s relationship with At Home created conflicts of interest that the defendants improperly resolved in AT&T s favor;162 (b) AT&T improperly used the March 2000 Transactions in a scheme to obtain complete control of At Home;163 (c) the March 2000 Transactions were unfair to At Home and involved self-dealing by AT&T;164 and (d) the March 2000 Transactions subjected At Home to disadvantageous distribution agreements, including an insufficient share of subscriber revenue and reduced exclusivity rights.165 Claims share a sufficient factual nexus when they are based on the same agreement or when they involve the same underlying circumstance. 166 A comparison of the underlying complaints in this case reveals that Pittleman and the Leykin Action, and San Mateo and the Williamson Fiduciary Action, have more in common than just the required any fact common 162 See e.g., Pittleman Comp l., J.D. Ex. 23 , at ¶¶ 21-32 ; Pittleman Am. Compl,. J.D. Ex. 24, at ¶ 26; Williamson Comp l. & Dem and for Jur y Trial, J.D. E x. 37, at ¶¶ 1-7 , 88-92; Leykin First Am. Consol. Class Action Compl., J.D. Ex. 48, at ¶¶ 48-59. 163 See e.g., Pittleman Am. Com pl., J.D. Ex . 24, at ¶¶ 25 -36; In re At Home Corp. Stockholders Litigation First Am. Co nsol. Com pl., J.D. Ex. 31, at ¶¶ 6, 10, 36-51; Williamson Compl. & Demand for Jury Trial, J.D. Ex. 36, at ¶¶ 39-44 , 50-59; Williamson Comp l. & Dem and for Jur y Trial, J.D . Ex. 37, at ¶¶ 1 -7, 40-46 , 151; Leykin Class Action Co mpl., J.D. E x. 42, at ¶¶ 69 -72; Leykin First Am. Consol. Class Action Compl., J.D. Ex. 48, at ¶¶ 55, 70, 103. 164 See e.g. Pittleman Am. Compl,. J.D. Ex. 24, at ¶¶ 30-36; In re At Home Corp. Stockholders Litigation First Am. Co nsol. Com pl., J.D. Ex. 31, at ¶¶ 1-6, 36-46; Williamson Compl. & Demand for Jury Trial, J.D. Ex. 36, at ¶¶ 5, 39-44 , 134-13 6; Williamson Comp l. & Dem and for Jur y Trial, J.D . Ex. 37, at ¶ 1 -7, 40-46 , 141-14 3; Leykin First Am. Consol. Class Action Compl., J.D. Ex. 48, at ¶¶ 5-6, 61, 98, 103. 165 See e.g. Pittleman Comp l., J.D. Ex. 23 , at ¶¶ 19-20 ; Pittleman Am. Co mpl,. J.D. E x. 24, at ¶¶ 20 , 33; In re At Home Corp. Stockholders Litigation First Am. Co nsol. Com pl., J.D. Ex. 3 1, at ¶ 6; Williamson Comp l. & Deman d for Jury T rial, J.D. Ex. 3 7, at ¶¶ 40-4 6, 77-79 ; Leykin First Am. Consol. Class Action Compl., J.D. Ex. 48, at ¶¶ 49, 60-61(c)-(e), 71-75, 108. 166 Seneca Ins. Co., 2004 WL 1 145830, at *6 (S.D.N.Y.). 44 nexus. 167 These Actions have as their common nexus many facts, all originating from the March 2000 Transactions.168 Thus, based on its comparison of the underling complaints, it is clear to the Court that the March 2000 Transactions, together with the facts, circumstances, and events constituting and attendant to them, tie together the Prior and Subsequent Actions rendering Pittleman and Leykin a single Claim, and San Mateo and Williamson a single Claim, as defined in the policies. Therefore, by operation of the clear and unambiguous policy terms and as a matter of law, the Court finds that AT&T s claims arising from the Subsequent Williamson Fiduciary and Leykin Actions were first made during the July 1, 1997 to July 1, 2001 coverage period and fall outside the scope of coverage under the 2001 AT&T Program, the 2001 Run-Off Program and the 2002 AT&T Program. C. The Prior Notice Exclusion The Defendant Insurers advance another independent ground for denying AT&T coverage for the Williamson Fiduciary and Leykin Actions the Prior Notice Exclusions.169 They assert that as a matter of law, the Court should find the Prior Notice Exclusions operate to bar coverage for these Actions under the 2001 AT&T Program, the 2001 AT&T Run-Off Program, and the 2002 AT&T Program. 167 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. II. H at 4; Lloyd s Primary 2001 AT&T Policy, Cl. II. H at 4. 168 The Court notes that AT&T has acknowledged this common nexus of facts with respect to the San Mateo and Williamson Fiduciary Actions in its representation to the U.S. Court of Appeals for the Ninth Circuit that these two actions involve identical allegations of fact, an identical claim for breach of fiduciary duty, and identical prayers for relief. Br. of Def.-Appellee AT&T Corp., J.D. Ex. 35, at 5. 169 Def. Faraday Capital Ltd. s ( Lloyd s ) Joinder in Fed. Ins. Co. s Mot. for Part. Summ. J. at 1-2, AT&T Corp. v. Clarend on Am. Ins. , D.I. 82/E-File135 (June 7, 2005). 45 The Prior Notice Exclusion contained in Lloyd s Primary 2001 AT&T Policy and Lloyd s Primary 2001 AT&T Run-Off Policy state: Underwriters shall not be liable to make any payment in connection with any Claim ... based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving: A. Any Wrongful Act or any fact, circumstance or situation which has been the subject of any notice given prior to the Policy Period under any other Directors and Officers liability policy, or B. Any other Wrongful Act whenever occurring, which, together with a Wrongful Act which has been the subject of such notice, would constitute Interrelated Wrongful Acts.170 The Exclusion applies to any Claim ... based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving: (1) any Wrongful Act or any fact, circumstance or situation which has been the subject of any notice given prior to the Policy Period under any other Directors and Officers liability policy, or (2) any other Wrongful Act whenever occurring, which, together with a Wrongful Act which has been the subject of such notice, would constitute Interrelated Wrongful Acts[.]171 Similarly, the Defendant National Union 2002 Primary Policy contains a Prior Notice Exclusion that reads: The Insurer shall not be liable to make any payment of Loss in connection with any Claim made against an Insured:... (d) alleging, arising out of, based upon or attributable to the facts alleged, or to the same or related Wrongful Acts 170 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Cl. III, at 5, Endorsement No. 1 at ¶ 19, at 19; J.D. E x. 8, Lloyd s P rimary 200 1 AT& T Polic y, Cl. III, at 5, End orsemen t No. 1 at ¶ 1 6, at 19. 171 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Endorsement No. 1, Cl. III B, ¶ 19 at 19; J.D. Ex. 8, Lloyd s Primary 2001 AT&T Policy, Endorsement No. 1, Cl. III B, at ¶ 16, at 19. 46 alleged or contained in any Claim which has been reported, or in any circumstances of which notice has been given, under any policy of which this policy is a renewal or replacement or which it may succeed in time[.]172 As explained above, Defendant Excess Insurers policies apply in conformity with exclusions found in the Primary Policies.173 Similarly, National Union s 5th and 9th Excess Policies apply subject to the exclusions and limitations found in its 2002 Primary Policy, which also contains the above Exclusion.174 The Court finds that the language of the Prior Notice Exclusions is clear, unambiguous, and undeniably broad.175 As written, the language of this Exclusion encompasses not only any Claims, whether directly or indirectly caused by a Wrongful Act, but also any Claims that in any way involve any Wrongful Act, fact, circumstance or situations alleged in the prior litigation. 176 172 J.D. Ex. 2 0, Nat l Un ion Fire Ins. C o. Primar y 2002 A T&T Policy § 4 (d), at 7. See AT& T An. B r. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 5-7. 173 See supra Part IC; C ertification of H ouseal, D.I . 70/E-File 1 14, at 10-1 2, 14-15 , 16-19, 2 1-22; De f. Zurich Am. Ins. Co. s Mot. for Summ. J. and Joinder in Def. Fed. Ins. Co. s Mot. for Part. Summ. J. as to 20012007 AT&T Run-Off Policies at 1-2, AT&T Corp. v. Clarendon Am. Ins., D.I. 66/E -File 110 (J une 2, 20 05); Joint Reply B r. in Supp. M ot. for Part. S umm. J., E-File19 6, at 17 n.9 ; J.D. Ex. 18, Twin City Fire Ins. Co., 2001 AT&T Run-Off Policy, Endorsement No. 2; J.D. Ex. 12, Twin City Fire Ins. Co., 2001 AT&T Policy, Endorsement No. 4. 174 See Certification of Houseal, D.I. 70/E-File 114, at 22-32; Nat l Union Op. Br., D.I. 69/E-File 113, at 20-21; J.D. Ex. 20, Nat l Union Fire Ins. Co. Primary 2002 AT&T Policy § 4(d), at 7; J.D. Ex. 21, Nat l Union Fire Ins. Co. 2002 5 th Excess Policy § I(a) and (b), at 1; J.D. Ex. 22, Nat l Union Fire Ins. Co. 2002 9th Excess P olicy § I(a) and (b), at 1. 175 See U.S. Underwriters Ins. Co. v. Congregation Kollel Tisereth, TZVI, 2004 W L 2191 051, at *6 (E.D.N .Y. 200 4); Zunenshine, 1998 W L 4834 75, at *4 (S.D .N.Y. 19 98); U.S. Underwriters Ins. Co. v. Zeugma Corp., 1998 W L 6336 79, at *3 (S.D .N.Y. 19 98); citing N.H. Ins. Co. v. Jefferson Ins. Co., 624 N.Y.S.2d 392, 396 (N.Y. App. Div. 1995) (The words arising out of are hardly ambiguous. When used in an exclusion, they are deemed to be broad, general, comprehensive terms ordinarily understood to mean originating from, incident to, or having con nection with ... ); Aloha Pacific, Inc. v. California Ins. Guarantee Ass n, 93 Cal. R ptr. 2d 14 8, 162 (C al. Ct. App. 2000) ( Courts in California and elsewhere have consistently given a broad interpretation to terms such as arising out of in va rious kinds o f insurance pr ovisions. ). Cf. LaValley v. Va. Sur. Co., 85 F. Supp. 2d 740, 744-45 (N.D. Ohio 2000) (following Zunenshine, 1998 W L 4834 75)). 176 Allmerica Fin. Corp. v. Certain Underwriters at Lloyd s London, 2004 W L 23413 88, *6 (Mass. Super.) ; Foster v. Summit Med. Sys., Inc., 610 N.W.2d 350, 354 (Minn. App. 2000) (stating that policies do not 47 Further, as [n]othing in the policy requires that a claim involve precisely the same parties legal theories, Wrongful Act[s], or requests for relief for [the Prior Notice exclusion] to apply, the Court finds that the allegations set forth in the Williamson Fiduciary and Leykin Actions are based upon, arise out of, directly and indirectly result from, and involve the same Wrongful Act. 177 Moreover, it finds the Wrongful Acts alleged in both the Subsequent and Prior Actions are Interrelated Wrongful Acts. The complaints in the underlying actions allege that the March 2000 Transactions led to, or would lead to, AT&T s domination and control of At Home. Thus, they have as a common nexus many of the same facts, circumstances, situations, events, transactions, or series of the same. AT&T argues, as a matter of public policy, that the Court should not interpret the Prior Notice Exclusion so that AT&T s status as controlling shareholder of At Home becomes a triggering fact, circumstance or situation. 178 It asserts that this interpretation would amount to a blanket exemption from D&O coverage for any future directors, officers or controlling shareholders after a single reference to that status which occurs as a matter of course in shareholder actions alleging breach of duties could be determined to interrelate to all ensuing Wrongful Acts.179 Given the require that the Wrong ful Acts or Interrelated Wrong ful Acts be key to finding liability. Under the policies, coverage is excluded if the claim even indirectly result[s] from or [is] in consequence of, or in any way involve[s] the wrongful a cts ¦. ). Cf. N.H. Ins. Co., 624 N.Y.S.2d 392, 396 (N.Y. App. Div. 1995). 177 Zunenshine, 1998 WL 4 83475, at *4, 5 (S.D.N.Y. 1998) (finding a D&O liability policy pending litigation and prior notice exclusions clear and unambiguous. By their terms, they exclude coverage for claims arising out of, dire ctly or indirectly re sulting from, in co nsequenc e of, or in any wa y involving any fac t, circumstanc e, situation, transac tion, event or W rongful Act alle ged in a pe nding lawsuit o r made the subject of a prior notice given to ano ther insurer. ). See Bensalem Twp. v. Int l Surplus Lines Ins. Co., 1992 WL 142024 (E.D. Pa.), rev d on other grounds, 38 F.3d 1303 (3d Cir. 1994 ). 178 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 47; Joint Reply Br. in Supp. Mot. for Part. Sum m. J., E-File19 6, at 26 . 179 Id. 48 plain language of the policies and the allegations made in the Underlying Actions the Court finds this reasoning unpersuasive. It ignores the clear policy definition of Interrelated Wrongful Acts, and the common nexus of facts among the Prior and Subsequent Actions (stemming from the 2000 Transactions) which gave rise to repeated allegations of AT&T s exercise and abuse of control over At Home.180 Therefore, the Court finds as a matter of law that AT&T is not entitled to coverage for the Williamson Fiduciary and Leykin Actions. The Prior Notice Exclusions bar coverage for these Subsequent Actions, because they involve the same and/or Interrelated Wrongful Acts as the Pittleman and San Mateo Actions. D. The Prior Acts and The Prior and Pending Litigation Exclusions 1. The Prior Acts Exclusion The Prior Acts Exclusion found in Lloyd s 2001 AT&T Primary Policy states that the Underwriter shall not be liable to make any payment in connection with any Claim: L. based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving: 1. any Wrongful Act actually or allegedly committed prior to 9:00 a.m. Eastern Standard Time on 9th July, 2001, or 2. any Wrongful Act occurring on or subsequent to 9:00 a.m. Eastern Standard Time on 9th July, 2001, which, together with a Wrongful Act occurring prior to such date would constitute Interrelated Wrongful Acts[.]181 180 Joint Rep ly Br. in Supp . Mot. for P art. Summ. J ., E-File19 6, at 26-27. 181 J.D. Ex. 8 , Lloyd s Prim ary 2001 AT& T Polic y, Endorse ment No . 1 at ¶ 24, at 21 . See Cont l Cas. Co. Mem. of Law in Supp. Mot. Part. Summ. J., D.I. 65/E-File 109, at 6; Certification of Houseal, D.I. 70/E-File 114, at ¶ 38. 49 As noted above, the Defendants Excess Insurer policies apply in conformity with the Primary Policy exclusion.182 Moreover, similar Prior Acts Exclusions also exist in the Defendants National Union, Zurich, Twin City, and Gulf excess policies, under the 2001 AT&T Program and AT&T 2001 RunOff Program.183 Additionally, in their Joint Reply, the Defendants Zurich, Twin City, and Gulf represent that their Prior Acts exclusions are substantially similar to the Defendant Continental s Prior Acts Exclusion.184 The Defendant Continental s 2001 Excess Policy provides that any claim based upon, arising out of, relating to, directly or indirectly resulting from, or in consequence of, or in any way involving: 4. any Wrongful Act (as that term is defined in the Primary Policy), occurring prior to 7/9/01, or any other Wrongful Act, (as that term is defined in the 182 See Certification of Houseal, D.I. 70 /E-File 114, at 10-12 , 14-15, 16-19, 2 1-22; Def. Zurich Am . Ins. Co. s Mot. for Summ. J. and Joinder in Def. Fed. Ins. Co. s Mot. for Part. Summ. J. as to 2001-2007 AT&T RunOff Policies at 1-2, AT&T Corp. v. Clarendon Am. Ins. , D.I. 66/E -File 110 (J une 2, 20 05); De f. Gulf Ins. Co. s Joinder in Cont l Cas. Co. s Mot. for Part. Summ. J. for Decl.There is No Coverage for the Williamson Fid uciary and Leykin Actions U nder the E xcess Run-O ff and 200 1 Contine ntal Policies a t 2, AT&T Corp. v. Clarendon Am. Ins., D.I. 73/E-File 118 (June 6, 2005); Def. Gulf Ins. Co. s Joinder in Fed. Ins. Co. s Mot. for Part. Summ. J. for Decl.There is No Coverage for the Underlying Litigation Under the AT&T Run-Off Policy Tower at 3-4, AT&T Corp. v. Clarendon Am. Ins., D.I. 75/E -File 120 (J une 6, 20 05); J.D . Ex. 19, G ulf Run-Off P olicy; Def. T win City Fire Ins. Co. s Not. Joinder. in Mots. for Part. Summ. Ins. Co. Filed in Connection with Williamson Fid uciary & Leykin Actions at 2-3, AT&T Corp . v. Clarendon A m. Ins., D.I. 81/E -File130 (J une 7, 20 05); Joint Rep ly Br. in Supp. M ot. for Part. S umm. J., E-File19 6, at 17 n.9 ; J.D. Ex. 18 , Twin City Fir e Ins. Co. 20 01 AT &T R un-Off Policy, Endorsement No. 2; J.D. Ex. 12, Twin City Fire Ins. Co., 2001 AT&T Policy, Endorsement No. 4. 183 See Nat l Union Op. Br., D.I. 69/E-File 113, at 18; J.D. Ex. 9, Nat l Union Fire Ins. Co. 2002 AT&T Primary P olicy, Endo rsement N o. 2 ; Def. Zurich Am. Ins. Co . s Mot. for Summ. J. and Joinder in Def. Fed. Ins. Co. s Mot. for Part. Summ. J. as to 2001-2007 AT&T Run-Off Policies at 2, AT&T Corp. v. Clarendon Am. Ins. , D.I. 66/E-File 110 (June 2, 2005); J.D. Ex. 11, Zurich Policy; Endorsement 2; Def. Gulf Ins. Co. s Joinder in Fed. Ins. Co. s M ot. for Part. S umm. J. 3-4 , D.I. 75/E -File 120; J.D . Ex. 19, G ulf Ins. Co. Ru n-Off Policy; D ef. Twin City Fire Ins. Co. s Not. Joinder. in Mots. for Part. Summ. Judg. Filed in Connection with Williamson Fid uciary & Leykin Actions at 2-3, AT&T Corp . v. Clarendon A m. Ins., D.I. 81/E -File130 (J une 7, 20 05); Joint Rep ly Br. in Supp . Mot. for Part. Sum m. J., E-File19 6, at 17 n.9 ; J.D. Ex. 18 , Twin City Fir e Ins. Co. 20 01 AT &T R un-Off Po licy, Endorsement No. 2; J.D. Ex. 12, Twin City Fire Ins. Co. 2001 AT&T Policy, Endorsement No. 4. 184 Joint Rep ly Br. in Supp . Mot. for P art. Summ. J ., E-File19 6, at 17 n.9; T win City Fire Ins. C o. s Not. Joinder, D .I. 81/E-File1 30, at 3. 50 Primary Policy), occurring 7/9/01 which, together with a Wrongful Act occurring prior to 7/9/01, would be considered interrelated Wrongful Acts (as that term is defined in the Primary Policy).185 Similarly, the Prior Acts Exclusion found in the National Union 2002 AT&T Primary Policy reads: [T]he Insurer shall not be liable to make any payment for Loss in connection with a Claim made against an Insured alleging any Wrongful Act occurring prior to July 9, 2001 or after the end of the Policy Period. This policy only provides coverage for Wrongful Act occurring on or after July 9, 2001 and prior to the end of the Policy Period and otherwise covered by this policy. Loss arising out of the same or related Wrongful Act shall be deemed to arise from the first such same or related Wrongful Act.186 National Union s 5th and 9th Excess Policies apply subject to the Prior Acts Exclusion found in its 2002 Primary Policy. 187 These policies provide ... coverage in accordance with the same terms, conditions, exclusions and limitations as the Followed 2002 AT&T National Union Primary Policy, which contains the above Exclusion.188 The Defendants urge that the Prior Acts Exclusions in the Primary and Excess Policies bar coverage for the Williamson Fiduciary and Leykin Actions because these Actions are based on, arise out of or are attributable to alleged Wrongful Acts that occurred, were committed or attempted, before July 9, 2001, and Wrongful Acts that occurred after July 9, 2001, which they assert share 185 J.D. Ex. 1 0, Cont l Ca s. Co. 200 1 Excess Policy, End orsemen t 4. See Cont l Cas. C o. Mem . of Law in Supp. M ot. Part. Sum m. J., D.I. 65 /E-File 109 . 186 J.D. Ex. 2 0, Nat l Un ion Fire Ins. C o. 2002 AT& T Prim ary Policy, E ndorsem ent No. 1 1. See Nat l Union Op. Br., D.I. 69/E-File 113, at 19. 187 See Certification of Houseal, D.I. 70/E-File 114, at 22-32; Nat l Union Op. Br., D.I. 69/E-File 113, at 20-21; J.D. Ex. 20, Nat l Union Fire Ins. Co. Primary 2002 AT&T Policy § 4(d), at 7; J.D. Ex. 21, Nat l Union Fire Ins. Co. 2002 5 th Excess Policy § I(a) and (b), at 1; J.D. Ex. 22, Nat l Union Fire Ins. Co. 2002 9th Excess P olicy § I(a) and (b), at 1. 188 J.D. Ex. 21, Nat l Union Fire Ins. Co. 2002 5th Excess Policy § I, at 1; J.D . Ex. 22, Nat l Union F ire Ins. Co. 2002 9 Excess Policy § I, at 1. th 51 a common nexus with the pre-July 9, 2001 acts.189 They further aver that the Williamson Fiduciary Action arose from Wrongful Acts, occurring before the March 2000 Transactions and continuing through the September 2001 At Home Bankruptcy, and that all Wrongful Acts occurring after July 9, 2001, share a common nexus with those acts occurring before that date. Thus, they assert that the Williamson Fiduciary and Leykin Actions are not covered Claims. With a few exceptions, AT&T disputes the Defendants contentions that the allegations made in the Subsequent Actions arise from the March 2000 Transactions and argue that the Defendants exclusions are ambiguous.190 Thus, AT&T maintains that the exclusions must be strictly construed in favor of coverage. Specifically, as to the Prior Acts Exclusions, AT&T admits that certain of the Claims in Leykin and Williamson are based on Wrongful Acts allegedly committed prior to July 9, 2001. 191 However, it argues that other Claims took place after July 9, 2001, and that the Defendants present no undisputed evidence proving the Wrongful Acts alleged in the underlying complaints actually occurred.192 Finally, it challenges the Defendants overly broad application of policy language, arguing their determination that the post July 9, 2001 Wrongful Acts are interrelated to the pre-July 9, 2001 Wrongful Acts is too tenuous. 193 189 See Cont l Cas. Co. Mem. of Law in Supp. Mot. Part. Summ. J. for Decl. There is No Coverage for Williamson Fid uciary & Leykin Actions U nder Exc ess Run-O ff & 2001 Cont l Po licies at 15-17 , AT&T Corp. v. Clarendon Am. Ins., D.I. 65/E -File 109 (J une 2, 20 05); De f. Zurich Am. I ns. Co. s M em. of P.& A. in Supp . Of Mo t. for Summ . J. at 5-8, AT&T Corp. v. Clarendon Am. Ins., D.I. 66/E -File 110 (J une 2, 20 05); Joint Reply Br. in Supp. Mot. for P art. Summ. J ., E-File19 6, at 36-38. 190 See AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 44-4 5, 51; AT &T A n. Br. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 25. 191 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 67. 192 See AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 66-68. 193 See AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 68-6 9, citing Cont l Cas. Co. v. Wendt, 205 F.3d. 1258, 1263 (11 th Cir. 2000). 52 As with the Defendants Prior Notice Exclusions, after careful comparison of the plain, unambiguous definition of common nexus and the allegations made in the Prior and Subsequent Actions,194 the Court finds that the Prior Acts Exclusion bars coverage for the Williamson Fiduciary and Leykin Actions. Moreover, the Court does not find ambiguity in the phrases same or related, based upon and arising out of, even where such terms are not defined within these policies.195 The Court agrees with the Defendant National Union that the mere absence of a definition for a term, by itself, does not render the undefined term ambiguous.196 Indeed, any rule that rigidly presumed ambiguity from the absence of a definition would be illogical and unworkable. 197 Therefore, as AT&T offers no reasonable alternative interpretation for the Prior Acts Exclusions, the Court finds its clear, unambiguous terms enforceable as written.198 2. The Pending and Prior Litigation Exclusion 194 See Cont l Cas. C o. Mem . of Law in Sup p. Mot. P art. Summ. J ., D.I. 65/E -File 109, at 1 5-17; Pittleman Comp l., J.D. Ex. 2 3; In re At Home Corp. Stockholders Litigation First Am. Consol. Compl., J.D. Ex. 31; Williamson Comp l. & Dem and for Jur y Trial, J.D . Ex. 36; Leykin Consol. Class Action Compl., J.D. Ex. 47. 195 See Nat l Union Op. Br., D.I. 69/E-File 113, at 8; Joint Reply Br. in Supp. Mot. for Part. Summ. J., EFile196, at 16; AT&T An. Br. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 5, 7, 10, 25-26. See Zunenshine, 1998 WL 4 83475, at * 4 (S.D.N.Y. 1998). 196 Bay Cities Paving & Grading, Inc., 855 P.2d 1263, 1270 (Cal. 1993). 197 Id. 198 See Champlain Enters. v. Chubb Custom Ins. Co., 316 F. S upp. 2d 123, 12 9 (N.D .N.Y. 20 03); Hugo Boss Fashions, Inc. v. Fed. Ins. Co., 1999 WL 1072819, at *1 (S.D.N.Y. 1999) (enforcing prior acts exclusion because [t]o hold otherwise would not only amount to adoption of an unreasonable interpretation of the policy, but would also amount to th is Court imp ermissibly red rafting the contra ct in the plaintiffs favor. ); New Ha mpshire Ins. Co. v. Jefferson Ins. Co., 624 N .Y.S.2d 392, 39 6 (N.Y . App. D iv. 1995) . Accord Fed. Ins. Co. v. Learning Group Intern., Inc., 1995 WL 3 09047, at *2 (9th Cir. 1995) (declining to find language of a prior acts exclusion ambiguous in part and reiterating that [w]here contract language is clear and explicit and does not lead to an absurd result, we ascertain [the p arties ] intent from the written pro visions and g o no further. ); Gateway Group Advantage, Inc. v. McCarthy, 300 F. S upp. 2d 236, 24 1 (D. M ass. 2003 ). Cf. Sinopoli v. The North River Ins. Co., 581 A.2d 1368, 1370 (N.J. Super. Ct. App. Div. 1990) (affirming summary judgment for home owner s liability insurer and stating the court is not permitted, even under the guise of good faith and peculiar circumstances, to alter the terms of an otherwise unambiguous contract. If plainly expressed, the insurers are entitled to have liability limitations construed and enforc ed as exp ressed. ). 53 Pending and Prior Litigation Exclusions are found in the 2001 AT&T Program, the 2001 AT&T Run-Off Programs, and the 2002 AT&T Program.199 The Defendant Continental s Excess Policies, contain Pending and Prior Litigation Exclusions that provide: any claim based upon, arising out of, relating to, directly or indirectly resulting from, or in consequence of, or in any way involving: 3a. Any fact, circumstance, situation, transaction or event underlying or alleged in any prior and/or pending litigation as of 7/9/01, regardless of the legal theory upon which such litigation is predicated.200 Likewise, the National Union 2001 AT&T Excess Policy Pending and Prior Litigation Exclusion states: Insurer shall not be liable for any Loss in connection with any Claim(s) made against any Insured(s): alleging, arising out of, based upon or attributable to any pending or prior litigation as of July 9, 2001 or alleging or derived from the same or essentially the same facts as alleged in such pending or prior litigation.201 The Defendant Insurers Zurich and Twin City, in their Joint Reply, represent that their Exclusions are substantially similar to the Continental Prior Litigation Exclusions.202 These Defendants, together with Defendant Gulf, also state that their policies follow form, incorporate or apply subject to or in accordance with the terms, conditions, endorsements and exclusions of the 199 Cont l Cas. C o. Mem . of Law in Sup p. Mot. P art. Summ. J ., D.I. 65/E -File 109, at 5 . 200 Cont l Cas. Co. Mem. of Law in Supp. Mot. Part. Summ. J., D.I. 65/E-File 109, at 14; J.D. Ex. 10, Cont l Cas. Co. 2001 Excess Policy § XII, Endorsement 1, at ¶ 3; J.D. Ex. 17, Cont l Cas. Co. 2001 Run- Off Policy § XII, En dorseme nt 3, ¶ 3a. 201 J.D. Ex. 9, Nat l Union Fire Ins. Co. 2002 AT&T Primary Policy, Endorsement No. #3. 202 See Joint Rep ly Br. in Supp . Mot. for P art. Summ. J ., E-File19 6, at 17 n.9; T win City Fire Ins. C o. s Not. Join der, D.I. 8 1/E-File13 0, at 2-3; D ef. Zurich Am . Ins. Co. s M ot. for Summ . J. and Joind er, D.I. 66 /E-File 110, at 1-2; J.D. Ex. 11, Zurich Am. Ins. Co. 2001 AT&T Policy, Endorsement No. 1; J.D. Ex. 12, Twin City Fire Ins. Co., 2001 AT&T Policy, Endorsement No. 2. 54 underlying policies.203 A Prior Litigation Exclusion also exists in the National Union 2002 AT&T Primary Policy. It states: The Insurer shall not be liable to make any payment of Loss in connection with any Claim made against an Insured:... (e) alleging, arising out of, based upon or attributable to, as of the Continuity Date, any pending or prior: (1) litigation; or (2) administrative or regulatory proceeding or investigation of which an Insured had notice, or alleging or derived from the same or essentially the same facts as alleged in such pending or prior litigation or administrative or regulatory proceeding or investigation[.]204 As noted above, the National Union 5th and 9th Excess Policies apply subject to the exclusions and limitations found in its 2002 AT&T Primary Policy, which contains the above Exclusion.205 The Defendants argue that the language of their Exclusions is clear and enforceable according to their terms. 206 Therefore, the Defendants assert that this language plainly excludes the Leykin Action and Williamson Fiduciary Action Claims because these two Claims are derived from [the] same or essentially the same facts, 207 and are based on, arising out of, relating to, directly or 203 See Twin City F ire Ins. Co. s N ot. Joinder , D.I. 81/E -File130, a t 2-3; Def. Zu rich Am. Ins. C o. s Mot. for Summ . J. and Joind er, D.I. 66 /E-File 110 , at 1-2; J.D. E x. 11, Zurich Am. Ins. Co . 2001 A T&T Policy, Endorseme nt No. 1; J.D. Ex. 12 , Twin City Fire Ins. Co., 200 1 AT& T Policy, End orsement No. 2 ; Def. Gulf Ins. Co. s Joinder, D.I. 73/E-File 118, at 4; Def. Gulf Ins. Co. s Joinder, D.I. 75/E-File 120, at 3. 204 J.D. Ex. 2 0, Nat l Un ion Fire Ins. C o. Primar y 2002 A T&T Policy § 4 (e), at 7. See AT& T An. B r. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 5-7. 205 See Certification of Houseal, D.I. 70/E-File 114, at 22-32; Nat l Union Op. Br., D.I. 69/E-File 113, at 19-21; J.D. Ex. 20, Nat l Union Fire Ins. Co. Primary 2002 AT&T Policy § 4(d), at 7; J.D. Ex. 21, Nat l Union Fire Ins. Co. 2002 5 th Excess Policy § I(a) and (b), at 1; J.D. Ex. 22, Nat l Union Fire Ins. Co. 2002 9th Excess P olicy § I(a) and (b), at 1. 206 Cont l Cas. Co. Mem. of Law in Supp. Mot. Part. Summ. J., D.I. 65/E-File 109, at 14-15; Nat l Union Op. Br., D.I. 69/E-File 113, at 18. 207 Nat l Union Op. Br., D.I. 69/E-File 113, at 18. 55 indirectly resulting from, or in consequence of, or in any way involving the same facts, circumstances, situations, transactions or events already alleged in the Pittleman and the San Mateo Actions, which were pending as of, or filed prior to July 9, 2001.208 After contesting the Defendants arguments that the Subsequent Actions arise from the March 2000 Transactions and asserting that the Defendants exclusions are ambiguous,209 AT&T argues that public policy precludes treat[ing] its status as controlling shareholder as a fact, circumstance or situation sufficient to trigger the Prior Litigation Exclusion.210 It asserts that the Defendants proposed interpretation is absurd, overly broad and would eviscerate coverage, thus rendering it illusory. 211 AT&T maintains this exclusion must be strictly construed against the Defendant Insurers in favor of coverage.212 As explained above, based on its comparison of the underlying complaints and the plain and unambiguous policy language, the Court finds the pre-July 9, 2001 Pittleman and San Mateo Actions have a common nexus with the later filed Leykin and Williamson Actions based in the multiple shared facts, circumstances, and situations stemming from the March 2000 Transactions. The Pending and Prior Litigation Exclusion bars coverage because these Subsequent Actions involve the same and/or Interrelated Wrongful Acts as the Prior Actions, in that the allegations in the 208 Cont l Cas. Co. Mem. of Law in Supp. Mot. Part. Summ. J., D.I. 65/E-File 109, at 14-15 . 209 See AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 44-4 5, 51; AT &T A n. Br. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 25. 210 AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at at 44 -46, 47; A T&T An. Br. in O pp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 25-26. 211 AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 46-5 1; AT& T An. B r. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 25. 212 See AT& T Cor p. s Conso l. An. Br. in O pp n, D.I. 1 24/E-File 1 73, at 44-4 5; AT& T An. B r. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 24. 56 underlying complaints concern AT&T s domination and control of At Home arising from the March 2000 Transactions. Thus, the Court agrees with the Defendants that the Leykin and Williamson Fiduciary Action Claims fall within the scope of this Exclusion because these Actions derive from the same or essentially the same facts and are based upon, arise out of, directly or indirectly result from, are in consequence of, and in any way involve the same facts, circumstances, situations, transactions or events that underlie the Prior Actions. AT&T s public policy argument as to its controlling shareholder status triggering the Pending and Prior Litigation Exclusion is unpersuasive for the reasons set forth above.213 Further, the Court finds this clause is clear, unambiguous214 and therefore not against public policy to enforce .... 215 E. Consideration of the Allegations in the Underlying Suits Versus Actual Facts AT&T contends that the Defendants improperly and exclusively relied on the allegations in underlying complaints, not actual facts, to bar coverage for the Williamson Fiduciary and Leykin Actions. Therefore, it asserts that the Defendants fail to satisfy their burden on summary 213 See supra at Part IIIC. 214 Zunenshine, 1998 W L 4834 75, at *4 (S.D .N.Y.); Juszkiewicz v. Fed. Ins. Co., 1999 W L 1044 330, at *2 (9th Cir.). See, e.g., Seneca Ins. Co., 2004 W L 1145 830, at *6 ( S.D.N.Y .) (explaining tha t Home Ins. Co. v. Spectrum Info., 930 F. Supp. 825, 833 (E.D.N.Y. 1996), on which AT&T relies, stands for the proposition that the applicability of a provision ... that excludes from coverage loss in any way related to a fact, circumstance, or situation that has been the subject of notice under a prior policy depends on whether there was a sufficient factual nexus for the exclusio n to apply . ). See also Nat l Un ion Fire In s. Co. v. Willis , 296 F.3d 336, 341-42 (5th Cir. 2002) ; Comerica Bank v. Lexington Ins. Co., 3 F.3d 9 39, 942 -44 (6th C ir. 1993). Accord ML Direct, Inc., 93 Cal. Rptr 2d 846, 852-53 (Cal. Ct. App. 200 0). 215 Juszkiewicz, 1999 W L 1044 330, at *2 ( 9th Cir.). Cf. Zunenshine, 1998 WL 483475, at *5; ML D irect, Inc., 93 Cal. Rptr. 2d 846 at 853. 57 judgment.216 In opposition, the Defendants argue that the Court need not look beyond the complaints nor determine for itself the actual facts in the underlying litigation, to resolve the coverage issues raised at this stage of the proceedings.217 According to the Defendants, AT&T s submission in this case of thousands of pages of documents produced during discovery in the Williamson Fiduciary Action is a ploy to preclude summary judgment by creating the appearance of some factual dispute. 218 AT&T disagrees, arguing that, in addition to the underlying shareholder allegations, the Court should consider the actual facts AT&T developed through discovery in the Williamson Fiduciary Action.219 It offers this amply supported record evidence to show the existence of genuine issues of material fact as to whether the underlying claims in the Prior and Subsequent Actions are interrelated.220 It maintains the Defendants exclusive reliance on bald, unsupported allegations fails to satisfy their summary judgment burden to show that undisputed facts establish an interrelationship between all of the Claims asserted in these Actions.221 In cases involving policies with similar single claim provisions, prior notice and/or prior litigation exclusions, courts determine coverage based on the allegations in the underlying complaints and not the actual facts. 222 Moreover, as explained above, where policy language is 216 See AT&T An. Br. in Opp n to Nat l Union s Mot. for Part. Summ. J., D.I. 126/E-File 175, at 29-30. 217 Joint Rep ly Br. in Supp . Mot. for P art. Summ. J ., E-File19 6, at 19. 218 Id. at 20. 219 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 51. 220 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 52-53. 221 AT&T Corp. s Consol. An. Br. in Opp n, D.I. 124/E-File 173, at 52. 222 See, e.g., Highwo ods Properties, Inc. v. Executive Risk Indem., Inc., 407 F. 3d 917 (8th Cir. 2005) (affirming a decision of the United States District Court for the Western District of Missouri granting summary judgment to insurer based on the underlying complaints and the language of the claims made liability policy and not discovery.); Zunenshine, 1998 WL 483475 (S.D.N.Y.) (holding that where pending litigation or prior notice exclusions are at issue, and there is no judicial determination of liability in underlying suit, insurer may rely on 58 clear and unambiguous, it is given its plain meaning. Unquestionably, there are factual disputes in the underlying shareholder suits. For example, AT&T vehemently denies it abused its control over At Home for its own benefit and maintains that it tried to help At Home.223 However, in the present coverage action and, notwithstanding the voluminous exhibits proffered in support of its position, AT&T s denials of various allegations asserted against it in the underlying actions do not constitute factual disputes sufficient to defeat summary judgment. Further, by their present motions, the Defendants seek a determination as to whether the Subsequent Actions involve the same or Interrelated Wrongful Acts. Moreover, it is undisputed that the terms of the policies at issue address alleged wrongful acts.224 Therefore, the law requires that the Court decide these issues based on the allegations in the complaints and the relevant policy provisions.225 At this stage of the proceedings, it is not the Court s role to evaluate the validity or truth of allegations made in the underlying complaints by undertaking an analysis of the actual facts or extrinsic evidence offered to refute allegations made in those Actions. For purposes of these Motions, such evidence does not create genuine issues of material fact necessary to preclude summary judgment. AT&T s theory that this Court must, in essence, adjudicate the underlying 223 allegations in co mplaint Corp. s Consol. an exclusion applies.) . 124/E-File 173, at 18, 20. See AT&T to d emonstrate An. Br. in Opp n, D.I. 224 J.D. Ex. 14, Lloyd s Primary AT&T 2001 Run-Off Policy, Endorsement No. 1 at ¶ 16, at 18. J.D. Ex. 8, Lloyd s Prim ary 2001 AT& T Polic y, Endorse ment No . 1 at ¶ 12, at 18 . 225 Steadfast Ins. Co., 277 F. S upp. 2d 245, 25 1 (S.D.N .Y. 200 3); Holman, 616 N.E.2d 499, 500 (N.Y. 1993) ; Tartaglia , 658 N.Y.S.2d 388, 390 (N.Y. App. Div. 1997); Voorhees, 607 A.2 d 1255 , 1259 (N .J. 1992 ); Fed. Ins. Co., 885 A.2d 465, 468 (N .J. Super. Ct. App. Div. 2005); Hebela , 851 A.2d 75, 79 (N.J. Super. Ct. App. Div. 2004) ; Rosario , 799 A.2 d 32, 40 (N.J. Sup er. Ct. App . Div. 2002) ; Powe ll, 760 A.2 d 1141 ,1144 (N .J. Super. C t. App. D iv. 2000) ; Haywa rd, 430 F.3 d 989, 9 91 (9th C ir. 2005); Scottsdale Ins. Co., 115 P.3d 460, 466 (C al. 2005); Montrose Chem. Corp., 861 P.2d 1153, 1157 (C al. 1993 ). Cf. Belt Painting Corp., 795 N.E.2d 15, 17 (N.Y. 2003); Hampton Med. Group, P.A., 840 A.2d 915, 920 (N.J. Super. Ct. App. Div. 2004). 59 shareholder suits to determine the applicability of particular policy exclusions or coverage provisions is contrary to case law and the express terms of the policies. If such an approach were necessary to determine coverage obligations, it would be virtually impossible for insurers issuing Claims made policies to decide whether a particular lawsuit falls within an earlier policy period until all underlying allegations are proven or refuted. As the Defendants aptly note, AT&T s theory would wreak havoc with the entire system of claims made insurance. 226 IV. CONCLUSION For the reasons set forth above, the Defendants Motions for Partial Summary Judgment filed pursuant to Phase 1of the Case Management Order are GRANTED. IT IS SO ORDERED. Jan R. Jurden, Judge 226 Def. Fed. Ins. Co. Reply Br., D.I. 132/E-File 198, at 11. 60
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