Use this button to switch between dark and light mode.

Experience a New Era in Legal Research with Free Access to Lexis+

ConAgra Foods, Inc. v. Lexington Ins. Co.

ConAgra Foods, Inc. v. Lexington Ins. Co.

Supreme Court of Delaware

April 7, 2011, Submitted; April 28, 2011, Decided

No. 227, 2010

Opinion

 [*64]  RIDGELY, Justice, for the Majority:

This case arises from the alleged contamination in 2007 of certain Peter Pan® and Great Value® peanut butter products that Plaintiff-Below/Appellant, ConAgra Foods, Inc. ("ConAgra"), manufactured at its Sylvester, Georgia plant site. The Centers for Disease Control ("CDC") informed ConAgra that it suspected a link between a certain strain  [**2] of salmonella and those peanut butter products. Thereafter, ConAgra announced a voluntary, nationwide recall of all its peanut butter products. But, some of the peanut butter products reached consumers, and many of those consumers have sued ConAgra.

ConAgra had purchased an insurance policy from Defendant- Below/Appellee, Lexington Insurance Co. ("Lexington"), to insure itself against personal injury claims arising from contamination of its products. ConAgra sought coverage under that policy. Lexington denied coverage. ConAgra and Lexington have different views on the extent to which the insurance policy provides coverage because they interpret the provision in that policy called the "lot or batch" provision differently. For insurance coverage purposes, a "lot or batch" provision may operate to treat as a group all insurance claims that arise out of the same lot or batch of products. ConAgra contends that the "lot or batch" provision serves to expand coverage and does not apply where there is a single "occurrence," as defined by the policy. Lexington claims that the "lot or batch" provision applies to limit coverage and requires ConAgra to satisfy a separate deductible ("retained limit")  [**3] for each separate lot or batch to access coverage. The Superior Court upheld Lexington's position.

We conclude that the "lot or batch" provision of the policy is ambiguous. Under  [*65]  one of the two reasonable interpretations of the "lot or batch" provision, Lexington's duties to defend and indemnify were triggered. Because the policy arguably provides coverage to ConAgra, Lexington's duty to defend was thereby triggered when ConAgra satisfied the applicable "retained limit" for a single "occurrence." Accordingly, we reverse the judgment of the Superior Court and remand to ascertain the intent underlying the ambiguous policy language for purposes of determining whether there is ultimate policy coverage.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

21 A.3d 62 *; 2011 Del. LEXIS 226 **

CONAGRA FOODS, INC., Plaintiff Below-Appellant, v. LEXINGTON INSURANCE CO., Defendant Below-Appellee.

Subsequent History: On remand at, Partial summary judgment denied by, As moot ConAgra Foods, Inc. v. Lexington Ins. Co., 2012 Del. Super. LEXIS 356 (Del. Super. Ct., Apr. 9, 2012)

Prior History:  [**1] Court Below: Superior Court of the State of Delaware in and for New Castle County. C.A. No. 09C-02-170.

ConAgra Foods, Inc. v. Lexington Ins. Co., 2009 Del. Super. LEXIS 408 (Del. Super. Ct., Oct. 30, 2009)

Disposition: REVERSED and REMANDED.

CORE TERMS

Batch, Occurrence, peanut butter, coverage, Endorsement, triggered, products, parties, general liability, manufactured, ambiguous, insured, limits, purposes, insurance policy, duty to defend, bodily injury claim, insurance coverage, bodily injury, aggregation, insurance contract, day period, single occurrence, property damage, unambiguous, plant, terms, provide coverage, summary judgment, interpretations

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment, Appellate Review, Standards of Review, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Judicial Review, Contracts Law, Contract Interpretation, Ambiguities & Contra Proferentem, General Overview, Ordinary & Usual Meanings, Ambiguous Terms, Unambiguous Terms, Plain Language, Intent, Parol Evidence, Extrinsic Evidence, Commercial General Liability Insurance, Obligations of Parties, Insurers, Allegations in Complaints, Construction Against Insurers, Coverage Favored, Business Insurance, Duty to Defend