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United States District Court for the Eastern District of Wisconsin
August 18, 2021, Decided; August 18, 2021, Filed
Case No. 2:18-CV-02034
[*591] DECISION AND ORDER
This case involves a dispute between Plaintiff Joy Global, Inc. ("Joy Global") and two of Joy Global's insurers, Defendants Columbia Casualty Company ("Columbia") and Travelers Casualty and Surety Company of America ("Travelers") (collectively, the "Insurers"). In 2016, Joy Global was acquired by a multinational corporation, Komatsu America Corp. ("Komatsu"). In response to the acquisition, [*592] Joy Global's shareholders filed eight lawsuits against Joy Global which were eventually settled. The insurers denied coverage for the amounts paid in settlement. Joy Global brings this action against [**2] the insurers alleging the amounts paid in settlement were covered by its policies and alleging that Columbia breached the implied covenant of good faith. Before me today are cross-motions for summary judgment on the issues of coverage and breach of contract and Columbia's motion for summary judgment on the issue of good faith.
Joy Global was a manufacturer and servicer of heavy equipment used in mining. Beginning in the 2006-2007 policy year, Joy Global annually purchased Directors and Officers ("D&O") liability insurance from Columbia. In the first quarter of 2016, Joy Global began the process of renewing its D&O liability insurance which was to expire on July 31, 2016. On July 31, 2016, Joy Global announced it had entered into an agreement to be acquired by Komatsu. Upon learning of the acquisition, Columbia informed Joy Global that the transaction constituted a material change in circumstances enabling Columbia to renegotiate the contract. Columbia proposed several. After some discussion, Joy Global purchased renewal coverage for the 2016-2017 policy. The Columbia policy set forth the core terms and conditions of the insurance program and Travelers issued an [**3] excess "follow form" policy, providing coverage on the same terms and conditions as the Columbia policy (with minor exceptions not at issue here) for losses in excess of the amount covered by the Columbia policy.
Over the course of the ensuing weeks, numerous Joy Global shareholders filed lawsuits against Joy Global and its directors and officers challenging their representations and conduct with respect to the proposed sale. Each of the shareholder suits alleged that Joy Global and its directors and officers had issued a false or misleading proxy report for the purpose of inducing shareholders to vote their shares in support of a merger agreement which secured inadequate consideration for Joy Global's shares.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
555 F. Supp. 3d 589 *; 2021 U.S. Dist. LEXIS 155494 **; 2021 WL 3667077
Joy Global Inc. (n/k/a Komatsu Mining Corp.), Plaintiff, vs. Columbia Casualty Company, et al., Defendants.
Subsequent History: Appeal filed, 09/16/2021
Affirmed by Komatsu Mining Corp. v. Colum. Cas. Co., 2023 U.S. App. LEXIS 1639 (7th Cir. Wis., Jan. 23, 2023)
settlement, inadequate consideration, insured, shareholders, coverage, acquisition, suits, merger, documents, unambiguous, entity, shares, parties, insurance policy, summary judgment motion, ownership interest, summary judgment, induced, proxy, directors and officers, settlement agreement, misleading, motions, argues