Hartree Natural Gas Storage, LLC v. AIG Specialty Insurance Company

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

HARTREE NATURAL )
GAS STORAGE, LLC, )
Plaintiff, )
v. ) C.A. No. N22C-05-081 PRW
) CCLD
AIG SPECIALTY )
INSURANCE COMPANY, )
Defendant.* )

Submitted: September 11, 2025
Decided: December 9, 2025

Upon Defendant AIG Specialty Insurance Company’s
Motion for Summary Judgment,
DENIED.

MEMORANDUM OPINION AND ORDER

David J. Baldwin, Esquire, and Peter C. McGivney, Esquire, BERGER MCDERMOTT
LLP, Wilmington, Delaware; Christine S. Haskett, Esquire (argued), Hakeem S.
Rizk, Esquire, Billie Mandelbaum, Esquire, David A. Luttinger, Jr., Esquire,
COVINGTON & BURLING LLP, San Francisco, California, Attorneys for Plaintiff
Hartree Natural Gas Storage, LLC.

Kurt M. Heyman, Esquire, Aaron M. Nelson, Esquire (argued), and Denise S. Kraft,
Esquire, HEYMAN ENERIO GATTUSO & HIRZEL LLP, Wilmington, Delaware,
Attorneys for Defendant AIG Specialty Insurance Company.

WALLACE, J.
This Memorandum Opinion and Order resolves AIG Specialty’s Motion for

Summary Judgment. For the reasons explained now, that motion is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. THE REMAINING PARTIES

Plaintiff Hartree Natural Gas Storage, LLC, is a Delaware limited liability

company that operates out of Texas and is the named insured on the insurance

policies at issue in this action.1 Defendant AIG Specialty Insurance Company is an

Illinois corporation with its principal place of business in New York.2

B. THE UNDERLYING TRANSACTION AND RELATED INSURANCE

In June 2021, Hartree entered into a Membership Interest Purchase Agreement

with PAA Natural Gas Storage, L.P. (“PAA”), in part for the acquisition of the Pine

Prairie Energy Center.3

In connection with the MIPA, Hartree purchased buyer-side representations

* The most recent iteration of this case’s caption included the numerous former Insurer-
Defendants—North American Capacity Insurance Company, Aspen Specialty Insurance Company,
General Security Indemnity Company of Arizona, and Steadfast Insurance Company—and Euclid
Transactional, LLC. See generally Second Amended Complaint (“Compl.”) (D.I. 212). These
long-dismissed defendants were the primary-layer insurers and the underwriting representative.
Id., ¶¶ 1, 17; D.I. 170. Since-dismissed Liberty Surplus Insurance Corporation was the first-layer
excess insurer. Compl. ¶ 18; D.I. 330. For simplicity, the Court now uses just the names of the
two remaining parties.
1
Compl. ¶ 8.
2
Compl. ¶ 10; AIG provided the second excess layer of the buyer-side representations and
warranties insurance at issue here. Id., ¶¶ 17, 19.
3
AIG’s Mot. for Summ. J., Ex. D (D.I. 335) [hereinafter the “MIPA”].

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and warranties insurance policies from the Insurers.4 Euclid issued the primary

policy, which provided $25,000,000 in coverage in excess of a $6,375,000 retention.5

Liberty issued the first excess layer policy for $25,000,000 of coverage for Hartree’s

Loss in excess of its primary policy.6 And Hartree’s policy with AIG is its second

excess policy of $13,750,000.7 This means that AIG’s policy is only triggered if

Hartree’s losses are in excess of $56,375,000.8

After Hartree officially acquired the Pine Prairie Energy Center, it found

various issues.9 Hartree told its insurers that it may have “overpaid for the

acquisition of Pine Prairie” and that “Hartree’s Loss under the Policy will also

include the amount that [it] overpaid for the acquisition that is above the cost of

replacing the Base Gas.”10 When Hartree sought confirmation that its losses would

be covered, the Insurers denied coverage.11

4
See, e.g., AIG’s Mot. for Summ. J., Ex. F [hereinafter “Euclid Primary Policy”]; see also AIG’s
Mot. for Summ. J., Ex. H [hereinafter “AIG Second Excess Policy”].
5
See generally Euclid Primary Policy.
6
See AIG Second Excess Policy at 2 (referencing the Liberty policy).
7
AIG Second Excess Policy.
8
See AIG Second Excess Policy at 2; see also Mot. for Summ. J., at 7; Hartree’s Answering Br.,
at 25 (D.I. 337).
9
See generally Hartree’s Answering Br., Ex. A [hereinafter “Hartree’s May 3, 2022 Letter”].
10
Hartree’s May 3, 2022 Letter, at 4.
11
Hartree’s Answering Br., Ex. E, at 3 (“We reiterate our position that Hartree’s Loss does not
reach AIG Specialty’s layer.”) [hereinafter “AIG Coverage Emails”].

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C. THIS COVERAGE SUIT

This suit was brought against the insurers seeking coverage for those

purported losses. Hartree’s complaint now effectively has two remaining counts: a

request for declaratory judgment against AIG (Count I);12 and a breach-of-contract

claim against AIG (Count II).13

This action was stayed pending this Court’s decision in the underlying fraud

action Hartree brought against PAA.14 There, the Court found for Hartree in the

amount of $30,247,277.60—the loss incurred for the missing gas at the time of the

transfer of Pine Prairie.15

Now before the Court is Defendant AIG’s motion for summary judgment.16

1. Relevant Policy Language

AIG’s second excess insurance policy for loss is not triggered “unless and

until the aggregate limits of liability of the Underlying Insurance have been

exhausted and/or exceeded . . .”17

12
Compl. ¶¶ 72−78.
13
Compl. ¶¶ 79−85.
14
D.I. 32.
15
Hartree Nat. Gas Storage, LLC v. PAA Nat. Gas Storage, L.P., 2025 WL 101638, at *15 (Del.
Super. Ct. Jan. 15, 2025) [hereinafter “Hartree v. PAA”].
16
D.I. 335.
17
AIG Second Excess Policy at 6.

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Loss, as defined by the primary policy, is:

“Loss” means the aggregate of (i) any loss, liability, demand, claim of
any kind, action, cause of action, cost, damage, fee, deficiency, Tax,
penalty, fine, assessment, interest or expense (including the amount of
Damages that the Insureds have incurred, suffered, sustained, paid, or
become subject to), in each case, arising out of or resulting from any
Breach (other than Defense Costs and Prosecution Costs), (ii) any
Defense Costs, and (iii) any Prosecution Costs, in each case, determined
without regard or giving effect to, and ignoring any reference to, the
Limitation Provisions or the Materiality Qualifiers, as if such words,
clauses or phrases, as applicable, were deleted from the applicable
provision in the Acquisition Agreement or the Certificates.18

But “Loss” is reduced by any “Recovered Amount”:

Recovered Amounts. Loss shall be reduced by any Recovered
Amounts. For the avoidance of doubt, to the extent any Recovered
Amount is received or realized after payment by the Insurers hereunder,
such Recovered Amount shall be applied in the following order: first,
to reimburse the Insureds for any Loss borne by them in excess of the
Limit of Liability; second, to reduce any Loss incurred by the Insureds
which is covered by this Policy; and third, to reimburse the Insureds in
respect of any Loss which the Insureds have retained by reason of the
Retention.19

The primary policy also has a “mitigation” clause, which states:

To the extent required by applicable law, the Insureds shall use
commercially reasonable efforts within their control, including, to the
extent commercially reasonable, making requests or demands of third
parties, to mitigate any Loss or potential Loss after any Specified
Person has Actual Knowledge of any event which would reasonably be
expected to give rise to any Loss; provided that the failure of any

18
Euclid Primary Policy § II(Z).
19
Euclid Primary Policy § IV(C). “Recovered Amount” is defined as “in relation to any Loss,
the net amount (after any reasonable costs and expenses incurred in connection with such recovery)
of any related offsetting recoveries . . . that have been actually received by the Insureds[.]” Euclid
Primary Policy § II(KK).

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Insured to so mitigate shall only reduce the rights of the Insureds to
recover for Loss under this Policy to the extent of the Loss that would
have been avoided by such mitigation, and the burden of proving such
amount shall be on the Insurers and shall not otherwise diminish or
delay coverage or payment hereunder; provided further, that, except as
provided in Section VIII.B in connection with the subrogation rights of
the Insurers, the Insureds shall not be required or obligated to seek
recovery or recourse under the Acquisition Agreement or otherwise
from Seller or any of its direct or indirect equityholders or Affiliates or
any other person 20

Also, the policy sets subrogation rights:

[For] cases of Fraud by a Seller Party in connection with the Acquisition
Agreement and the transactions contemplated thereby . . . [i]n no event
(including, for the avoidance of doubt, prior to payment of Loss under
this Policy) shall the Insureds knowingly and intentionally waive any
rights [of the Insurer] in a manner that would reasonably be expected
to actually prejudice any such subrogation or assignment right.21

2. The Underlying Trial—Hartree v. PAA

During the underlying litigation, Hartree introduced two separate damages

calculations. The first—which was the only one ultimately presented to the jury and

the Court—claimed damages of about $55 million for the cost of replacing missing

gas.22 Under the second, Hartree claimed damages of $90 million for the amount

that it allegedly overpaid for the entire transaction based on a discounted cash flow.23

20
Euclid Primary Policy § VIII(A).
21
Euclid Primary Policy § VIII(B)(i).
22
See, e.g., AIG’s Mot. for Summ. J., Ex. C at 26 [hereinafter “May 13 Trial Tr.”].
23
May 13 Trial Tr. at 56.

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But that $90 million damages calculation was abandoned by Hartree during trial.24

At the conclusion of trial, the Court issued an opinion awarding Hartree

approximately $30 million—which was equivalent to the value of the missing gas at

the time of the sale along with certain other related expenses.25 Subsequently,

Hartree and PAA entered into a post-trial Settlement Agreement.26 The Settlement

Agreement states that “neither this Agreement nor any pleading, ruling, or finding

in the Lawsuit (including but not limited to the Verdict and the Decision) may be

taken or admissible in any future proceeding as an admission or finding of any

liability or wrongdoing.”27

II. PARTIES’ CONTENTIONS

AIG moves for summary judgment on the theory that the judgment in the $30

million “missing gas” litigation against PAA absolves it of any obligation to provide

coverage, because that $30 million figure falls well below where any trigger of its

coverage.28 At bottom, AIG contends that Hartree cannot litigate the PAA claim for

24
Id. at 56 (“And all I want to point out is that when we brought up $90 million, that that was
something that was still technically live in the case and we aren’t making up that number out of
whole cloth. And I want to point out he prepared an opinion and he’s no longer offering it. That’s
it.”).
25
Hartree v. PAA, 2025 WL 101638, at *15.
26
AIG’s Mot. for Summ. J., Ex. B [hereinafter “Settlement Agreement”]. Exhibit B refers to the
settlement agreement that was submitted in camera on April 2, 2025. See D.I. 331 (Letter
transmitting exhibit in paper form only for in camera review).
27
Settlement Agreement ¶ 5.
28
See generally AIG’s MSJ Opening Br. at 1 (D.I. 335).

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$30 million and then seek from its insurers additional amounts substantially

exceeding that figure.29 AIG grounds its motion in five procedural and substantive

doctrines—claim preclusion, judicial estoppel, quasi-estoppel, waiver, and law of

the case.30 In sum, AIG asks the Court to hold that Hartree is barred from asserting

that it is entitled to more than the $30 million it sought from PAA, and therefore the

claimed loss is insufficient to trigger coverage under the policy.

Hartree says that AIG is required to cover losses “without having to prove

fraud and without any requirement that Hartree pursue the Seller for such loss.”31

Put simply, Hartree insists that AIG contracted to pay Hartree for all of its losses

related to breach of MIPA representations and warranties regardless of whether it

pursued PAA for those losses.32 It says that “Loss” as defined in the coverage

agreements isn’t tied to the suit against PAA, so it isn’t limited by the Court’s ruling

or the damages it sought there.33

III. STANDARD OF REVIEW

Summary judgment is warranted if the pleadings, depositions, answers to

interrogatories, and admission on file, together with the affidavits show there is no

29
Id. at 20−34.
30
Id. at 23−34.
31
Hartree’s Answering Br. at 2.
32
Id. at 2−3.
33
Id. at 11−13.

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genuine issue as to any material fact and that the moving party is entitled to judgment

as a matter of law.34 The movant bears the initial burden of proving its motion is

supported by undisputed facts.35 If the movant meets its burden, the non-movant

must show there is a “genuine issue for trial.”36 To determine whether a genuine

issue exists, the Court construes the facts in the light most favorable to the non-

movant.37 Although summary judgment is encouraged when possible, there is no

“right” to summary judgment.38

The “Court may not be able to grant summary judgment if the factual record

has not been developed thoroughly enough to allow the Court to apply the law to the

factual record.”39 And the Court will not grant summary judgment if “it seems

desirable to inquire thoroughly into [the facts] to clarify the application of the law to

the circumstances.”40 But “[i]f the Court finds that no genuine issues of material

34
Del. Super. Ct. Civ. R. 56(c); Options Clearing Corp. v. U.S. Specialty Ins. Co., 2021 WL
5577251, at *7 (Del. Super. Ct. Nov. 30, 2021).
35
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979) (citing Ebersole v. Lowengrub, 180 A.2d
467, 470 (Del. 1962)).
36
Del. Super. Ct. Civ. R. 56(e); see also Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995) (“If
the facts permit reasonable persons to draw from them but one inference, the question is ripe for
summary judgment.”).
37
Judah v. Del. Tr. Co., 378 A.2d 624, 632 (Del. 1977) (citation omitted).
38
US Dominion, Inc. v. Fox News Network, LLC, 293 A.3d 1002, 1034 (Del. Super. Ct. 2023)
(quoting Telxon Corp. v. Meyerson, 802 A.2d 257, 262 (Del. 2002) (internal quotation marks and
citation omitted)).
39
Radulski v. Liberty Mutual Fire Ins. Co., 2020 WL 8676027, at *4 (Del. Super. Ct. Oct. 28,
2020) (cleaned up).
40
Ebersole v. Lowengrub, 180 A.2d 467, 468−69 (Del. 1962) (citation omitted).

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fact exists, and the moving party has demonstrated [its] entitlement to judgment as

a matter of law, then summary judgment is appropriate.”41

IV. DISCUSSION

The Court begins by considering AIG’s effort to use the prior Hartree v. PAA

opinion to bar Hartree’s pursuit of its $90 million damages theory in this action.

After reviewing AIG’s various preclusion-based theories, the Court concludes that

the earlier decision does not prevent Hartree from advancing that alternative

measure-of-damages theory here. The Court then turns to AIG’s arguments

grounded in the policy itself, including disputes over subrogation and mitigation.

Because the record reflects competing factual accounts and unresolved questions

regarding the parties’ conduct, intentions, and communications, the Court

determines that these issues cannot be resolved on summary judgment. As a result,

AIG is not entitled to judgment as a matter of law and its motion must be DENIED.

A. THE RESULT OF THE HARTREE V. PAA SUIT DOESN’T PRECLUDE
THIS REMAINING ACTION AGAINST AIG AND HARTREE’S
$90 MILLION DAMAGES THEORY.

The Court addresses AIG’s preclusion arguments in three parts. First,

collateral estoppel does not bar Hartree’s $90 million damages theory because the

41
Brooke v. Elihu-Evans, 1996 WL 659491, at *2 (Del. Aug. 23, 1996) (citing Oliver B. Cannon
& Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322 (Del. Super. Ct. 1973)); see also Jeffries v. Kent
Cty. Vocational Tech. Sch. Dist. Bd. of Educ., 743 A.2d 675, 677 (Del. Super. Ct. 1999) (“However,
a matter should be disposed of by summary judgment whenever an issue of law is involved and a
trial is unnecessary.” (citing State ex rel. Mitchell v. Wolcott, 83 A.2d 759, 761 (Del. 1951)).

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theory was never litigated, decided, or necessary to the judgment in Hartree v. PAA,

where Hartree had withdrawn it before or during trial. Second, neither judicial

estoppel nor quasi-estoppel applies, as the Court did not adopt or rely on Hartree’s

withdrawal, Hartree took no inconsistent position that induced a judicial ruling, and

Hartree gained no benefit that would make its current position unconscionable.

Third, AIG’s waiver and law-of-the-case theories fail because both doctrines operate

only within the same litigation and cannot carry over to a separate action with

different parties. Accordingly, none of the doctrines AIG attempts to invoke

preclude Hartree from pursuing its alternative $90 million damages claim in this

case.

1. Collateral Estoppel doesn’t bar the $90 Million calculation.

AIG argues that collateral estoppel bars Hartree’s claim expressing the notion

that the Court’s prior decision resolved the claim in AIG’s favor.42 But collateral

estoppel doesn’t bar Hartree’s $90 million damages theory because the theory was

never actually litigated or decided in the earlier Hartree v. PAA action, and the prior

judgment does not—and could not—resolve an issue the Court was never asked to

adjudicate.43 The doctrine of collateral estoppel, also known as issue preclusion,44

42
AIG’s MSJ Opening Br., at 3−5, 23−25. While AIG never directly argues collateral estoppel
by name, its cumulative preclusive theories essentially add up to it. So, for the sake of
completeness and the avoidance of doubt, the Court conducts this collateral estoppel analysis.
43
May 13 Trial Tr. at 56. See generally Hartree v. PAA, 2025 WL 101638.
44
Hernandez v. Baird Mandalas Brockstedt & Federico, LLC, 315 A.3d 1183, 1188 (Del. Super.
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is issue-specific; it precludes only those determinations that were squarely before

the Court, fully litigated, and necessary to the outcome of the first proceeding.45

“Further, . . . that party must have had a ‘full and fair opportunity to litigate the issue

in the prior action.’”46 “The party asserting collateral estoppel has the burden of

showing that the issue was already decided in the first proceeding.”47

AIG cannot shoulder its burden because the $90 million issue was never part

of the adjudicative basis of the prior judgment. No doubt the post-trial opinion in

Hartree v. PAA constitutes a final decision on the merits on the remaining claims and

defenses left there by then.48 But the opinion resolves only one question: whether

Hartree proved damages arising from missing gas-in-place.49 By the time of trial’s

end, Hartree had withdrawn its alternative $90 million loss-of-sale-value theory.50

Hartree expressly told the Court that the $90 million figure was no longer being

Ct. 2024), aff’d, 341 A.3d 473 (Del. 2025).
45
Arch Ins. Co. v. Murdock, 2018 WL 1129110, at *5 (Del. Super. Ct. Mar. 1, 2018) (“The
doctrine of collateral estoppel prohibits a party from relitigating a factual issue that was adjudicated
previously.”) (citation omitted); Proctor v. State, 2007 WL 2229013, at *1 (Del. Aug. 2, 2007)
(citing Sanders v. Malik, 711 A.2d 32, 33−34 (Del. 1998)) (“A claim will be collaterally estopped
only if the same issue was presented in both cases, the issue was litigated and decided in the first
case, and the determination was essential to the prior judgment.”).
46
Arch Ins. Co., 2018 WL 1129110, at *6 (citations omitted).
47
Troy Corp. v. Schoon, 959 A.2d 1130, 1134 (Del. Ch. 2008) (citations omitted).
48
See Troy Corp., 959 A.2d at 1134 (discussing a court’s prior ruling in a different action and
deeming that the ruling was a final adjudication on the merits).
49
See generally Hartree v. PAA, 2025 WL 101638.
50
May 13 Trial Tr. at 56.

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offered.51 And Hartree didn’t pursue the issue in argument, provide a damages

model, or seek findings related to that valuation. The only tried claim was the

narrower, physical-inventory-based missing-gas claim.52

The Court never reached—and, indeed, had no need or ability to reach—any

findings about the broader value impact of the deal as a whole. The opinion contains

no fact-finding on the alleged $90 million diminution, no credibility determinations

regarding overall valuation evidence, and no legal conclusions regarding alternative

measures of damages.53 That is the natural consequence of an issue not tried.

Accordingly, collateral estoppel doesn’t bar the $90 million damages theory. The

issue of the alleged $90 million loss from the overall deal hasn’t been “decided” and

was not “essential to the prior judgment.”54

2. Hartree’s choice to forgo the $90 Million calculation in the
Hartree v. PAA litigation is not inconsistent with its current claim
against AIG.

AIG next insists that Hartree’s $90 million damages theory should be barred

because Hartree did not pursue that theory in the Hartree v. PAA litigation.55 AIG

makes this argument incanting both judicial estoppel and quasi-estoppel. But neither

51
Id. Too, Hartree offered no expert testimony on the $90 million loss-of-sale-value issue during
trial and didn’t raise it at closing. Id.
52
See generally Hartree v. PAA, 2025 WL 101638.
53
See id.
54
Proctor, 2007 WL 2229013, at *1.
55
AIG’s MSJ Opening Br. at 31−33.

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fits.

Judicial estoppel applies only when a party previously took a position that a

court accepted as the basis for its ruling, and then later takes a position that is

irreconcilably inconsistent with that judicially-adopted position.56 “The party’s prior

position will be considered a ‘basis’ for the court’s ruling where (i) the prior position

‘contributed to the court’s decision’; (ii) the court ‘relied’ on the party’s prior

position; or (iii) the party’s newly inconsistent position ‘contradicts’ the court’s

ruling[.]”57 “[J]udicial estoppel is only appropriate where the party against whom it

is asserted has taken irreconcilably inconsistent positions.”58

That never happened here. The Hartree v. PAA Court did not adopt Hartree’s

withdrawal of the $90 million theory, did not rely on it, and made no findings about

it.59 The theory simply fell out of the case because Hartree did not pursue it. The

Court’s decision on the remaining damages theory does not create any inconsistency

with Hartree’s position now. At most, Hartree made a tactical narrowing of issues

56
Motors Liquidation Co. DIP Lenders Tr. v. Allstate Ins. Co., 2018 WL 3360976, at *4 (Del.
July 10, 2018) (quoting Motorola Inc. v. Amkor Tech, Inc., 958 A.2d 852, 859−60 (Del. 2008))
(“Judicial estoppel applies when a litigant’s position ‘contradicts another position that the litigant
previously took and that the Court was successfully induced to adopt in a judicial ruling.’”). This
includes when the court “accept[s]” the position “as a basis for its ruling.” Chandler v. Bayhealth
Med. Ctr., Inc., 2024 WL 4977010, at *11 (Del. Super. Ct. Dec. 4, 2024).
57
Chandler v. Bayhealth Med. Ctr., Inc., 2024 WL 4977010, at *11 (Del. Super. Ct. Dec. 4, 2024)
(quoting In re Rural/Metro Corp. Stockholders Litigation, 102 A.3d 205, 247 (Del. Ch. 2014)).
58
Id. at *12 (citation omitted).
59
See AIG Reply Br. at 16 (D.I. 339); see generally Hartree v. PAA, 2025 WL 101638.

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in a prior case against a different party, but litigation strategy is not an irreconcilable

inconsistency, and judicial estoppel does not transform abandoned arguments into

permanent waivers across lawsuits involving different adversaries.60

AIG’s quasi-estoppel theory fails for two independent reasons. First, nothing

about Hartree’s conduct in the PAA litigation rises to the level of unconscionability

required to invoke the doctrine.61

Under Delaware law, the doctrine of quasi-estoppel applies
“when it would be unconscionable to allow a person to maintain
a position inconsistent with one to which he acquiesced, or from
which he accepted a benefit. To constitute this sort of estoppel
the act of the party against whom the estoppel is sought must
have gained some advantage for himself or produced some
disadvantage to another.”62

AIG’s asserted “prejudice”—that it must now confront a damages theory Hartree

chose not to pursue against PAA—does not meet that standard. The prospect of

60
Although the mid-litigation change may be seen as contradictory to Hartree’s claims against
its insurers, it is not enough so to be deemed an “irreconcilably inconsistent position[]” nor in
anyway worthy of an engagement of judicial estoppel. See Chandler, 2024 WL 4977010, at *12;
id. at 11 (describing judicial estoppel: “Judicial estoppel is an extraordinary, discretionary, and
equitable remedy that acts to preclude a party from asserting a position inconsistent with a position
previously taken in the same or earlier legal proceeding . . . to protect the integrity of the judicial
proceedings.”) (cleaned up).
61
N. Data AG v. Riot Platforms, Inc., 2025 WL 1661855, at *16 (Del. Ch. June 2, 2025) (one
invoking quasi-estoppel must clear a “high bar to show unconscionability”); Pers. Decisions, Inc.
v Bus. Plan. Sys., Inc., 2008 WL 1932404, at *6 (Del. Ch. May 5, 2008), aff’d, 2009 WL 685163
(Del. Mar. 17, 2009); Ketler v. PFPA, LLC, 132 A.3d 746, 748 (Del. 2016) (“Unconscionability is
a concept that is used sparingly.”).
62
RBC Cap. Markets, LLC v. Jervis, 129 A.3d 816, 872−73 (Del. 2015) (quoting Bank of N.Y.
Mellon v. Commerzbank Capital Funding Trust II, 2011 WL 3360024, at *8 n.71 (Del. Ch. Aug.
4, 2011)).

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additional litigation expense or effort is not the kind of detriment that renders an

opponent’s position unconscionable.63 At most, Hartree’s earlier decision may

complicate matters for AIG, but it does not impose the type of unfair disadvantage

to AIG that quasi-estoppel is designed to prevent.64

Second, the doctrine also requires that the party now changing positions must

have previously accepted some “benefit” from its earlier stance.65 Hartree received

no such benefit. By withdrawing the $90 million theory during the PAA trial, Hartree

secured no ruling, gained no tactical advantage, and imposed no prejudice on any

party.

Ultimately, AIG’s estoppel arguments rest on a belief that once Hartree

abandoned its quest for $90 million loss-of-sale-value damages in the PAA action, it

was forever barred from asserting that theory of damages anywhere else. But that’s

not the law. Strategic decisions made in one case don’t become irrevocable waivers

in all future litigation involving different parties. Neither judicial estoppel nor quasi-

63
See N. Data AG, 2025 WL 1661855, at *16 (opponent’s claim wouldn’t be disallowed merely
because an invoking party is “forc[ed] . . . to undergo an expensive and time-consuming accounting
proceeding only to raise the issues anew in this litigation.”) (quotation omitted).
64
RBC Cap. Markets, 129 A.3d at 873 (stockholders’ change in position was not unconscionable
when it was a natural outcome of the settlement process); N. Data AG, 2025 WL 1661855, at *17
(discussing that it is not unconscionable when a party must “relitigate” issues already addressed).
65
N. Data AG, 2025 WL 1661855, at *16 (citing Pers. Decisions, 2008 WL 1932404, at *6)
(“The party invoking quasi-estoppel must show how it would be ‘unconscionable to allow a person
to maintain a position inconsistent with one to which he acquiesced, or from which he accepted a
benefit.’”).

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estoppel prevents Hartree from advancing its alternative damages theory here.

3. Hartree Did Not Waive Its Claim.

Third and similarly to the other two AIG preclusivity theories, AIG also argues

waiver and law-of-the-case theories. Under both theories AIG posits that because

the prior case touched similar facts, any tactical choice by Hartree or decision by a

Court must carry through in this subsequent litigation. But neither doctrine works

that way. AIG discusses the allegation of waiver in its briefing thusly:

Hartree had the opportunity to argue its alternative damages theory to
the jury and the Court in the Fraud Litigation but instead made a
conscious decision to drop its alternative damages theory during the
trial. Hartree’s desire to change course now should be rejected.66

But waiver, even when framed broadly, is fundamentally tied to the context in

which it occurs: A party can waive a right in a particular proceeding, but there is

nothing to suggest that waiver applies outside of the litigation where it occurred,

especially when there are different parties.67 AIG tries to repackage its waiver

theory by saying that the waiver carried over through the policy’s subrogation

clause.68 But that only shifts the analysis to what the contract might restrict—not

whether Hartree somehow carried a procedural waiver from one case into another.

66
AIG’s MSJ Opening Br. at 26 (citations omitted).
67
AIG attempts to rely on Julian v. E. States Const. Serv., Inc. to suggest that waiver can apply
to other litigation. AIG Reply Br. at 11. But in that case, the suit was bifurcated. Julian v. E.
States Const. Serv., Inc., 2009 WL 1211642, at *1 (Del. Ch. May 5, 2009). Not so here. The
parties in the two suits are not the same; this coverage claim is wholly separate, not one bifurcated.
68
AIG’s MSJ Opening Br. at 28−30.

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The same conceptual problem undermines AIG’s attempt to rely on the “law

of the case.”69 The “law of the case” is established when a specific legal principle

is applied to an issue presented when “the material facts have remained constant

throughout the subsequent course of the same litigation.”70 The rule doesn’t extend

outside of the litigation at issue; “[i]n more simplified terms, the law of the case

doctrine operates as a form of intra-litigation stare decisis.”71 The law of the case is

“generally held to be the law of that case and will not be disturbed by that court

unless compelling reason to do so appears.”72 The rule is meant to preserve

consistency within a single judicial proceeding—not to let a party lift an outcome

from one lawsuit and superimpose it onto a different one.73 The doctrine does not

69
Id. at 30−31.
70
T.V. Spano Bldg. Corp. v. Dep’t of Nat. Res. & Env’t Control, 1992 WL 1364297, at *1 (Del.
Super. Ct. Sept. 3, 1992), aff’d, 628 A.2d 53 (Del. 1993) (citing Frank G.W. v. Carol M.W., 457
A.2d 715 (Del. 1983); Kenton v. Kenton, 571 A.2d 778, 784 (Del. 1990)); Frederick-Conaway v.
Baird, 159 A.3d 285, 296 (Del. 2017) (“The law of the case is established when a specific legal
principle is applied to an issue presented by facts which remain constant throughout the subsequent
course of the same litigation. The doctrine, by its terms, contemplates one continuous action within
the same court system.”) (cleaned up).
71
Carlyle Inv. Mgmt. L.L.C. v. Moonmouth Co. S.A., 2015 WL 5278913, at *7 (Del. Ch. Sept. 10,
2015) (citations omitted).
72
May v. Bigmar, Inc., 838 A.2d 285, 288 n.8 (Del. Ch. 2003), aff’d, 2004 WL 1656965 (Del.
July 16, 2004) (quoting Odyssey Partners v. Fleming Co., 1998 WL 155543, at *1 (Del. Ch. Mar.
27, 1998)) (emphasis added).
73
Cf. Gannett Co. v. Kanaga, 750 A.2d 1174, 1181 (Del. 2000) (“the law of the case doctrine is
not inflexible in that, unlike res judicata, it is not an absolute bar to reconsideration of a prior
decision that is clearly wrong, produces an injustice or should be revisited because of changed
circumstances.”); see also May, 838 A.2d at 288 n.8 (“The court agrees and will not allow this
issue to be relitigated. The ‘law of the case’ doctrine requires that issues already decided by the
same court should be adopted without relitigation, and ‘once a matter has been addressed in a
procedurally appropriate way by a court, it is generally held to be the law of that case and will not
-17-
supply a shortcut for AIG to import the Court’s prior limited damages determination

in Hartree v. PAA into this case.

Viewed together, both arguments depend on treating the PAA trial as if it

established portable, binding determinations that Hartree must now live with. But

neither waiver nor the rule AIG invokes has that kind of reach. The doctrines may

be framed differently, but they run into the same obstacle: each requires a continuity

of litigation that simply does not exist here. Consequently, neither theory bars

Hartree’s alternative damages claim.

B. THERE ARE MATERIAL FACTUAL DISPUTES REGARDING APPLICABILITY AND
APPLICATION OF KEY POLICY TERMS.

At this stage, the record doesn’t permit resolution of the contested issues as a

matter of law. Summary judgment is proper only where the material facts are

undisputed; it is not a vehicle for the Court to decide whose version of events is more

credible.74 Yet on the questions of the actual damages Hartree may have suffered,

whether subrogation rights were waived or impaired, and whether Hartree undertook

the mitigation required by the policy, the parties present accounts that diverge in

be disturbed by that court unless compelling reason to do so appears.’”) (quoting Odyssey
Partners, 1998 WL 155543, at *1); see generally Hamilton v. State, 831 A.2d 881, 887−89 (Del.
2003) (“The law of the case doctrine is not intended to preserve error or injustice.”).
74
Laugelle v. Bell Helicopter Textron, Inc., 88 A.3d 110, 118 (Del. Super. Ct. 2014) (“The Court
should not grant summary judgment where, upon an examination of all the facts, it seems desirable
to inquire thoroughly into them in order to clarify the application of the law to the circumstances.”)
(cleaned up).

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ways that matter. The record itself—as well as the parties’ descriptions of AIG’s

communications, Hartree’s litigation decisions in the PAA trial, and the extent of any

mitigation efforts—differ sharply. And those differences bear directly on the

application of the policy provisions at issue.

Because these factual disputes remain unresolved—and because their

resolution turns on the intent of the parties, the significance of periods of silence,

and the credibility of witnesses—the Court cannot determine as a matter of law

whether the policy’s subrogation or mitigation provisions were satisfied or breached.

The Court therefore addresses each area of dispute below, mindful that these issues

ultimately must be resolved by a finder of fact.

1. There are material factual disputes regarding the application of the
subrogation clause.

At this stage, it’s unclear whether any party waived its subrogation rights.

Lumped in with AIG’s waiver argument is discussion of subrogation under the

insurance policy.75 Subrogation rights are defined as

[For] cases of Fraud by a Seller Party in connection with the
Acquisition Agreement and the transactions contemplated
thereby . . . [i]n no event (including, for the avoidance of doubt,
prior to payment of Loss under this Policy) shall the Insureds
knowingly and intentionally waive any rights [of the Insurer] in
a manner that would reasonably be expected to actually prejudice
any such subrogation or assignment right.76

75
AIG’s MSJ Opening Br., at 28−30.
76
Euclid Primary Policy § VIII(B)(i).

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and
Sections V through VIII of this Policy [VIII. MITIGATION;
SUBROGATION; REIMBURSEMENT; OTHER
INSURANCE] shall not relieve the Insurers of their obligations
under this Policy except to the extent to which the Insurers are
actually and materially prejudiced thereby.77

AIG claims that Hartree, by dropping the alternative damages theory, waived

AIG’s subrogation rights, which violated the primary policy and prejudiced AIG.78

In response, Hartree claims that AIG waived its own right to subrogation by

“repudiating coverage and denying all liability for Hartree’s losses for over three

years.”79

Both parties’ compliance with the subrogation provision is a genuine and

material dispute of fact. Hartree claims that AIG was silent for over nine months80

while AIG references its communication:

Hartree is free to act, or to settle with the Seller, in the Fraud
Litigation. What Hartree cannot do is impair AIG Specialty’s
subrogation rights without AIG Specialty’s consent. We disagree
with your position that there has been a waiver—particularly
where the amount of Hartree’s damages with respect to the AIG
Specialty excess policy currently is unclear. As you know,
Hartree has asserted in this litigation that the amount of damages
at issue is “not susceptible to a definitive number” at this time.81

77
Id. § XIV.
78
AIG’s MSJ Opening Br., at 28−30.
79
Hartree’s Answering Br., at 16 (internal citation and quotation omitted) (cleaned up).
80
Id. at 17.
81
AIG Reply Br., at 13 (quoting AIG Coverage Emails at 4).

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There is also material dispute as to whether Hartree “knowingly and

intentionally waive[d] any rights [of the Insurer] in a manner that would reasonably

be expected to actually prejudice.”82 While Hartree did drop the alternative damages

theory in the middle of trial against PAA, it is unclear as to why.83 AIG alleges that

Hartree’s motive was to gain an advantage in this case, 84 but that is a disputed factual

question that relies heavily on witness credibility. As such, it is proper for a jury to

determine if Hartree’s mid-trial change in strategy was “knowingly and

intentionally” done to disadvantage its insurers.85

2. There are material factual disputes regarding Hartree’s
mitigation efforts.

It is unknown to the Court at this time whether Hartree took proper mitigative

measures. The policy has a mitigation clause that states:

To the extent required by applicable law, the Insureds shall use
commercially reasonable efforts within their control, including,
to the extent commercially reasonable, making requests or
demands of third parties, to mitigate any Loss or potential Loss
after any Specified Person has Actual Knowledge of any event
which would reasonably be expected to give rise to any Loss;

82
See Euclid Primary Policy § VIII(B)(i).
83
See, e.g., May 13 Trial Tr. at 56.
84
AIG Reply Br., at 9, 19 (D.I. 339).
85
See Cercacor Laboratories, Inc. v. Metonom Health, Inc., 2025 WL 1180186, at *14 (Del.
Super. Ct. Apr. 23, 2025) (“[A]s well-understood, the Court, on summary judgment, cannot weigh
[ ] conflicting evidence or make credibility determinations.”); id. at 4 (“In determining whether a
material factual dispute exists, the Court ‘is not permitted to weigh the evidence or resolve conflicts
presented by the pretrial discovery.’”) (quoting Texlon Corp. v. Meyerson, 802 A.2d 257, 262 (Del.
2002)); see also Cuonzo v. Shore, 958 A.2d 840, 845 (Del. 2008) (“The jury weighs the credibility
of the witnesses in addition to weighing the evidence.”) (citation omitted).

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provided that the failure of any Insured to so mitigate shall only
reduce the rights of the Insureds to recover for Loss under this
Policy to the extent of the Loss that would have been avoided by
such mitigation, and the burden of proving such amount shall be
on the Insurers and shall not otherwise diminish or delay
coverage or payment hereunder; provided further, that, except as
provided in Section VIII.B in connection with the subrogation
rights of the Insurers, the Insureds shall not be required or
obligated to seek recovery or recourse under the Acquisition
Agreement or otherwise from Seller or any of its direct or
indirect equityholders or Affiliates or any other person 86

AIG says the Court’s PAA trial decision evidences that “the commercial

reasonableness of Hartree’s efforts regarding Replacement Gas Costs was

litigated.”87 True enough. But this doesn’t resolve the issue remaining here, because

the Court neither evaluated nor passed on any mitigation efforts regarding the

alleged overall overpayment for the Pine Prairie facility. That is undecided.

Accordingly, there are still material disputes of fact and summary judgment isn’t

appropriate.88

86
Euclid Primary Policy at § VIII(A) (emphasis added).
87
AIG Reply Br., at 2.
88
Radulski, 2020 WL 8676027, at *3 (“This Court cannot grant any party’s motion for summary
judgment under Delaware Superior Court Civil Rule 56 unless no genuine issue of material fact
exists and that party is entitled to judgment as a matter of law.”).

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V. CONCLUSION

For the foregoing reasons, Defendant AIG Specialty’s Motion for Summary

Judgment (D.I. 335) is DENIED.

IT IS SO ORDERED.

/s/ Paul R. Wallace
_______________________
Paul R. Wallace, Judge

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