Xebec Development Partners, Ltd. v. National Union Fire Insurance

Defendant National Union Fire Insurance Company of Pittsburgh, Pa., appeals from a judgment for more than $7 million obtained against it by plaintiff Xebec Development Partners, Ltd. (XDP) on claims assigned to XDP by insureds under a policy of directors and officers liability and corporate reimbursement insurance (the D&O policy) issued by National Union. XDP cross-appeals from the same judgment, asserting that the amount of its judgment was improperly limited.

The jury implicitly, and properly, found that National Union had breached the D&O policy. But the jury’s assessment of damages cannot stand; the judgment must be reversed and the matter remanded for further trial of the issue of damages for breach of contract. XDP is entitled to no recovery from National Union beyond such damages, together with prejudgment interest and costs (excluding attorney fees) ancillary to such damages, as may be fixed in further proceedings conducted in accordance with this opinion.

The D&O policy had been issued by National Union to Xebec Corporation (Xebec) and was applicable to claims made during the policy period. Subject to policy terms and conditions, the D&O policy provided for…