Safeway Stores, Inc. v. National Union Fire Insurance Company of Pittsburgh

Safeway Inc. (“Safeway”) appeals and National Union Fire Insurance Company of Pittsburgh (“National Union”) cross-appeals from the district court’s judgment in this insurance coverage dispute over the settlement of several class actions against Safeway. Safeway contends that the district court erred by (i) holding that a large dividend paid out as part of the settlement was not a loss covered by Safeway’s insurance policy, (ii) allocating one-quarter of the settlement and defense costs to Safeway, (iii) dismissing Safeway’s other claims against National Union, and (iv) denying Safeway prejudgment interest. National Union argues that, for a number of reasons, all of Safeway’s claims should be barred.

For reasons explained below, we reverse the district court’s allocation of one-quarter of the settlement and defense costs to Safeway and its denial of prejudgment interest. In all other respects, the district court’s judgment is affirmed.

I.

FACTS & PROCEEDINGS BELOW

Safeway filed this suit against National Union seeking reimbursement under its directors and officers liability insurance policy (“D & 0 policy”) for the costs of defending against and settling five class-action…