Selective Way Insurance Company v. House of Cheatham LLC - Motion Granted

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

SELECTIVE WAY INSURANCE ) COMPANY, SELECTIVE INSURANCE ) COMPANY OF AMERICA, AND ) SELECTIVE INSURANCE COMPANY ) OF THE SOUTHEAST, ) ) Plaintiffs, ) C.A. No.: N25C-05-212 EMD CCLD )

1. ) ) HOUSE OF CHEATHAM LLC, ) ) Defendant. ) Submitted: December 22, 20250F 1 Decided: March 27, 2026

Upon Defendant's Motion to Dismiss or to Stay Proceedings GRANTED.

Joelle E. Polesky, Esquire, Stradley Ronon Stevens & Young, LLP, Wilmington, Delaware; Shari L. Klevens, Esquire, Dentons US LLP, Atlanta, Georgia; Craig M. Giometti, Esquire, Dentons US LLP, Houston, Texas. Attorneys for Plaintiffs Selective Way Insurance Company,

Selective Insurance Company of America, and Selective Insurance Company of the Southeast.

Carla M. Jones, Esquire, Jesse L. Noa, Esquire, Potter Anderson & Corroon LLP, Wilmington, Delaware; Nicholas G. Hill, Esquire, Anthony P. Tatum, Esquire, McGuireWoods LLP, Atlanta, Georgia. Attorneys for Defendant House of Cheatham LLC.

DAVIS, P.J.

The Court has also considered the Letter, dated March 11, 2026, from Carla M. Jones, Esq., to the Honorable Eric 1 M.D avis ("Status Letter") (D.I. No. 29).

1. INTRODUCTION
   This is a declaratory judgment action assigned to the Complex Commercial Litigation Division of the Superior Court. On May 19, 2025, Selective Way Insurance Company ("SWIC"), Selective Insurance Company of America ("SICA"), and Selective Insurance Company of the Southeast ("SICSE") (collectively, the "Plaintiffs" or "Selective") commenced this action. Selective asserts three declaratory judgment claims against House of Cheatham, LLC (the "Defendant" or "HOC"). Selective seeks a declaration that: (i) Selective has no duty to defend or to indemnify HOC in connection with certain underlying lawsuits; (ii) HOC has an obligation to indemnify Selective's insured, HOC Incorporated ("HOC Inc."), in connection with the underlying lawsuits; and (iii) if HOC is entitled to coverage under the applicable policies, the policies' contractual liability exclusion precludes coverage for HOC's indemnity obligations under the Asset Purchase Agreement ("APA"). Presently before the Court is the Defendant's Motion to Dismiss or, in the Alternative, to Stay the Proceedings (the "Motion"), which was filed on July 30, 2025. Selective filed its opposition brief on September 16, 2025. HOC filed its reply brief on October 6, 2025. The Court heard oral argument on the Motion on December 22, 2025. At the conclusion of the hearing, the Court took the Motion under advisement. For the reasons stated below, the Motion is GRANTED, and this action is DISMISSED.

2. BACKGROUND

3. THE PARTIES

4. Plaintiffs
   SWIC is a New Jersey corporation with its principal place of business in New Jersey.1F 2 SICA is also a New Jersey corporation with its principal place of business in New Jersey.2F 3 SICSE is an Indiana corporation with its principal place of business in New Jersey.3F 4

5. Defendant
   HOC is a Delaware limited liability company.4F HOC acquired all the assets and 5 liabilities of HOC, Inc. through the APA in 2011.5F 6

6. NATURE OF THE DISPUTE

7. The Selective Policies
   In 2009, HOC purchased commercial general liability coverage from Selective for successive one-year policy periods running from December 1, 2009, through December 1, 2022 (the "Selective Policies").6F The Selective Policies each provided for indemnity coverage in the 7 amount of $1,000,000 per occurrence and $2,000,000 in the aggregate.7F 8

8. The Insuring Agreement
   The Selective Policies contain the following Insuring Agreement: [Selective] will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. [Selective] will have the right and duty to defend the insured against any "suit" seeking those damages. However, [Selective] will have no duty

Complaint for Declaratory Relief ("Compl.") (D.I. No. 1) ¶ 10. 2 Id. ¶ 11. 3 Id. ¶ 12. 4 Id. ¶ 13. 5 Id. ¶ 28. 6 See id. ¶ 16. 7 Id. ¶ 17. 8

to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply . . .8F 9 The Selective Policies, in relevant part, define an "insured" as [a]n organization [designated in the Declaration] other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are insureds, but only with respect to their liability as stockholders.9F 10 The Selective Policies further state that "[t]hroughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy."10F 11

1. Transfer of Rights and Duties
   The Selective Policies provide a pertinent transfer of rights and duties provision, which is applicable to all types of coverage contained in the Selective Policies.11F Namely, the Selective 12 Policies provide that "[y]our rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured."12F 13

2. Contractual Liability Exclusion
   The Selective Policies each contain a "Contractual Liability Exclusion."13F The 14 "Contractual Liability Exclusion" states: "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the

Id. ¶ 18. 9 Id. ¶ 19. 10 Id. 11 Id. ¶ 20. 12 Id. 13 Id. ¶ 21. 14

contract or agreement. Solely for the purposes of 7 liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided: (a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged.1 F 15 An "Insured Contract" is defined under the Selective Policies as: [t]hat part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.1 5F 16

1. Umbrella Coverage
   The Selective Policies issued for the policy periods between December 1, 2009, through December 1, 2013 (the "2009 - 2013 Selective Policies"), also included commercial umbrella liability coverage ("Umbrella Coverage").16F The 2009 - 2013 Selective Policies provided for 17 Umbrella Coverage in the amount of $4,000,000 for each occurrence and in the aggregate, in excess of the underlying coverage provided by the Selective Policies, where applicable.17F 18

2. Umbrella Coverage Insuring Agreement
   The Umbrella Coverage contains the following Insuring Agreement: [Selective] will pay on behalf of the insured, the "ultimate net loss" in excess of the "retained limit" that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies. [Selective] will have the right and duty to defend the insured against any "suit" seeking those damages when the "underlying insurance" does not provide coverage or the limits of "underlying insurance" have

Id. 15 Id. ¶ 22. 16 Id. ¶ 23. 17 Id. 18

been exhausted. When [Selective] have no duty to defend, [Selective] will have the right to defend, or to participate in the defense of, the insured against any other "suit" seeking damages to which this insurance may apply. However, [Selective] will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage" or "personal and advertising injury" to which this insurance does not apply.18F 19 The Umbrella Coverage further defines "insured" as [a]n organization [designated in the Declaration] other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are insureds, but only with respect to their liability as stockholders.19F 20

1. Umbrella Coverage Contractual Liability Exclusion
   The Umbrella Coverage also contains a "Contractual Liability Exclusion."20F The 21 Umbrella Coverage "Contractual Liability Exclusion" provides that the Umbrella Coverage does not apply to "[a]ny obligation or liability assumed by the insured under any contract or agreement."21F However, the Umbrella Coverage "Contractual Liability Exclusion" further states 22 that "[t]his exclusion does not apply to the extent that coverage is provided for the insured by 'underlying insurance.'"22F 23

2. The APA
   On December 21, 2021, HOC and HOC Inc. executed the APA.23F Under the APA, HOC 24 Inc. transferred its assets and liabilities to HOC.24F Among other items, the APA transferred the 25 "rights to control [HOC Inc.'s] insurance policies and rights to the benefits of such policies, including rights and proceeds arising from or relating to the Acquired Assets" to HOC.25F 26

Id. ¶ 25. 19 Id. ¶ 26. 20 Id. ¶ 27. 21 Id. 22 Id. 23 Id. ¶ 28. 24 Id. 25 Id. ¶ 29. 26

HOC Inc. allegedly did not seek written consent from Selective for the assignment of rights prior to executing the APA.26F Following the execution of the APA, HOC Inc. also 27 purportedly failed to notify Selective of the purported assignment of rights under the APA.27F 28 HOC also agreed to "assume, satisfy, perform, fulfill, and discharge in full all of the Assumed Liabilities" pursuant to the APA.28F Under the APA, "Assumed Liabilities" was 29 defined to include, in relevant part, "all Liabilities of [HOC Inc.] arising out of the conduct or operation of the Business by [HOC Inc.] or its Affiliates prior to the Closing or the ownership or use of the Acquired Assets to the extent arising out of events, transactions or circumstances prior to the Closing."29F 30

1. The Hair Relaxer Litigation Beginning in 2022, numerous persons filed lawsuits in federal court against HOC Inc. and/or HOC,30F in which these persons allege that HOC Inc.'s and HOC's products contained 31 carcinogens that caused cancer.31F On February 6, 2023, the underlying federal lawsuits were 32 consolidated in the United States District Court for the Northern District of Illinois.32F This 33 multidistrict litigation is captioned In re: Hair Relaxer Marketing Sales Practices and Products

Liability Litigation (the "Hair Relaxer Litigation").33F 34

Id. ¶ 31. 27 Id. ¶ 30. 28 Id. ¶ 34. 29 Id. ¶ 35. 30 HOC Inc. and HOC are manufacturers of hair products. 31 Compl. ¶ 39. 32 Id. ¶ 40. 33 Id. 34

1. Notice of the Underlying Federal Lawsuits to Selective Following the commencement of the federal lawsuits, HOC provided Selective with notice of a lawsuit that was consolidated as part of the Hair Relaxer Litigation.34F Selective 35 agreed to defend HOC Inc. in connection with the Hair Relaxer Litigation.35F 36 Additionally, HOC sought coverage for the Hair Relaxer Litigation under the Selective Policies on the basis that the APA assigned HOC Inc.'s rights under the Selective Policies to HOC.36F Selective denied coverage, claiming that HOC is not an insured under the Selective 37 Policies and that any purported assignment was ineffective.37F 38 On January 29, 2024, Selective sent HOC a request for information stating that Selective was "continuing to investigate and evaluate the claims presented."38F Selective did this 39 notwithstanding its position that Selective was not obligated to provide coverage under the Selective Policies to HOC.39F 40 On March 20, 2024, Selective changed its position regarding coverage claiming that the indemnification provisions of the APA required HOC to defend HOC Inc. in connection with the Hair Relaxer Litigation primary to Selective's duty to defend HOC Inc. under the Selective Policies.40F Moreover, Selective claimed that they were entitled to indemnification under the 41 APA.41F As part of this communication, Selective requested confirmation within ten days that 42 HOC agreed to indemnify, defend, and hold HOC Inc. harmless from the claims, causes of

Id. ¶ 43. 35 Id. 36 Id. ¶ 44. 37 Id. ¶ 45. 38 Defendant's Motion to Dismiss Plaintiffs' Complaint or to Stay Proceedings ("Def. Mot.") (D.I. No. 15) at 7, Ex. 39 B ¶ 131. Id. 40 See Compl. ¶ 46. 41 Id. 42

action, and damages sought in the Hair Relaxer Litigation.42F HOC failed to respond to the 43 March 20, 2024, communication within ten days.43F 44

1. THE UNDERLYING LAWSUITS
2. The Federal Action On June 26, 2024, Selective filed a complaint for declaratory relief against HOC in the United States District Court for the Northern District of Georgia (the "Federal Court") in an action captioned Selective Way Insurance Company v. House of Cheatham LLC (the "Federal Action").44F Aside from differences in formatting and jurisdictional allegations, Selective's 45 complaint in the Federal Action is substantively identical to the complaint filed in this action.45F 46 The parties began litigating the Federal Action. On August 16, 2024, HOC filed its answer and asserted counterclaims against Selective and several other insurers.46 F On December 47 3, 2024, HOC asserted amended counterclaims to add additional insurers as parties.4 F In early 48 2025, the parties entered a joint discovery plan, made their initial Rule 26 disclosures, and the Federal Court entered a scheduling order.48F 49 On March 4, 2025, the Federal Court undertook a jurisdiction inquiry, requesting further disclosures concerning each party's citizenship.49F As a result, the parties determined that there 50 was no diversity of citizenship between HOC and Selective.50F HOC asked for consent to file a 51 joint motion to dismiss without prejudice for lack of jurisdiction.51F 52

Id. ¶ 47. 43 Id. ¶ 48. 44 Def. Mot. at 8. 45 Id. 46 Id. at 9. 47 Id. 48 Id. 49 Id. at 9-10. 50 Id. at 10. 51 Id. 52

In April 2025, HOC suggested refiling the action in Georgia state court, which would have jurisdiction over all the parties.52F However, the parties were unable to reach an 53 agreement.5 3F 54 On May 7, 2025, HOC notified the Federal Court regarding the lack of jurisdiction and that HOC had sought (and failed to acquire) consent to file a voluntary dismissal.54F On May 14, 55 2025, Selective and the other insurers involved in the Federal Action filed a response to inform the Federal Court that they would "work with HOC…" regarding the proposed voluntary dismissal.5F 56 On July 24, 2025, HOC, Selective, and the other insurers in the Federal Action filed a voluntary dismissal without prejudice.56F On July 25, 2025, the Federal Court entered an order 57 dismissing the Federal Action without prejudice.57F 58

1. The Georgia State Action On July 28, 2025, HOC filed a complaint (the "Georgia State Action" and, collectively with the Federal Action, the "Georgia Litigation") in the Superior Court of Georgia (the "Georgia Court"). HOC asserted substantively the same claims as those set forth in the amended counterclaims in the Federal Action.58F Specifically, HOC asserted claims against Selective 59 relating to Selective's refusal to: (i) provide a complete defense to HOC; and (ii) fully pay HOC's costs incurred in the Hair Relaxer Litigation.59F 60

Id. 53 Id. 54 Id. 55 Id. 56 Id. at 11. 57 Id. 58 Id. 59 Id. at 11-12. 60

The Georgia State Action includes more parties than in this action.60F Several defendants 61 have answered HOC's complaint. Moreover, certain defendants have filed motions for judgment on the pleadings.61F Those motions are either fully briefed or are almost completely briefed.62F 62 63 The Georgia Court scheduled a joint hearing on all the motions for April 20, 2026.63F 64

1. PROCEDURAL POSTURE
   On May 19, 2025, Selective commenced this action asserting three declaratory judgment claims against HOC. Selective seeks a judgment declaring that (i) they have no duty to defend or to indemnify HOC in connection with underlying lawsuits; (ii) HOC has an obligation to indemnify HOC Inc. in connection with the Hair Relaxer Litigation; and (iii) if HOC is entitled to coverage under the Selective Policies, the Selective Policies' contractual liability exclusion precludes coverage for HOC's indemnity obligations under the APA. Presently before the Court is the Motion, which was filed on July 30, 2025. Selective filed their opposition brief on September 16, 2025. HOC filed its reply brief on October 6, 2025. The Court heard oral arguments on the Motion on December 22, 2025. The Court then took the Motion under advisement.

2. PARTIES' CONTENTIONS

3. THE MOTION
   HOC argues that the Court should dismiss or, in the alternative, stay the instant action for several reasons. HOC asserts that the Court lacks subject matter jurisdiction as Selective effectively requests specific performance.64F HOC further contends that, with respect to Count II, 65

Status Letter at 1-2. 61 Id. 62 Id. at 2. 63 Id. 64 Def. Mot. at 13. 65

Selective lacks standing to enforce the APA.65F HOC also maintains that the Court should 66 dismiss or stay this action under Delaware's forum non conveniens doctrine.66F HOC states that 67 the action should be dismissed or stayed pursuant to either McWane67 F or Delaware's 68 "traditional" forum non conveniens factors.68F Finally, HOC argues that the declaratory judgment 69 action is overripe.69F 70

1. PLAINTIFFS' OPPOSITION
   Selective opposes the Motion, contending that Selective does not seek, nor has it pled a claim for, specific performance.70 F Selective further maintains that it has standing to enforce the 71 APA as a subrogee of HOC Inc.71F Selective next argues that the Court should not dismiss or 72 stay this action pursuant to Delaware's forum non conveniens doctrine.72F Selective contends that 73 the Cryo-Maid test applies and not McWane.73F Moreover, Selective reasons that the Cryo-Maid 74 factors favor Selective.74F Finally, Selective contends that their declaratory judgment claims are 75 not overripe.75F 76

2. STANDARD OF REVIEW
   Upon a motion to dismiss under Rule 12(b)(6), the Court (i) accepts all well-pleaded factual allegations as true, (ii) accepts even vague allegations as well-pleaded if they give the opposing party notice of the claim, (iii) draws all reasonable inferences in favor of the non-

Id. at 14. 66 Id. at 16. 67 Id. at 17. 68 Id. at 24. 69 Id. at 31. 70 Plaintiffs' Response in Opposition to Motion to Dismiss Complaint or to Stay Proceedings ("Pl. Opp'n") (D.I. No. 71

1. at 13. Id. at 15. 72 Id. at 18. 73 See id. at 19. 74 Id. at 22. 75 Id. at 28. 76

moving party, and (iv) only dismisses a case where the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances.76F However, the court must "ignore 77 conclusory allegations that lack specific supporting factual allegations."77F 78

1. DISCUSSION
2. THE COURT HAS SUBJECT MATTER JURISDICTION OVER SELECTIVE'S DECLARATORY . JUDGMENT CLAIMS

In Delaware, the Court of Chancery has subject matter jurisdiction over equitable claims, whereas the Superior Court has subject matter jurisdiction over legal claims.78F "Specific 79 performance 'is a purely equitable remedy'" under which the Court of Chancery has subject matter jurisdiction.79F Contrarily, declaratory judgments are "creatures of statute[s]" and are not 80 considered a "purely equitable remedy."80F Accordingly, the Superior Court may exercise subject 81 matter jurisdiction over declaratory judgment claims.81F 82 HOC asserts that the Court lacks subject matter jurisdiction as Selective effectively requests specific performance.82 F In support, HOC cites case law standing for the proposition 83 that "Delaware courts look beyond the mere form to the substance of the pleadings when determining subject matter jurisdiction[.]"83F 84

See Central Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 227 A.3d 531, 536 (Del. 2011); Doe v. 77

Cedars Academy, No. 09C-09-136, 2010 WL 5825343, at *3 (Del. Super. Oct. 27, 2010).

Ramunno v. Crawley, 705 A.2d 1029, 1034 (Del. 1998). 78 See Clark v. Teeven Holding Co., Inc. 625 A.2d 869, 875 (Del. Ch. Dec. 16, 1992). 79 26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd., 309 A.3d 434, 471 (Del. Ch. Sept. 7, 2023) (citing Chavin 80

1. H.H. Rosin & Co., 246 A.2d 921, 922 (Del. 1968)). Kraft v. WisdomTree Investments, Inc., 145 A.3d 969, 985 (Del. Ch. Aug. 3, 2016). 81 See Burris v. Cross, 583 A.2d 1364, 1372 (Del. Super. Sept. 27, 1990). 82 Def. Mot. at 13. 83 Id.; see also Cartanza v. Cartanza, 2012 WL 1415486, at *4 (Del. Super. Apr. 16, 2012). 84

Selective argues that they do not seek, nor have they pled, an action for specific performance.84F Instead, Selective maintains that they have asserted valid declaratory judgment 85 claims over which the Court has subject matter jurisdiction.85F 86 In Alcoa World Alumina LLC v. Glencore Ltd., the Court granted declaratory relief in a case where the "gravamen of [the] action [was] whether Alcoa ha[d] to indemnify Glencore under an agreement with respect to liability that may arise with [a separate action]."86F 87

Alcoa is on point. As in Alcoa, Selective seeks judicial determinations as to the parties'

defense and indemnity rights and obligations under the APA and Selective Policies. While such a determination would obligate HOC to act, Selective is not seeking a court order compelling HOC to take any sort of action. Equitable relief would be needed only if the Court were to grant Selective's requested relief and HOC refused to act in compliance with the Court's determination.87F Then, Selective would need to initiate a specific performance action in the 88 Court of Chancery. Accordingly, the Court finds that it has subject matter jurisdiction over Selective's declaratory judgment claims.

1. SELECTIVE HAS STANDING TO ENFORCE THE APA. "As a general rule, only parties to a contract and intended third-party beneficiaries may enforce an agreement's provisions."88F Delaware courts routinely dismiss contractual claims for 89 lack of standing where the plaintiff is not a party to the applicable contract.89F However, 90

Pl. Opp'n at 13. 85 See id. at 15. 86 Alcoa World Alumina LLC v. Glencore Ltd., 2016 WL 521193, at *7 (Del. Super. Feb. 8, 2016). 87 See Graciano v. Adobe Healthcare, Inc., 2024 WL 960946, at *6 (Del. Ch. Nov. 29, 2023) (finding that the 88 plaintiff had an adequate remedy at law in the form of a declaratory judgment from the Superior Court, and noting that specific performance would only be necessary if there was a refusal or failure to act in accordance with the Final Order). Bako Pathology LP v. Bakotic, 288 A.3d 252, 271 (Del. 2022). 89 See Maglione v. BCBSE, Inc., 2003 WL 22853421, at *3 (Del. Super. July 29, 2003). 90

notwithstanding the fact that an individual or entity is not a party to the contract or an intended third party beneficiary thereto, a subrogee to the contract may nonetheless have standing to enforce the contract's provisions.90F Subrogation allows an individual or entity "to stand in the 91 shoes of another and assert that [party's] rights against a third party."91F 92 HOC argues that Selective cannot seek relief under the APA.9 F Specifically, HOC 93 contends that Selective lacks standing as Selective is not a party to the APA nor are they an intended third-party beneficiary to the APA.93F Selective maintains that, although not a party or 94 third-party beneficiary to the APA, Selective has standing to enforce the APA as a subrogee of HOC Inc.94F 95 The Court does not read Selective's cause of action as one that attempts to enforce the provisions of the APA as a party to or third-party beneficiary to the APA. In the Complaint, Selective alleges that "Selective has agreed to defend HOC Inc. in connection with the [Hair Relaxer Litigation] and, as HOC Inc.'s insurer, Selective is subrogated to HOC Inc.'s right to defense and indemnification from [HOC] in connection with the [Hair Relaxer Litigation]."95F 96 As such, Selective contends that, as the subrogee of HOC, Inc., the APA controls as to whether Selective has standing to enforce the APA's indemnification provisions. The Court finds, at this stage of the proceedings, that Selective has standing to enforce the provisions of the APA solely as a subrogee of HOC Inc. In accordance with the terms of the

See Rodriguez v. Great Am. Ins. Co., 2022 WL 591762, at *7 (Del. Super. Feb. 23, 2022) (explaining that 91 "subrogation allows a third-party to replace one of the parties to a contract and then assume the rights of that contracting party to sue the counterparty."). 73 Am. Jur. 2d Subrogation § 1. 92 Def. Mot. at 14. 93 Id. at 15. 94 Pl. Opp'n at 15. 95 Compl. ¶ 66. 96

Selective Policies, Selective is subrogated to HOC Inc.'s right to defense and indemnification under the APA from HOC. The Selective Policies state: [i]f the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to [Selective]. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to [Selective] and help [Selective] enforce them.96 F 97 The language of the Selective Policies arguably allows Selective to enforce HOC Inc.'s rights under the APA if HOC Inc. has a right to recover as against HOC. Therefore, Selective's second count for indemnification from HOC is a valid claim as Selective is "standing in the shoes" of HOC Inc. and asserting HOC Inc.'s rights under the APA against HOC. Accordingly, because Selective may enforce the APA as a subrogee of HOC Inc., the Court finds that Selective has standing with respect to Count II.

1. THE INSTANT ACTION IS DISMISSED PURSUANT TO MCWANE .

2. McWane applies as the Georgia State Action is considered first-filed.
   To determine the applicable forum non conveniens standard, Delaware courts inquire as to the pendency or non-pendency of a similar action in another jurisdiction.97F "[W]hen the 98 Delaware case is the first filed between the parties, the Court applies the Cryo-Maid test…."98F 99 "[W]hen there is a prior pending case in another jurisdiction between the same parties involving the same issues, the Court applies the McWane test…."99F Finally, if "prior litigation between 100 the parties has been dismissed and there is no other prior pending litigation between the parties, the Court applies the Gramercy test…."100F 101

Pl. Opp'n at 17; see also Compl. ¶¶ 8, 46, 66. 97 See Cresa Global Inc. v. Chirisa Capital Management (US) LLC, 2025 WL 53168, at *2 (Del. Super. Jan. 9, 98 2025). Id. 99 Id. 100 Id. 101

However, the Court does not make a determination as to which action was first-filed "mechanically or using a bright-line test."101F "Rather, [the] Court's complementary objectives 102 of discouraging both forum shopping and contrived races to the courthouse require a more nuanced analysis."102F As such, a determination as to which action is first-filed is "determined by 103 reference to the underlying procedural facts."103F 104 HOC argues that the McWane test applies as the Georgia State Action is a pending first filed action.104F In support, HOC cites to several Delaware cases that purportedly stand for the 105 proposition that the Georgia State Action relates back to the date that the Federal Action was filed.105F Importantly, HOC relies upon United Phosphorus, Ltd. v. Mirco-Flo. 106 Selective asserts that the Cryo-Maid test applies as this action was filed before the Georgia State Action.106F Selective contends that HOC's relation back argument is improper and, 107 nonetheless, bolsters Selective's argument that this action is first filed.1 7F 108 The timeline of the relevant filings is as follows: (i) the Federal Action was filed on June 26, 2024;108F (ii) HOC filed an answer and counterclaims in the Federal Action; (ii) the instant 109 action was filed on May 19, 2025;109F and (iii) the Georgia State Action was filed on July 28, 110 2025.110F Thus, as a technical matter, the instant action was filed prior to the commencement of 111 the Georgia State Action. However, the analysis does not end there.

Rapoport v. Litigation Trust of MDIP Inc., 2005 WL 3277911, at *2 (Del. Ch. Nov. 23, 2005). 102 Id. 103 Id. 104 Def. Mot. at 19. 105 See id. at 19-20. 106 Pl. Opp'n at 19. 107 See id. at 20-21. 108 Def. Mot. at 8. 109 See generally Compl. 110 Def. Mot. at 11. 111

In United Phosphorus, the Delaware Supreme Court reversed the Superior Court's dismissal in favor of previously filed litigation in Georgia.111F There, United Phosphorus ("UP") 112 had filed an action against Micro-Flo in Delaware federal court (the "Delaware Federal Action").112F While the Delaware Federal Action was pending, Micro-Flo filed an action in 113 Georgia (the "Georgia Action") and sought to transfer the Delaware action to Georgia.113F 114 Following the dismissal of the Delaware Federal Action, UP refiled its claims in Delaware Superior Court (the "Superior Court Action").114F 115 In reversing the dismissal of the Superior Court Action in favor of the Georgia Action, the Supreme Court found that the third-filed Superior Court Action related back to the date the Delaware Federal Action was filed.115F The Supreme Court reasoned that, for forum non 116

conveniens purposes, the two "salient facts" were that "(i) UP did not voluntarily abandon its

first choice of forum, and (ii) when forced to refile in State court, UP repeated the exact same state law claims as it raised in its original federal complaint."116F The court further explained that 117 a finding to the contrary "would defeat the purposes of our forum non conveniens rules if [the Court] were to protect Micro-Flo's choice of forum instead of UP's.117F 118 Delaware courts have recognized that United Phosphorus is inapplicable where "the plaintiff in a federal action refiles the state law claims in a state court of a state other than where the federal court is located."118F That is what occurred in this case. Specifically, Selective 119 initially filed its declaratory judgment claims in Georgia federal court. After its realization that

See United Phosphorus, Ltd. v. Micro-Flo, 808 A.2d 761, 765 (Del. 2002). 112 Id. at 763. 113 See id. 114 See id. 115 See id. at 764-65. 116 Id. at 765. 117 Id. 118 Rapoport, 2005 WL 3277911, at *3. 119

the claims would be dismissed in Georgia federal court for lack of jurisdiction, Selective filed nearly identical claims in this Court. Accordingly, United Phosphorus is factually different from this case. However, the unique circumstances here mean the analysis cannot end by applying

United Phosphorus.

Notwithstanding, the Court finds that the Georgia State Action was first-filed for purposes of determining the applicable forum non-conveniens doctrine. An inquiry into the underlying procedural facts indicates that Selective engaged in forum-shopping and a contrived race to the courthouse. Selective filed the Federal Action. HOC did not just answer Selective's complaint. HOC also sought affirmative relief through counterclaims…i.e., HOC became a counterclaim plaintiff. In March 2025, the Georgia federal court undertook a jurisdictional inquiry in the Federal Action which led to the determination that the court lacked jurisdiction.119F Over the course of the next 120 several months, the parties attempted to negotiate the voluntary dismissal of the Federal Action.120F As part of the negotiations, HOC proposed that Selective refile its claims in Georgia 121 state court.12 F On May 7, 2025, after initially refusing to consent to the voluntary dismissal, 122 Selective informed the Georgia federal court that they would "work with HOC…" regarding the proposed voluntary dismissal.122F Shortly thereafter, Selective seemingly "blindsided" HOC by 123 racing to Delaware to file the instant action. Selective attempts to explain its decision to refile in Delaware stating that they could not have refiled its declaratory judgment claims in Georgia state court after denying coverage and

Def. Mot. at 9-10. 120 See id. at 10. 121 Id. 122 Id. 123

voluntarily dismissing the Federal Action.123F Thus, there is only one other plausible reason for 124 Selective's decision to unilaterally abandon its initial choice of forum in Georgia - Selective believed that litigating in Delaware would result in a more favorable outcome. The filing of the instant action was seemingly a tactical maneuver designed to confer first-filed status upon Selective. However, "[t]he Court will neither reward the winner of a race to the courthouse nor the manipulator of the litigation process by affording them first-filed status and imposing the accompanying heavy burden on the opposing party to defeat their choice of forum."124F 125 Moreover, the Court cannot ignore the fact that HOC joined and began litigating the Federal Action. HOC filed an answer. HOC became a counterclaim plaintiff in the Federal Action. As such, HOC is more like a plaintiff that did not voluntarily abandon its forum in Georgia. Therefore, while a basic temporal analysis indicates that this action is first-filed, a nuanced inquiry into the underlying procedural facts demonstrates that the Georgia State Action should be considered first-filed for purposes of determining the applicable forum non conveniens doctrine. Accordingly, the Court finds that the McWane test applies.

1. McWane Analysis "Delaware courts considering a motion to stay or dismiss in favor of a previously filed action have applied [the McWane] three factor test: (i) is there a prior action pending elsewhere; (ii) in a court capable of doing prompt and complete justice; (iii) involving the same parties and

See Pl. Opp'n at 29-30. Selective relies on Drawdy v. Direct General Ins. Co., 586 S.E.2d 228 (Ga. 2003). The 124 reasoning in Drawdy supports Selective's argument; however, Selective had alternatives. First, as recognized in

Drawdy, Selective could have simply defended HOC under a reservation of rights and then pursued a declaratory

judgment action in Georgia. Id. at 230-31. Second, Selective could have worked with HOC to file an action in Georgia with HOC as the plaintiff and Selective as the defendant. This is what HOC suggested to Selective prior to Selective filing this action. Moreover, that is exactly what has happened with the Georgia State Action. Rapoport, 2005 WL 3277911, at *4. 125

the same issues."12 5F "If all three criteria are met, 'McWane and its progeny establish a strong 126 preference for the litigation of a dispute in the forum in which the first action' was filed."126F 127

1. The Georgia State Action is a pending first-filed action.
   The Georgia State Action is currently pending in Georgia state court. For the same reasons set forth above, the Court finds that the Georgia State Action must be considered first- filed. Accordingly, the first McWane prong is met.

2. Georgia state court is capable of doing prompt and complete justice.
   HOC argues that Georgia state court satisfies the second McWane prong for several reasons. First, HOC contends that "this Court has repeatedly found that Georgia courts satisfy this prong of McWane" in the context of insurance coverage disputes.127F HOC further maintains 128 that the instant action does not involve any important or unsettled issues of Delaware law.128F 129 Finally, HOC asserts that the closely related claims before the Georgia state court may moot the instant declaratory judgment claims.129F In support, HOC cites to Logan v. Loco Florida, LLC, 130 which stands for the proposition that Delaware courts have routinely applied McWane where "'closely relate[d]' claims pending in another jurisdiction 'may moot the requested declarations' in the Delaware action."130F 131 Selective does not respond to HOC's arguments as to the McWane test. Instead, Selective maintains that the instant action should not be dismissed or stayed pursuant to Cryo-

Maid.13 1F 132

LG Elec's, Inc. v. InterDigital Comm's, Inc., 114 A.3d 1246, 1252 (Del. 2015). 126 Id. (internal citation omitted). 127 Def. Mot. at 21. 128 Id. 129 See id. at 22-23. 130 Id.; See also Logan v. Loco Florida, LLC, 2024 WL 1191990, at *4 (Del. Super. Mar. 20, 2024). 131 See Pl. Opp'n at 18-28. 132

The Court finds that the Georgia state court is capable of doing prompt and complete justice for several reasons. First, HOC is correct that the Court has previously found that Georgia state courts are capable of rendering prompt and complete justice in the context of insurance coverage disputes.132F Moreover, it is undisputed among the parties that Georgia law 133 governs the Selective Policies, which predominate over this litigation. Finally, it appears to the Court that Selective's second and third counts are contingent on a declaration as to Selective's first count regarding the enforceability of the anti-assignment provision under Georgia law. Thus, because nearly identical and closely related claims have been made in Georgia state court, a decision on such claims may moot the requested declarations in this action. Accordingly, the second McWane prong is met.

1. The Georgia State Action involves the same parties and issues. "It is well-settled that McWane favors a stay 'not only where the parties and issues are identical, but also where there exists a substantial or functional identity between the two [issues] such that they arise out of a common nucleus of operative fact."133F This factor concerns "the 134 possibility of conflicting rulings which would come forth if both actions were allowed to proceed simultaneously."134F 135 HOC argues that the third McWane prong is met as "this action is essentially identical to its Complaint in the Federal Action."135F HOC further asserts that its "counterclaims against 136 Selective in the Federal Action are substantially the same as the subsequently filed [Georgia]

See Lima Delta Co. v. Global Aerospace, Inc., 2016 WL 691965, at *6 (Del. Super. Feb. 19, 2016) (dismissing a 133 case in favor of a first-filed action and finding that "Georgia is capable of rendering prompt and complete justice…."). Bright Data, Inc. v. Meta Platforms, Inc., 2023 WL 5322293, at *4 (Del. Super. Aug. 18, 2023) (quoting Tulum 134

Mgmt. USA LLC v. Casten, 2015 WL 7546003, at *2 (Del. Ch. Oct. 15, 2009)).

Choice Hotels Int'l, Inc. v. Columbus-Hunt Park Dr. BNK Invs., L.L.C., 2009 WL 3335332, at *7 (Del. Ch. Oct. 135 15, 2009). Def. Mot. at 23. 136

State Action complaint."136F HOC acknowledges that the parties are not identical to those in the 137 Georgia State Action.137F However, HOC posits that this fact "does not change [the] analysis" 138 under Delaware law.138F 139 Again, Selective does not respond to HOC's arguments as to the third McWane prong. As a preliminary matter, HOC's argument focuses on the similarities between this action and the Federal Action. The Court focuses on this action and the Georgia State Action as relevant for purposes of conducting a McWane analysis. Notwithstanding, the Court finds that the Georgia State Action involves the same issues as this action. Both the Georgia State Action and this action "require nearly identical determinations."139F Specifically, both actions involve 140 declaratory judgment claims regarding the rights and obligations to defend and indemnify under the APA as between Selective and HOC. The Court also finds that, while the parties in the Georgia State Action are not identical, the parties are the same for purposes of a McWane analysis. Delaware courts have previously found that "[p]arties are substantially the same under McWane where related entities are involved but not named in both actions."140F Here, HOC and each Selective entity are also 141 named in the Georgia State Action complaint.141F The difference between the parties in this 142 action and the Georgia State Action is the inclusion of several additional insurers.142F However, 143 it appears to the Court that the inclusion of the additional insurers does not affect the claims asserted between HOC and Selective. Thus, for purposes of McWane, the parties are the same

Id. at 24. 137 See id. 138 Id. 139 Highland Pipeline Leasing, LLC v. Magellan Pipeline Co., L.P., 2021 WL 1292794, at *4 (Del. Super. Apr. 6, 140 2021). Id. 141 See generally Def. Mot., Ex. I. 142 See generally Compl.; see also Def. Mot., Ex. I. 143

even though other related entities are involved in the Georgia State Action and were not named in this action. Therefore, the third McWane prong is met. Accordingly, in an exercise of its discretion, the Court will dismiss this action pursuant to

McWane in preference to the Georgia State Action.143F 144

1. CONCLUSION For the reasons set forth above, the Motion is GRANTED, and this action is

DISMISSED. IT IS SO ORDERED.

March 27, 2026 Wilmington, Delaware /s/ Eric M. Davis Eric M. Davis, President Judge cc: File&ServeXpress

The Court will not address the issue of whether Selective's claims are "overripe." The decision to dismiss the 144 action under McWane moots the issue of overripeness.