Motors Liquidation Company DIP Lenders Trust v. Allianz Insurance Company
N11C-12-022 PRW CCLD
| Del. Super. Ct. | Jun 19, 2017Background
- Motors sued GM's excess carriers, including OneBeacon and Continental, for asbestos claims coverage.
- GM transferred pre-1986 insurance rights to Motors via an assignment and subsequent trust arrangements during GM's bankruptcy.
- OneBeacon issued three pre-1986 excess policies; Continental issued two; both followed form to Royal’s RLA35 umbrella policy.
- RTP 060000 defined 'occurrence' as an event or continuous exposure causing bodily injury; Endorsement 15 amended coverage in 1971/72 to 'occurrence-reported' for post-1971 periods.
- Motors argued transfer included OneBeacon; OneBeacon contended it was omitted from initial schedules but later included via amendment.
- The court addressed trigger, suit limitations, number of occurrences, and allocation across the transferred policies.
- The court held that OneBeacon policies were transferred to Motors, RTP 06000 was triggered for pre-1972 claims, and allocation should be pro rata.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Transfer of rights to OneBeacon policies | Motors asserts assignment transferred all pre-1986 policies including OneBeacon. | OneBeacon contends its policies were not transferred due to omission from Annex A. | Transfer of rights granted; OneBeacon policies transferred to Motors. |
| Triggering RTP 06000 for pre-1972 claims | RTP 06000 was triggered for pre-1972 claims; Endorsement 15 does not retroactively erase pre-1972 coverage. | Endorsement 15 converts post-1971 coverage to 'occurrence-reported' and may negate pre-1972 trigger. | RTP 06000 was triggered for the pre-1972 claims; Endorsement 15 did not preclude trigger. |
| Suit limitations clause applicability | Suit limitation applies to first-party coverage; not applicable to third-party liability claims here. | Clause in RLA35 applies to all losses and blocks suit. | Suit limitation does not bar Motors' suit; applies to first-party coverage only. |
| Number of occurrences | All pre-1972 asbestos claims constitute one occurrence given continuous product exposure. | Each claim is a separate occurrence. | Post-1972 claims may be treated separately; pre-1972 claims are one occurrence; order reaffirmed. |
| Allocation method | All sums allocation under Michigan law; pro rata favored by Motors. | All sums or pro rata depending on policy language; Michigan trends toward pro rata. | Allocation is pro rata. |
Key Cases Cited
- Rory v. Cont'l Ins. Co., 703 N.W.2d 23 (Mich. 2005) (enforces plain contract language; unambiguous terms control)
- Arco Indus. Corp. v. American Motorists Ins. Co., 594 N.W.2d 61 (Mich. Ct. App. 1998) (pro rata allocation trend in Michigan when language supports it)
- City of Sterling Heights v. United Nat'l Ins. Co., 319 F. App'x 357 (6th Cir. 2009) (allocation considerations and policy interpretation in Michigan-like contexts)
- Pike Creek Recs. Servs., LLC v. VLI, Inc., 82 A.3d 731 (Del. 2013) (Delaware law on law-of-the-case and reconsideration in complex suits)
- Gannett Co., Inc. v. Kanaga, 750 A.2d 117 (Del. 2000) (principles of contract interpretation and breadth of assignment)
- Frank G.W. v. Carol M.W., 457 A.2d 715 (Del. 1983) (restatement of law on law-of-the-case and successor judges)
- Md. Cas. Co. v. W.R. Grace & Co., 128 F.3d 794 (2d Cir. 1997) (ambiguous contract interpretation and industry-wide insurance principles)