Instead, it could make UNR defend itself after the exhaustion of UNR's primary coverage and later indemnify UNR for the costs that it incurred. Under its policy, CNA had the option not to defend. These points would certainly establish a waiver of any "no action" rights if CNA were a primary insurer, with a duty to defend its insured against claims. Also without dispute, the valuation of asbestos claims in the reorganization was reasonable. But without dispute, CNA had notice of the bankruptcy reorganization and opportunity to participate. Assuming for the moment that the reorganization order was not a "judgment" but only a "written agreement", the "no action" clause would on its face bar suit because CNA was not a party to the agreement. the amount of obligation to pay shall have been finally determined either by judgment against or by written agreement of, the claimant, and. Again, that clause provides, "No action shall lie against unless. This valuation is binding on CNA despite the "no action" clause of its policy. to eliminate the very solvency risk" that would lead to a settlement limited by the amount of the insured's assets). 1990) (applying Illinois law and concluding that " he point of insurance policies. 73, § 1000 (requiring that liability insurance policies contain such a provision) see also Harbor Insurance v. shall not relieve of any of its obligations") ., ch. CNA Insurance Policy, "Conditions," p 7 (stating, "Bankruptcy. This profit for CNA would be contrary to both the CNA Policy and Illinois law. CNA may profit greatly from UNR's bankruptcy if its obligations are based on the arbitrarily discounted amount that the asbestos victims actually receive from the Trust. The discounting merely reflected the amount of UNR's assets that the asbestos victims could reach. This discounting of the asbestos victims' damages had nothing to do with the merits of their claims. The reason for the potential windfall is that UNR paid the Trust only a portion of the asbestos victims' actual damages in the bankruptcy proceedings. UNR's bankruptcy resulted in a judgment or settlement (which one does not matter) against UNR in the amount of $254 million on the asbestos claims. The threshold question is whether UNR has suffered any "loss" under these provisions. The CNA Policy then defines "loss" as "the sums paid as damages in settlement of a claim or in satisfaction of a judgment." Id., "Definitions." Tracking this definition, the "no action" clause of the CNA Policy further provides, "No action shall lie against unless. RDU8062037 (the "CNA Policy"), "Coverage", p 1 (emphasis added). The policy provides in its first sentence that CNA "will indemnify the insured for loss in excess of the total applicable limits of underlying insurance." CNA Umbrella Excess Third Party Liability Policy No. The amount of this insurance was $5 million per year for a three year policy period, Novemto November 1, 1973. That is, it provided UNR with an additional layer of insurance on top of UNR's other, primary insurance policies. and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.ĬNA is an excess insurer. Stegemoeller, Defrees & Fiske, Chicago, Ill., for Official Creditors Committee of Asbestos-Related Claimants, amicus curiae.īefore WOOD, Jr. Forde, Mary Anne Mason, Chicago, Ill., for Legal Representative for Unknown Putative Asbestos-Related Claimants, amicus curiae. Jones, Grippo & Elden, Chicago, Ill., for defendants-appellees. Kendall Griffith, Hinshaw & Culbertson, Terrence E. Farman, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for plaintiffs-appellants. Thomas, Paul, Hastings, Janofsky & Walker, Santa Monica, Cal., Ronald M. Horton, Kaye, Scholer, Fierman, Hays & Handler, Washington, D.C., Geoffrey L. Gaynor, Schwartz, Cooper, Kolb & Gaynor, Chicago, Ill., Paul A.
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