1 All State Insurance Company , American Interna

tional Underwriters, Granite State I nsurance Co mp an y, In su ra nc e C om pa ny o f t he St at e o f P en ns ylv an ia , La nd ma rk Ins ur an ce Co mp an y, Lexington I

nsurance Company , Mt. McKinley I nsurance Company , Munich Reinsurance America, Inc., N ational Union Fire Insura nce Company of Pittsburg h, PA, and Travelers Casualty & Surety

Company

. 2 Motors Liquidation Co. DIP Lenders Trust v. Allianz Ins. Co. , 2015 WL 10376123 (Del. Super. Nov. 25, 2015). 3 Smith v. Hughes Aircraft Co. , 783 F. Supp. 1222, 1229 (D. Ariz. 1991), aff’d in pa rt, rev’ d in part , 22 F.3d 1432 (9 th Cir. 1993). IN THE SUPERIOR COURT OF THE STATE OF DELAWARE MOTORS LIQUIDATION ) COMPANY DIPLENDERS ) TRUST, )

Plaintiff, )

) C.A. No: N11C-12-0 22 PRW (CCLD) v. ) ) ALLIANZ

INSURANCE ) COMPANY, et al ., ) ) Defenda nts. ) Submi tted: De cemb er 11, 2015 Decided : March 2, 2016 Upon P laintiff

’s Motion

for Rear gumen t – DENIED ORDER 1. On Decem

ber 4, 2015 , Plainti ff tim ely f iled rear gument of the November

25, 2015 Me mora

ndum Opinion

and Orde r, grant

ing sum mary judgm ent to Defen dants noted b elow 1 and denying Plainti ff’s c ross-motion. 2

2. Pl a inti ff’s reargum ent dwell s on the cour

t’s fai lure to directly address three ca ses: Hughes Aircraft, 3 which Pla intiff ra ised in a f

ootnote during4 SR Int’l B us. Ins. Co . v. W orld Trade C

tr. Props., LLC , 467 F.3d 107 (2d Cir. 2006)

. 5 Mine Safety Appliances Co. v. AIU Ins. Co. , 2015 WL 5829461 (Del. Super. Oct. 1, 2015)

. 2 summar y judgm ent brief

ing; SR Inte rnati onal Busine ss Ins. Co ., Ltd. , 4 which Plaintiff rai sed at oral argument; and Mine Safet y Applianc e Co. , 5 which was issued after argum ent. 3. Plaintiff also chall enges a

couple of background facts mentioned in passing, ba sically

concerning the p rimar y p olicies’ claim s history and prior litigation between old-GM, Plaintiff’s predece ssor, and Royal, old-GM’ s primar y carrier. 4. Otherw ise, Pl aint iff’s re argumen t mostl y recapi tula tes Pl aint iff’s original argum ents, wh ich were decided. For

example, as discussed

below, Plaintiff i nsists a gain that the excess policies can be triggered without the primary policies having been trigg ered fir st, and if that is not t

he case, the 1977 Royal primary policy was trigg ered. S imila

rly, Plaintif

f argues t he court: disregardedthe express follow form language in th ese Defenda nts’ policies[ , which s tates] tha t underly ing provisions are not inc orporate d [into the e xcess polic ies] if the exces s policies thems e lves contai n their ow n provisions on a part ic ular issu e, as these po licies do with their o wn trigger pr ovisions. As to that, of

course th e court co ns idered the follow-form language. T he lead paragra ph in the Opinion said

the question presented was whether the triggers were6 D.I. #900 (“[ Hughes Ai

rcraft ] deals with the specific issue, not present here, of whether a n excess policy containing

narrower exclusion language can apply e

ven though lower level policies containing broader exclusion languag e may not apply . . . . [T]he issue [in SR International ] was whether the 9/11 attacks on the World Trade Center constituted one or two oc currences for purposes of deter mining th e limits of l iability under va rious pro perty policies. . . . [T]he iss

ue in Mine Safety was whether an excess policy explicitly attaching above an underlying

policy that had expired when the claim at issue arose nevertheless follows for m to the expired underlying policy.”). 7 D.I. #902 (“[

Hughes Aircraft and SR International ] involve different policy lang uage, different coverage issues (neither involves trigger, notwithstanding the Trust’s statement to the contrar y), and although it hardly

matters, the law of different jurisdictions. . . . Mine Safety . . . supports . . . grant of Traveler[’]s motion for summary judgment, as the case holds that the very ‘Excess Net Loss’ languag e . . . is unambiguous. . . . [and] [t]he case has nothing to do with whether an excess policy can be

triggered if the primary

insurance beneath it is not.”)

. 8 D.I. #901 (“SR International , decided under New York law, did not involve a situation in which the underlying

policy was not trig gered. I nstead, the issue was how many times each policy wa s triggered. Mine Safe ty Applian ces involved a n alloca tion issue u

nder Pen nsy lvania’ s ‘all sums ’ regime, a regime the Court ha s now effectively held will not be applied to these policies . . . . The Mine Safety Court . . . c onstru[ed ] an excess

policy that over lapped two underly

ing polic ies with di ff er en t l im it s. . . . T he re wa s n o i ss ue th at th e u nd er lyi ng po li cy w as no t t ri gge re d. Fi na ll y, Hughes Ai

rcraft . . . did not have anything to do with trigger.”). 3 inconsisten

t. The court

concluded t

hat Plaint iff’s argum ent was circular, h olding that when the primary

and excess polices were read toge ther, the ir trigger clauses c ould not only be harm onized, but acce pting Plaintiff’s assumptions would render other clauses in the excess policies meaningless, e.g . their net l oss prov isions.

5. As to Plainti ff’s t hree cas es, the c ourt regrets no t havi ng mentioned

them by name, but it w as not oversight. The cases were e asily distinguishable and unhelpful. Because they were forgettable, they were f orgotten. Defe ndants, especiall y AIG, 6 Travel ers, 7 and London M arket Com panies, 8 explain nicely in thei r original briefs and response s here how Hughes Aircraft , Mine Safet y Appliance Co., and SR Intern ational BusinessIns. Co. , Ltd. are inapp osite and do not9 See supra notes 6-8 and acc ompany ing text. 10 See, e.g., London Market Companies’ Resp. (D.I . #901) (“[T]he Court squarely found the Royal policies were

‘claims-made’ policies because of Endorse ment 15.”); Travelers’s Resp. (D.I . #902) (“ Inde

pendent f rom the ru

le that exc ess polic ies are typ ically not trig gered

by a claim that does not trigger the underly ing primary

policy, here the

Court found that Travelers Policies specifically limit their cover age to loss covered by

the underlying

insurance: ‘By

their terms [the Travele rs Policie s] only

pay claims ‘c overed’ by t

he prima ry policy .’ Althoug

h the exce ss policies have ‘occurrence-ba sed’ language, the policies a lso have clear lan

guage lim iting their triggers to the underlying policy’s trigger .’”). 4 support Plaintiff. 9

6. Simi larly

as to the reargue d facts, Defend ants acc urately present the recor

d deve loped through discovery after the court originally denied dismis sal. To be clear, Defenda nts present

the recor d in the light

most favorabl e to Plaintiff. 7. The cour t will not r

ecapitula te, y et again, how it is una ssailable that old-GM ne ver saw the insura nce it negotiated, purc hased, a nd handled f

or decades a s Plaintiff

, in hindsigh

t, sees i t now. N or will th e court recapitula te how old-GM told this cou

rt and its Michigan counterpart that its primary coverage was “claims-made,” not occurren ce-based as Plaintiff n evertheles s contend s.

8. Col lect ive ly, Defenda nts’ opposition

to rearg ument is legally and factuall y on-point, accurat ely reflecting the court ’s holding and its re asoning. 10 Two points, h owever, bear re-e mphasis.

8.A. Fir st, Plaintiff grossly overstates and seriously m ischaracterize s the Opinion’ s holding when Plaintif f pejoratively

and repeate dly insi sts the holding11 Motors Liquidation Co. DIP Lenders Trust v. Allianz Ins. Co. , N11C-12-022 FSS CCLD, at 28

(Del. Super. July 10, 2015) (TRANSCRI PT) (“We are not grounding our c ase on an abstract notion that excess insurance must necessarily be no broader than the underly ing . . . .”). 5 turned on an “ abstract

notion.” S pecifically, Plaintiff declare s the decis ion wa s “based on ‘an a bstract no tion that excess insurance must necessarily be no broader than the underlying.’” Plaintiff trumpets “ abstract notion” six times in rearg ument , alwa ys pu tt in g t he t erm i n qu ot es, in acc ura tel y imp lyi ng th e co urt us ed t he t erm. Evenif the cour

t had used th e quoted te rm, disparaging a legal h o lding sim ply becauseit has abstract qualities until info rmed by a spe cific ca ses’s f acts is not a logical argum ent. That is so , even if the fallacious argum

ent is repe ated over -andover. 8.B. Mor e importantly, the co urt never u sed the ter m “abstract notion ,” much less was the decisi on bas ed o n on e. Th e ter m was o nly u sed by a defen dant ’s lawyer in oral arg

ument . And at

that, cou nsel state d that Def

endant wa s not

basing its case on an “abst

ract notio n that exce ss insurance must necessarily be no broader than the underl ying.” 11 Although Plai ntiff ac knowledge s that Def endants “ did not

even rely ” on this “ abstract notion,” P laintiff leaps to the incorrec t conclusion

that the court bas ed its deci sion on it.

8.C. Most

impor tantly , every

on e, t he court included, agrees that an

excess policy may

be broader than the underlying. The Opinion expressly re cognizes12 Motors Liqu idation Co. D IP Lende rs Trust , 2015 WL 10376123 at 17–18 (“The court furthe r appreciates that in the insurance context, ‘primary ’ and ‘excess’ are words that may be defined differently f

rom policy-to-policy . Thus, it is theoretically possible that a primary policy could be written to provide a self-re tention . . . or an ‘e

xcess’ pol icy

could be w

ritten to provide bo th primary and e

xcess coverage.”). 6 that. 12 Again, an insuranc e contrac t, if it does it clearly, may

overr ide a t erm-of-a rt’s usual mea ning. Tha t, howev er, does not

mea n a com mon te rm- of-art, such as “ excess insuranc e,” has no gener ally a ccepted m

eaning on w

hich parti es to an in surance policy may rely in the absence of qualifying language. Indeed, Plaintiff’s core argum ent counts on the

court’ s apply ing the com monly recogniz ed m eaning o f the term-of-art: “ occurrence.”

8.D. As the Opinion explains, the policies here were s old, denominated , and handled for decades as “excess insurance.” In one wa y or a nother, every e xcess policy repeate dly

refers to the prim

ary or underlying insuranc e, or the like. The fact that the primary

and exces s policies h ave potenti ally inconsistent triggers, in effec t, originally precluded dismissal, but now the court has seen a jury ’s fac t-finding i s unnecessary

to harmonize theprim ary a nd excess po licies. And, if fact-finding were

nec ess ary, old-GM’ s repeate d charac te rizatio n of its in surance as “claims-made,” which was consi stent with its long-term c laims handling, a lso obvi ates a jury’s help. 8.E. In truth as to “a

bstract no tion,” Pl aintiff i s the one rely ing on an abstractnot ion tha t de spi te t he wa y apolicy was m arketed, denom inated, f rame d, and7

handled by the world’s then-l argest corporation, the policy nonetheless provided coverage, as a ma

tter of law, in an unfore seen way , contra ry to t he partie s’ expressed, written in tent.

9.A. Second, as to the f acts, it bears emphasis that the court saw that asbes to s-related

claim s, albeit not t

he ones at i ssue here , were made against or reported to old-GM

while the

excess pol icies wer e on-risk. Thus, a s the Opini on explains, were it not for Endorsement 15's gam e-changing effect from1971 on, oldGM migh t h ave ten der ed t ho se c lai ms andRoyal arguably w ould have aggregated those claims. Furtherm

ore, and pivotal for

Plaintif f, the lo ngtail claims a

t issue m ight then have rela

ted-back to the fir st, in whi ch event th e excess p olicies’ attachm ent points might h ave been r

eached, and the excess tr

iggers m ight have c ome in

to pla y. Under that v iew, Plainti ff might have ha d a case. The cou rt saw that.

9.B. What

the court al so saw, and Pl aintiff gl osses ov er, is th at any claim made during a

year when a Royal policy was on risk, was, in ef fect, handled that year , consistent with Endorsement 15's ha ving unam

biguously converte d th e primary coverage from occurrence -based to c laims -made coverage, as old -GM and Royal intended. The sali ent and undisputed fac t is that no cla im at issue was m ade against or report ed to old-GM, much less Royal, while a Royal policy was on-risk as t o that claim. Hence , Defendants’ point based on undisputed fact: The claims at13 Excess Ove rlay er I ndemnity Policy Revised D efinition s Excess Ne t Loss : “ExcessNet Loss” means that part of the total of all sums which the insured becomes legall y obligated to pay

or has paid, as damages on acc ount of any one a ccident or occurrence, and which would be covered by the terms of the controlling underly ing ins urance, if written without any limit of liability , less realized recoveries and salvag es, which is in ex cess of any self- insured retention and the total of the applica ble lim its of

li ab il it y ( except ag

greg ate limits o f liability ) of all policies described in Section 3. Schedul e of Und erlying Insurance; whethe

r or not such policies are in force or any ag gregate limits of liability

have been exceeded

. 14 See e.g. Conagra v. Lexington Ins ., 21 A.3d 62 (Del. 2011). 8 issue, all of w hi ch w ere made or r epo rte d yea rs l ate r, w ere no t “co ver ed b y th e te rms of the contro lling un derlying ins urance.” 13 And, it c annot be sai d by anyone–Plaintiff, the court, or a jur y–that the underl

ying ins urance, in theory

or fact, covered any c laim at issue. Every claim here is out -of-tim

e. Tha t, of cour se, lead s to the holding as a matter

of law, based on re ading the e xcess and underlying policies togethereven takin g in to ac count the pol icies’ trigger c lauses, D efendants ’ exce ss policies do not cover the longtail claims at issue.

10. In farewell, Defendants are cautioned, yet again, not to m ake the mistake of thumping their chests about the robust factual record in their favor. 14 Itis beside the point that the record supports Defendants as it does. As a matter o f law, if a claim was m

ade or reported after a prim ary policy was no longer on-risk, that claim is dam ned by Endorsement 15, so the claim does not triggerthe pri mary po lic y. That is true, even if other

claims were tim

ely. The late-f

iled claims, like the ones at issue here, c annot trigger the prim ary po licies. The cou

rt conti nues to hold, as a15 Designated under Del. Const. art. I V, § 38 and 29 Del. C . § 5610.

9 matter of law, that the late-filed claim s are not coveredby the underlying insurance. Therefore, th e ex ces s p ol ici es a ls o d o n ot cov er t hem. Thus, as to the tr igger cla uses, tri al i s un nec ess ary.

For the foregoing reasons, Plaintiff’s Motion for Re argu ment i s DENIED

. IT IS SO ORDERED. /s/ Fred S. Silverman Judge ( Retired) 15 cc: P rot hon ota ry Counsel of Record