Opinion ID: 784931
Heading Depth: 2
Heading Rank: 5

Heading: Exhaustion of Underlying Policy Limits

Text: 41 Aon argues ADM cannot recover under the excess insurance layer of the DIC policy because it has not exhausted the underlying layers. The district court rejected the argument based on its conclusion that ADM's decision to settle with the underlying insurers for less than the full $50 million meant ADM had exhausted the lower layers. Aon claims this ruling was error. 6 42 The district court provided a thorough and well-reasoned analysis to support its conclusion that ADM's decision to settle for less than the underlying $50 million limit and absorbing the balance did not preclude ADM from pursuing coverage under the excess layer. The district court relied on Drake v. Ryan, 514 N.W.2d 785, 789 (Minn.1994), in determining that exhaustion did not mean that ADM must have collected every dollar of the underlying coverages and that settlement with the underlying insurers does not absolve an excess insurer from liability. The district court also distinguished other Illinois and Minnesota cases relied upon by Aon to support its position. Having reviewed the issue, we conclude that the district court did not err in concluding ADM was not precluded from seeking recovery under the excess layer.