Cases

In an appeal of a bankruptcy order, a federal district court of the Southern District of Texas affirmed, holding as justiciable the insurers’ adversary proceedings on their duty to defend and indemnify an insured in Chapter 11 valuation proceedings brought by two personal injury creditors, subject to a lift stay order, who were injured in auto incidents involving the insured’s drivers; that joinder of other insurers was unnecessary for the interpretation of the subject business auto and follow-form excess policies; that Texas and Kansas law aligned on the standard for interpreting an unambiguous insurance provision; that the primary and excess insurers’ obligations were under the policies’ terms not triggered absent the insured’s actual and full payment of applicable self-insured retentions; that neither the creditors’ presentation of unsecured claims nor the bankruptcy plan’s treatment of those unsecured claims satisfied the requirement for the insured’s actual payment of the SIRs in full; that a maintenance clause in the excess policy prompted a drop down if the underlying primary insurer become insolvent, but not if the insured became insolvent; and that the policies therefore were not triggered in the bankruptcy proceedings unless and until the insured paid the SIRs in full.