Denny's, Inc. v. Chicago Insurance

I. Introduction

This case presents the question whether two excess insurers were required to provide coverage in the place of an insolvent underlying insurer. The trial court granted summary judgment pursuant to Code of Civil Procedure section 437c in favor of the two excess insurers. The trial court found that (1) the excess insurance policies were “not ambiguous with respect to assumption of the risk of an underlying insurer’s insolvency or inability to pay” and (2) the excess insurance policies, through incorporation of the consistent terms and conditions of the insolvent underlying insurer’s policy, expressly excluded coverage of the risk of an underlying insurer’s insolvency. Because we agree with the trial court’s first conclusion, we affirm the judgment. Therefore, we need not resolve the second issue.

II. Background

The parties filed a joint separate statement in support of cross-motions for summary judgment. Therefore, the underlying facts were undisputed. Plaintiff Denny’s, Inc., doing business as Denny’s Restaurant (Denny’s) had liability coverage pursuant to insurance policies in three layers. The first layer consisted of primary comprehensive general…