Mission National Insurance Company v. Duke Transportation Company
United States Court of Appeals for the Fifth Circuit
792 F.2d 550 (1986)
Duke Transportation (Duke) (defendant) held a $300,000 primary-liability policy from Northwest Insurance (Northwest) and a $5 million excess-liability policy from Mission National Insurance Company (Mission) (plaintiff), with Mission's policy covering occurrences above $300,000 that were covered by Northwest, and providing only a $10,000 net loss for occurrences Northwest didn't cover. After Northwest became insolvent, Duke demanded Mission defend lawsuits filed against it during the Northwest-coverage period, which Mission refused; Duke sued in state court, Mission removed to federal court seeking a declaration it owed no primary coverage, and the trial court granted Mission summary judgment because the lawsuits, though filed during Northwest's insolvency, would have been covered by Northwest absent that insolvency. Duke appealed.
Whether an excess-insurance carrier is required to provide primary-insurance coverage or defense to its insured if the insured's primary insurer becomes insolvent.