Allianz Global Risks v. ACE Property & Casualty Ins. Co.

“[I]nterpretation of insurance policies is a question of law to be decided by the court… The court is to consider the plain meaning of the relevant policy terms; if a term is ambiguous, the court considers the context in which the term appears and then the context of the policy as a whole; if ambiguity remains, the term is construed against the drafter.”

Allianz petitioned review of the Court of Appeals. Allianz assigned error to the court’s interpretation of “contractual documents” and the finding that the trial court should have granted a directed verdict. Allianz argued that the effects of the side agreements and the interpretation of insurance policies should have been decided as a matter of law and not submitted to the jury. In response, Con-Way argued that Daimler never assumed Freightliner’s liabilities, and they should not be entitled to any claims from the insurance policies. “[I]nterpretation of insurance policies is a question of law to be decided by the court… The court is to consider the plain meaning of the relevant policy terms; if a term is ambiguous, the court considers the context in which the term appears and then the context of the policy as a whole; if ambiguity remains, the term is construed against the drafter.” The Court affirmed the jury verdict that Daimler did assume contingent liabilities of Freightliner. The Court ruled that the trial court erred in submitting to the jury the question regarding whether side agreements forced insurers to defend Freightliner. The question is to be decided as a matter of law based on current and relevant policies. The decision of the Court of Appeals is reversed. The limited judgments of the trial court are affirmed in part and reversed in part, and the case is remanded to the trial court for further proceedings.