Selman Breitman Partner Alan Yuter Wins Major Appellate Case in Missouri
When our insurance coverage specialist Alan Yuter said "show me" the law on whether an excess carrier can sue a primary carrier for failure to settle a case within its limits when that failure caused the excess carrier to pay money in a settlement as a result, Alan found that there was a dearth of law on the subject. That problem has been rectified by Alan's victory in Scottsdale Insurance Company and Wells Trucking, Inc. v. Addison Insurance Company, et al. In theScottsdale case, the Missouri Court of Appeals has expressly held that a excess carrier can assert such a claim against the primary carrier by way of equitable subrogation, since the excess carrier is asserting that it paid an obligation that should have been paid by the primary carrier.
Not only is this decision a great result for SB's client, it is a major addition to insurance law in the state of Missouri.
The Court held that if:
1. The primary carrier had the opportunity to settle a claim against its insured within or by payment of the primary limits;
2. The primary carrier refuses to settle in bad faith;
3. The excess carrier pays out its policy limits to discharge an obligation it owes to the insured; and
4. The excess carrier can show that, if the excess insurance did not exist, the insured would have incurred damages as a proximate result of the primary's refusal to settle;
5. Then the excess carrier can prevail against the primary carrier for all money paid by the excess carrier.
Congratulations to Alan and to his fellow SB Partner, Rachel Hobbs, who assisted Alan, on this important appellate victory.