Century Indemnity Co. v. Liberty Mutual Insurance, 815 F. Supp. 2d 508

Century seeks equitable contribution from Liberty Mutual for Emhart’s defense costs at the Centerdale Manor Site; Liberty Mutual settlement with Emhart preceded Century’s suit.
Century paid Emhart $6,067,290.11 after judgment; Liberty Mutual settled for $250,000.
Liberty Mutual’s defense duty was found to exist; discovery on settlements and other insurers’ duties occurred.
This decision resolves: (i) the impact of Liberty Mutual’s settlement on Century’s contribution, and (ii) the proper method to allocate defense costs.
Century argues for a time-on-the-risk allocation; Liberty Mutual urges equal-shares allocation or other methods; Rhode Island law governs equitable allocation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Effect of Liberty Mutual settlement on contribution	Century	Liberty Mutual	Settlement has no effect on Liberty Mutual’s post-settlement contribution
Preferred method of defense-cost allocation	Century	Liberty Mutual	Time-on-the-risk allocation chosen over equal-shares
Interest on costs	Century	Liberty Mutual	Pre- and post-judgment interest awarded to Century defense costs
Role of other-insurance clauses	Century	Liberty Mutual	Not applicable; clauses pertain to concurrent coverage, not successive defense costs

Maryland Cas. Co. v. W.R. Grace & Co., 218 F.3d 204 (2d Cir.2000) (equitable contribution principles; settlement not automatic bar to contribution)
Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127 (Utah 1997) (settlement considerations and equitable burden distribution)
Peloso v. Imperatore, 434 A.2d 274 (R.I.1981) (proration of defense costs by policy limits when concurrent and same risk)
Forty-Eight Insulations, Inc. v. Ins. Co. of North Am., 638 F.2d 1225 (6th Cir.1980) (time-on-the-risk rationale for defense-cost allocation in progressive injuries)
Boston Gas Co. v. Century Indem. Co., 910 N.E.2d 290 (Mass. 2009) (advocates time-on-the-risk approach for progressive injuries)