Continental Casualty Company v. Allstate Property and Casualty Insurance Company
235 So. 3d 40
| Miss. | 2017Background
- Peters’s winch injury to Williams occurred while Peters’s boat, trailer, and truck were involved at a marina ramp.
- Allstate insured the truck and trailer; Continental insured the fishing boat; total settlement to Williams was $460,000, split $230,000 each.
- Before settlement, the insurers disagreed on apportionment; Continental sought indemnity from Allstate and reimbursement of defense costs.
- Continental argued it was excess to Allstate’s primary coverage and that Allstate should pay the first $250,000; Allstate argued pro rata sharing.
- The circuit court granted partial summary judgment for Allstate on defense costs and then on indemnity, applying pro rata sharing; sanctions were denied.
- On appeal, Continental prevailed on the indemnity claim, with Supreme Court reversing to assign Continental as excess and recover $20,000; defense-cost recovery for Continental remained denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who is primary vs excess insurer for the settlement | Continental: Continental excess; Allstate primary; excess controls | Allstate: both policies primary pro rata | Continental is excess; Allstate primary; Continental to pay $20,000 |
| Whether Continental may recover defense costs after tendering defense | Continental is entitled to recover reasonable defense costs | No duty to defend since no lawsuit filed; costs not recoverable | Summary judgment for Allstate on defense-cost claim affirmed |
| Sanctions for Continental's defense-cost claim | Continental's claim not frivolous; justified by discovery | Sanctions warranted for frivolous claim | Sanctions denied; not warranted |
Key Cases Cited
- Guidant Mut. Ins. Co. v. Indemnity Ins. Co. of N. Am., 13 So.3d 1270 (Miss. 2009) (two policies on same vehicle; excess vs primary analysis informally discussed)
- Larson v. Blue Cross & Blue Shield of Miss., Inc., 485 So.2d 1071 (Miss. 1986) (excess vs pro rata; guidance on repugnancy and priority of coverage)
- Chappell v. Travelers Indem. Co., 246 So.2d 498 (Miss. 1971) (repugnancy doctrine for conflicting other-insurance clauses)
- Allstate Ins. Co. v. Chicago Ins. Co., 676 So.2d 271 (Miss. 1996) (conflicting other-insurance clauses; held repugnancy can apply)
- Indem. Ins. Co. of N. Am. v. Guidant Mut. Ins. Co., 99 So.3d 142 (Miss. 2012) (primary vs excess; exhaustion of primary limits before excess applies)
- statutory/related: State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Ins. Co., 797 So.2d 981 (Miss. 2001) (primary coverage rule for vehicle-involved accidents)