Great American Insurance Co. v. Primo, 512 S.W.3d 890

Robert Primo, a former director/treasurer of Briar Green condo association, wrote checks totaling just over $100,000 shortly before resigning; Briar Green claimed misappropriation.
Briar Green's fidelity insurer, Travelers, paid the loss in exchange for a written assignment of Briar Green’s claims against Primo and then sued Primo; Travelers later non-suited its suit.
Primo sought defense costs from Great American (Briar Green’s D&O insurer) after Travelers’ suit; Great American denied coverage relying on the policy’s insured‑vs‑insured exclusion.
Primo sued Great American for breach of contract and various extra‑contractual claims; Great American moved for summary judgment arguing (1) collateral estoppel/one‑satisfaction barred Primo’s suit and (2) the insured‑vs‑insured exclusion applied because Travelers succeeded to Briar Green’s interest by assignment.
The trial court granted summary judgment for Great American; the court of appeals reversed based on a narrow construction of “succeeds to the interest”; the Supreme Court granted review.
The Supreme Court held the exclusion applied to an assignee of the insured’s claim (Travelers), reversed the court of appeals, and rendered judgment for Great American.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the D&O policy’s insured‑vs‑insured exclusion bars coverage when the insured’s claim is assigned to a third party	Primo: assignment to Travelers does not make Travelers a “successor” for exclusion purposes; exclusion shouldn’t bar coverage here	Great American: assignment made Travelers a successor to Briar Green’s interest, bringing the claim within the insured‑vs‑insured exclusion	Held: exclusion applies to assignees; Travelers “succeeded to the interest” and exclusion bars coverage
Proper meaning of “succeeds to the interest” in the exclusion	Primo: “succeeds” requires corporate‑transaction style successor who assumes rights and obligations	Great American: plain, ordinary meaning includes an assignee who comes into possession of the insured’s claim	Held: adopt plain meaning — an assignee who acquires the insured’s claim succeeds to its interest; court rejects narrow corporate‑transaction gloss
Whether extra‑contractual claims survive if coverage is resolved for insurer	Primo: pursued bad faith and statutory claims	Great American: no coverage, so extra‑contractual claims fail	Held: when coverage decided for insurer, extra‑contractual claims do not survive; judgment for insurer

Gilbert Tex. Const., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118 (Tex. 2010) (contract‑interpretation principles and plain‑language rule)
Nat’l Union Fire Ins. Co. v. Crocker, 246 S.W.3d 603 (Tex. 2008) (assigning ordinary meanings to contract terms; avoid rewriting contracts)
Augusta Court Co‑Owners’ Ass’n v. Levin, Roth & Kasner, P.C., 971 S.W.2d 119 (Tex. App.—Houston [14th Dist.] 1998) (discussed prior definition of “successor” in different contractual context)
State Farm Lloyds v. Page, 315 S.W.3d 525 (Tex. 2010) (disagreement between parties does not alone create ambiguity; extra‑contractual claims fail if no coverage)
Houston Expl. Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462 (Tex. 2011) (consider surrounding circumstances to inform contract text)
Level 3 Commc’ns, Inc. v. Fed. Ins. Co., 168 F.3d 956 (7th Cir.) (insured‑vs‑insured clauses prevent intra‑family suits and collusion)
Miller v. St. Paul Mercury Ins. Co., 683 F.3d 871 (7th Cir.) (insured‑vs‑insured exclusion applied in D&O context)