Insurance Co. of Pennsylvania v. Great Northern Insurance
43 F. Supp. 3d 76
D. Mass.2014Background
- ISOP paid and continues to pay workers’ compensation benefits to an injured Progression, Inc. employee under a policy it issued; Great Northern issued a concurrent policy to the same insured.
- Progression never tendered the employee’s claim to Great Northern; ISOP later sent Great Northern a tender letter on October 3, 2011.
- Great Northern denied coverage, stating Progression had intended to tender the claim only to ISOP and had not authorized ISOP to tender to Great Northern.
- ISOP sued seeking a declaration that equitable contribution requires Great Northern to reimburse ISOP for amounts ISOP paid.
- Cross-motions for summary judgment were filed; the court found no disputed material facts and resolved the issue as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether equitable contribution can be forced on a coinsurer when only the other insurer (not the insured) tendered the claim | ISOP: tender from ISOP to Great Northern suffices; contribution should not depend on who (insurer vs insured) gave notice | Great Northern: contribution obligation is not triggered unless the insured (or authorized agent) tenders the claim; insured never tendered or authorized tender | Court held: coinsurer’s obligation for contribution arises only after tender of defense/indemnity by the insured or an authorized actor; ISOP’s tender alone did not trigger Great Northern’s liability |
Key Cases Cited
- Travelers Ins. Co. v. Aetna Ins. Co., 359 Mass. 743 (Mass. 1972) (recognizes insurer’s right to seek contribution from co-insurer)
- Rubenstein v. Royal Ins. Co. of Am., 44 Mass. App. Ct. 842 (Mass. App. Ct. 1998) (no bar to insurers obtaining contribution for defense or indemnity costs)
- Lexington Ins. Co. v. Gen. Acc. Ins. Co. of Am., 338 F.3d 42 (1st Cir. 2003) (equitable contribution cannot override explicit, unambiguous policy language)
- Truck Ins. Exch. v. Unigard Ins. Co., 79 Cal. App. 4th 966 (Cal. Ct. App. 2000) (timely notice from another insurer can permit contribution absent prejudice)
- Mutual of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wash.2d 411 (Wash. 2008) (insurer seeking contribution cannot tender in place of insured; insured’s choice not to tender can bar contribution)