United States Fidelity & Guarantee Co. v. United States Sports Specialty Ass'n
270 P.3d 464
Utah2012Background
- Dalton Nielson was injured in a Lehi, Utah, softball game; USSSA sponsored the game and was sued along with other defendants.
- United States Fidelity and Guarantee Co. (USF&G) insured USSSA and defended it; policy limit was about $2 million.
- Jury verdict against USSSA was approximately $6.1 million; USF&G moved to stay execution and pursued post-trial motions.
- USF&G posted a bond for the policy limit, then posted a second bond to cover the remainder of the judgment after negotiations with USSSA.
- USF&G settled the underlying dispute for $4,825,000 under a unilateral reservation of rights to seek reimbursement for the excess over policy limits; USSSA refused to sign the settlement; a satisfaction of judgment was filed.
- The Utah Supreme Court certified questions about whether insurers may seek reimbursement from insureds and, if so, under what prerequisites and effects, and concluded reimbursement rights exist only if expressly provided in the insurance policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does an insurer have a right to reimbursement or restitution against an insured? | USF&G argues for an extracontractual restitution right. | USSSA contends no extracontractual right exists; only contract governs. | Right exists only if expressly provided in the policy. |
| If a right exists, are there prerequisites to receiving it? | (Not applicable per holding) | (Not applicable per holding) | Not addressed; depends on contract terms. |
| Does payment in excess of policy limits affect the insurer's right to reimbursement? | (Not applicable per holding) | (Not applicable per holding) | Not addressed; unnecessary given express-term requirement. |
Key Cases Cited
- Iverson v. State Farm Mut. Ins. Co., 2011 UT 34 (Utah 2011) (recognizes limits of unjust enrichment where express contract governs subject matter)
- Restatement (Third) of Restitution and Unjust Enrichment § 35, (2011) () ( Restatement reference cited by court explaining unjust enrichment)
- Equine Assisted Growth & Learning Ass'n v. Carolina Cas. Ins. Co., 2011 UT 49 (Utah 2011) (insurer-right to reimbursement must be in writing)
- Ashby v. Ashby, 2010 UT 7 (Utah 2010) (unjust enrichment requires absence of enforceable contract)
- Prince v. Bear River Mut. Ins. Co., 2002 UT 68 (Utah 2002) (insurer-insured rights and contract-focus in insurance)
- Selvig v. Blockbuster Enters., LC, 2011 UT 39 (Utah 2011) (covenant of good faith/fair dealing in insurance)