Guaranty National Insurance Company, a Colorado Corporation v. American Motorists Insurance Company, an Illinois Corporation

Ninth Circuit

Guaranty National Insurance Company, a Colorado Corporation v. American Motorists Insurance Company, an Illinois Corporation

981 F.2d 1108, 92 Daily Journal DAR 17053, 92 Cal. Daily Op. Serv. 10119, 1992 U.S. App. LEXIS 32758, 1992 WL 370263

CourtCourt of Appeals for the Ninth Circuit

DecidedDecember 18, 1992

Docket91-35836

StatusPublished

Cited by11 cases

This text of 981 F.2d 1108 (Guaranty National Insurance Company, a Colorado Corporation v. American Motorists Insurance Company, an Illinois Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Guaranty National Insurance Company, a Colorado Corporation v. American Motorists Insurance Company, an Illinois Corporation, 981 F.2d 1108, 92 Daily Journal DAR 17053, 92 Cal. Daily Op. Serv. 10119, 1992 U.S. App. LEXIS 32758, 1992 WL 370263 (9th Cir. 1992).

Pincite

Opinion

The decision of the district court reported at 758 F.Supp. 1394 (D.Mont.1991) is affirmed, with this limitation.

One of the parties to the case in the district court was Harbor Insurance Company, which had issued a true excess insurance policy. In this setting, a true excess policy is one which is specifically intended to only come into play when the limits of the underlying coverage are exhausted. It is issued in anticipation of the existence of the underlying policy and is priced in the belief that the excess carrier will not have to provide a defense. See Hartford Accident & Indem. Co. v. Continental Nat’l Am. Ins. Cos., 861 F.2d 1184, 1187 (9th Cir.1989) (“an excess insurer predicates the premiums it charges upon the obligations that it and the primary insurer assume, including the primary insurer’s obligation to defend all suits until exhaustion of its liability limits”).

The dispute resolved by the district court here was between two carriers which had each issued a “primary” insurance policy. Due to the policy provisions involved, or the relationship among the parties to the accident, the coverage of one of the policies had become “excess” to the coverage afforded by the other, or what could be called “excess by coincidence.”

In a case involving a true excess insurance policy, the equitable factors favoring proration of costs of defense would not, or may not, be present. The district court’s decision here involved the duty to contribute to defense costs of an insurance company which had issued an insurance policy which was excess by coincidence, and it is that decision which we affirm today.

AFFIRMED.

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The decision of the district court reported at 758 F.Supp. 1394 (D.Mont.1991) is affirmed, with this limitation.

One of the parties to the case in the district court was Harbor Insurance Company, which had issued a true excess insurance policy. In this setting, a true excess policy is one which is specifically intended to only come into play when the limits of the underlying coverage are exhausted. It is issued in anticipation of the existence of the underlying policy and is priced in the belief that the excess carrier will not have to provide a defense. See Hartford Accident & Indem. Co. v. Continental Nat’l Am. Ins. Cos., 861 F.2d 1184, 1187 (9th Cir.1989) (“an excess insurer predicates the premiums it charges upon the obligations that it and the primary insurer assume, including the primary insurer’s obligation to defend all suits until exhaustion of its liability limits”).

The dispute resolved by the district court here was between two carriers which had each issued a “primary” insurance policy. Due to the policy provisions involved, or the relationship among the parties to the accident, the coverage of one of the policies had become “excess” to the coverage afforded by the other, or what could be called “excess by coincidence.”

In a case involving a true excess insurance policy, the equitable factors favoring proration of costs of defense would not, or may not, be present. The district court’s decision here involved the duty to contribute to defense costs of an insurance company which had issued an insurance policy which was excess by coincidence, and it is that decision which we affirm today.

AFFIRMED.

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282 F.3d 582 (Third Circuit, 2002)

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107 F. Supp. 2d 1064 (D. Nebraska, 2000)

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117 F. Supp. 2d 1022 (D. Colorado, 1999)

Fulton v. Lloyds & Institute of London Underwriting Companies

903 P.2d 1062 (Alaska Supreme Court, 1995)

Texas Employers Insurance v. Underwriting Members of Lloyds

836 F. Supp. 398 (S.D. Texas, 1993)

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825 F. Supp. 705 (E.D. Pennsylvania, 1993)

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981 F.2d 1108, 92 Daily Journal DAR 17053, 92 Cal. Daily Op. Serv. 10119, 1992 U.S. App. LEXIS 32758, 1992 WL 370263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guaranty-national-insurance-company-a-colorado-corporation-v-american-ca9-1992.

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