Calculation of Defense Contribution Not Reliant On Same Layer of Coverage

Continental Casualty Company v. National Union Fire Insurance Company of Pittsburgh, PA (D.C. Minn. Case 09-cv-00287-JRT-JJG, August 9, 2013)

In a coverage matter involving exposure to benzene, one insurer, among five others, sought additional contribution from another for defense costs.  Previously, the Minnesota Federal Court had granted summary judgment in favor of the plaintiff insurer, finding that the defendant insurer owed one-seventh of the defense costs associated with the action pursuant to Cargill, Inc. v. Ace Am. Ins. Co., 784 N.W.2d 341, 354 (Minn. 2010).  However, one of the seven insurers was an excess carrier.  Accordingly, the plaintiff insurer filed a motion for reconsideration under F.R.C.P. 59(e) to correct the amount owed by the defendant insurer to one-sixth of the defense costs. Notwithstanding the fact that one of the insurers was an excess carrier, the Minnesota federal court declared that there was no justification to change the amount of defense owed by the defendant insurer.  Citing Cargill, the court explained that the case only required that the insurer have “a duty to defend the insured.”  Cargill did not require that the insurers provide coverage on the same basis. Since the plaintiff insurer presented no new, or contradictory evidence that would negate a duty to defend, did not dispute testimony about the duty to defend, or dispute that the policy was triggered by the underlying benzene exposure cases, the excess insurer had to be included in the defense determination and the plaintiff insurer’s motion was denied.

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