American Guarantee, etc. v. United States Fidelity, etc., et al., No. 10-2275 (8th Cir. 2012)
Annotate this CaseThis case involved a dispute between an excess and primary insurer, both of whom insured a trucking company whose tractor trailer was involved in a fatal accident. Parties injured in the accident sued the trucking company and obtained a jury verdict which exposed the excess carrier to a $17 million dollar liability. The excess carrier sued the primary carrier, alleging bad faith in failing to settle the underlying claim within the policy limits. The court held that the district court did not err in applying Missouri law because the excess insurer failed to identify Washington as a state "with a relationship to, or an interest in the issues that approaches Missouri's[.]" The court also held that the excess insurer's bad faith claim failed because its insured never made a demand of the primary insurer to settle the underlying litigation within the policy limits. Accordingly, the court affirmed the district court's grant of summary judgment to the primary insurer.
Court Description: Civil Case - diversity. In dispute between excess and primary insurers of trucking company whose tractor trailer was involved in fatal traffic accident, excess carrier sued the primary carrier, alleging bad faith in failing to settle the underlying claim within the policy limits. District court's grant of summary judgment to primary carrier is affirmed. District court did not erred in determining Missouri law applied, as the place of the injury to insured bears little relation to the dispute between the insurers, the injurious conduct in a bad faith failure-to-settle occurred in Missouri, the place of the business of the party favored neither state, and the relevant relationship to consider is the two insurers. Applying Missouri law, the district court did not err in determining the bad faith claim failed because the insured never made a demand for the primary insurer to settle within the policy limits.
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