Landmark American Insurance Co. v. Deerfield Construction, Inc., No. 18-2205 (7th Cir. 2019)Annotate this Case
In 2008, Deerfield’s employee, Graff, had an automobile accident with Keeping. Deerfield had a primary commercial automobile insurance policy through American that covered it for up to $1 million in liability. Deerfield's broker, Gallagher, also helped Deerfield obtain an excess insurance policy from Landmark, to kick in after Deerfield’s liability exceeded $1 million. After Graff’s accident, Deerfield informed American and Gallagher through an intermediary company, Laurus. No one notified Landmark, even after Keeping filed suit. American assumed the defense and hired attorney Olmstead. American never offered the full policy value to settle the suit. More than a year before trial, Keeping made a $1.25 million demand, which was high enough to trigger Deerfield’s excess insurance coverage. American counter-offered $75,000. In 2014, weeks before trial, Landmark learned about Keeping’s lawsuit. Its claims adjuster evaluated the case at $500,000-$750,000. Before trial, Landmark was receiving regular updates as a passive bystander. Before the verdict was announced, American assumed that the jury had sided with the defense and did not resume settlement negotiations. Deerfield did not know about the negotiations, although Olmstead was involved. Landmark knew and advised that American should settle within the primary policy limit. The jury reached a verdict that remitted to $2.3 million. Landmark sought a declaratory judgment that it did not have to cover the loss. The Seventh Circuit affirmed summary judgment for Landmark, holding that Deerfield’s notice was unreasonably late as a matter of law.