Empire Fire & Marine Ins. Cos. v. Citizens Ins. Co. of Am./Hanover Ins.
Annotate this CaseThis insurance-coverage dispute arose after a driver of a leased vehicle struck and seriously injured a pedestrian. The vehicle, a BMW, was owned by BMW Financial Services. The pedestrian and her family sued the driver and BMW Financial for damages. Citizens Insurance Company provided a personal automobile policy listing the driver as an insured and BMW Financial as an additional insured lessor. A separate business auto insurance policy was issued by Empire Fire and Marine Insurance Companies to BMW Financial. The case settled, with Citizens and Empire paying their policy limits. Citizens reimbursed Empire for a portion of the costs Empire expended in legal expenses defending BMW Financial in the civil action but refused to provide Empire with any further reimbursement. Empire subsequently filed a complaint for declaratory judgment seeking a determination that Citizens was liable for reimbursement of all attorneys' fees it incurred. The superior court granted Empire's motion for summary judgment. Citizens appealed, arguing that Empire was entitled only to a pro-rata apportionment of defense costs. The Supreme Court affirmed, holding that it would be improper to resort to a pro-rata apportionment of liability.
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