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Judges uphold insurers’ share of settlement liability

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A District judge did not err in how he apportioned liability among three insurers for payment of a settlement between an injured worker and a contractor, the 7th Circuit Court of Appeals held Friday.

Indiana Steel Fabricating hired Central Steel Erectors as a subcontractor on a project. In the course of that work, Brian Colip, a Central Steel employee, fell from a roof and injured himself. He sued ISF and settled for $2.9 million. At issue before the 7th Circuit is how much, if any, should ISF’s insurers, Amerisure Insurance Co. and National Surety Corp., or Central Steel’s insurer, Scottsdale Insurance Co., be liable with regard to the settlement.

U.S. District Judge William Lawrence ultimately found Amerisure and Scottsdale liable for $1 million each and National liable for $900,000.

The appeal relates to Scottsdale’s obligation to contribute to the settlement under its umbrella policy. Central Steel had two policies through Scottsdale: a commercial general liability policy and an umbrella policy. Scottsdale claimed that the umbrella policy contains an explicit exclusion that exempts it from paying; Amerisure and National countered that Scottsdale is estopped from relying on that provision and it doesn’t apply here.

The exclusion says the insurance doesn’t apply to “bodily injury” arising out of a claim or suit brought by any insured against another insured. The judges found a straightforward way of reading this exclusion is as one that applies to lawsuits between two parties covered by the same insurance, and it reflects the intent of Scottsdale and Central Steel not to purchase insurance that would cover personal injury lawsuits between insured parties under the umbrella policy.

The exclusion applies to this case, the 7th Circuit held, so Scottsdale doesn’t have to draw on the umbrella policy to fund the settlement. The appellate court also rejected Amerisure and National’s arguments that Scottsdale didn’t bring up its rights under the exclusion until too late in the game, which constitutes an unfair attempt by Scottsdale to “mend its hold.” The mend-the-hold doctrine prevents a defense in contract litigation from changing defenses midstream without any reason for doing so.

Indiana has only applied this doctrine once – back in 1928 – and the judges declined to use it in this case. In addition, the parties had ample notice of Scottsdale’s intent to assert all defenses to coverage available to it under the policy, Judge Diane Wood wrote.

A typo in some of Scottsdale’s filings regarding how much it seeks to recover does not prevent it from recovering more than $450,000, the judges ruled.

 

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  1. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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