ILNews

Judges uphold insurers’ share of settlement liability

Back to TopCommentsE-mailPrintBookmark and Share

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.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. For many years this young man was "family" being my cousin's son. Then he decided to ignore my existence and that of my daughter who was very hurt by his actions after growing up admiring, Jason. Glad he is doing well, as for his opinion, if you care so much you wouldn't ignore the feelings of those who cared so much about you for years, Jason.

  2. Good riddance to this dangerous activist judge

  3. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  4. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  5. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

ADVERTISEMENT