On May 17, the Sixth Circuit held that settlement of a primary policy exhausts the policy for purposes of equitable contribution claims brought by other insurers. OneBeacon Am. Ins. Co. v. Am. Motorists Ins. Co., __ F.3d __, 2012 WL 1728757 (6th Cir. 2012). The case involved a dispute between an excess insurer and a primary insurer of B.F. Goodrich Corporation (“Goodrich”) related to the environmental cleanup of a Goodrich facility. In 1995, Goodrich settled with American Motorists Insurance Company (“AIMCO”), which issued a $55 million primary policy. In 1999, Goodrich brought a coverage action against other insurers, including a predecessor of OneBeacon American Insurance Company (“OneBeacon”), which was excess of the AIMCO policy. The jury returned a verdict against OneBeacon in the coverage action, and it sought a settlement credit for the coverage Goodrich had received from the settling insurers, including AIMCO. The trial court denied OneBeacon’s request. OneBeacon then brought the instant contribution action against AIMCO. The Sixth Circuit rejected OneBeacon’s claim, recognizing that Ohio has adopted the “all sums” approach for allocating loss among multiple defendants, and that allowing non-settling insurers to seek contribution from settling insurers would discourage insurers from settling with the policyholder.
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Sixth Circuit holds that non-settling excess insurer may not seek contribution from settling primary insurer
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