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.
Register Now As you are not an existing subscriber please register for your free daily legal newsfeed service.Register
If you have any questions about the service please contact firstname.lastname@example.org or call Lexology Customer Services on +44 20 7234 0606.
Sixth Circuit holds that non-settling excess insurer may not seek contribution from settling primary insurer
If you are interested in submitting an article to Lexology, please contact Andrew Teague at email@example.com.
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of...
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of Texas and have recommended that my friends and colleagues join the Corporate Counsel Section of the State Bar in order to obtain this service for themselves.”
Edward J. Willey III
Huawei Technologies (USA)