D&O Policy With “Other Insurance” Language Contained In The Insuring Agreement Ruled Excess Over D&O Policy With Such A Provision In A Separate Section
Progressive Casualty Ins. Co. v. St. Paul Fire & Marine Ins. Co., 2014 U.S. Dist. LEXIS 73220 (N.D. Cal. May 28, 2014)
In Progressive, the Northern District held that proration and equitable contribution were not warranted between Progressive Casualty Insurance Co. and St. Paul Fire & Marine Insurance Co. based on the placement of the “other insurance” language in the two policies.
In this case, Progressive and St. Paul were involved in a coverage dispute regarding their respective rights and obligations to their mutual insured who was sued in an underlying action. St. Paul took the position that its policy was excess over Progressive’s policy because, unlike Progressive’s policy, the “other insurance” clause in the St. Paul policy was contained in the insuring agreement. Progressive, on the other hand, took the position that the location of the “other insurance” language was irrelevant. Progressive covered the cost of the defense and settlement of the underlying action and subsequently brought a lawsuit against St. Paul seeking contribution for the amounts it paid in connection with the underlying action. Both parties cross-moved for summary judgment.
The district court ultimately granted summary judgment in favor of St. Paul. In so ruling, the district court found that the disputed language in St. Paul’s policy was not a typical “other insurance” clause because this language was contained on the first page of the policy in the sentence describing the scope of coverage in the first instance. The court noted that even if it accepted Progressive’s argument that the disputed language in St. Paul’s policy was ambiguous in that it did not identify the Progressive policy as being primary or establish a predetermined amount of primary coverage before liability would attach, the extrinsic evidence demonstrated that St. Paul and the insured intended the policy to be excess to Progressive’s primary policy. Accordingly, the district court found that St. Paul did not breach any duties under its policy and that Progressive was not entitled to equitable contribution or reimbursement from St. Paul.
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