On January 13, 2015, the Illinois Appellate Court issued its opinion in Illinois Tool Works, Inc. v. Travelers Casualty and Surety Co., 2015 IL App. (1st) 132350 (1st Dist. 2015), wherein the court held the insurer had a duty to defend its insured against numerous vaguely pleaded toxic tort complaints. The central issue in Illinois Tool Works was whether facts extrinsic to the underlying complaint, known to both the insurer and insured, can abrogate the duty to defend. The Illinois Appellate Court held that undisputed extrinsic facts not pleaded in the underlying complaint cannot relieve an insurer of its duty to defend unless and until proven in the underlying action. Continue reading The Illinois Duty to Defend: Litigation Insurance against Groundless Suits Even When Extrinsic Facts Known to Both Insurer and Insured Would Otherwise Abrogate Coverage
It is becoming more common for courts to consider the nuts and bolts of an equitable allocation among insurers that cover the same risk. Along comes another such decision in the very heavily litigated coverage dispute that already has many lengthy trial court decisions. The latest decision in MGA Entertainment v. The Hartford, 2012 U.S. Dist. LEXIS 55281 (C.D. Ca., April 18, 2012) involves the equitable sharing of many tens of millions of dollars in defense costs incurred by Bratz doll manufacturer, MGA, in an acrimonious lawsuit with Mattel involving copyright infringement and trade secret theft, among other issues.
An intermediate appellate court in California has issued a decision addressing inter-insurer contribution claims for indemnity payments in the context of self-insured retentions (SIRs) that has a couple of new twists worth noting. In Axis Surplus Ins. Co. v. Glencoe Ins. Ltd. (April 11, 2012), the Court of Appeal for the Fourth District affirmed the trial court’s ruling that Axis was entitled to contribution from Glencoe in the amount of 60% of what Axis paid to settle a construction defect claim against their mutual insured, despite the facts that the insured only made its settlement payment that satisfied the Glencoe SIR after Axis made its settlement payment, that Axis did not prove actual covered damages exceeding the total settlement amount, and that both insurers’ policies contained equal-shares allocation “other insurance” wording.