On October 1, 2013, the Missouri Court of Appeals, Western District, handed down its decision in Scottsdale Insurance Company v. Addison Insurance Company (WD 75963). This represents the first time a Missouri court has been called upon to resolve a dispute between an excess insurer seeking to recover from a primary insurer the amount contributed from an excess policy in order to resolve a claim where the primary insurer failed to settle the claim within its policy limits.
Earlier in the case, the trial court had entered summary judgment in favor of the primary insurer, Addison Insurance Company and United Fire & Casualty Company—collectively “United Fire”—on all counts pled by Scottsdale and the insured, Wells Trucking Inc. Each of seven alternatively pled causes of action sought to recover the amount Scottsdale had contributed toward settling a lawsuit filed against Wells Trucking. The Western District reversed the trial court’s decision and held that an excess insurer can recover the amount it contributed toward settlement from the primary insurer on a theory of equitable subrogation when the primary insurer has committed bad faith in failing to settle a claim within the primary insurer’s policy limits.
A Factual Background
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