Co. v. CNA Insurance Co., 23 D. &C. 3d 433 (Somerset 1982); see also, 69 ALR 2d 1122. We believe this to be the better rule and apply it here.
In the previous opinion, 557 F. Supp. 986, we established by summary judgment that the primary policies of Liberty Mutual and Pacific would stand on equal footing for liability on the verdict. Those policies are admittedly primary and must be exhausted before the excess policies are reached. The excess insurers Liberty Mutual and American Home will contribute pro rata according to the limits of their policies for any amount in excess of the primary policies.
We now address defense costs. Plaintiff's complaint seeks contribution by American Home for costs of defense. American Home's policy places no obligation on the insurer to defend, but clearly leaves the decision entirely in the hands of the insurer. Plaintiff admits as much in its brief on the subject and there are no disputed issues of fact. American Home has chosen not to contribute to the costs of W. T. Grant's defense. Summary judgment will therefore be entered in favor of defendant American Home on plaintiff's claim for contribution for costs of defense.
Plaintiff also raises the matter of common law indemnity as respects the costs of defense. We understand that this issue is pending before the state trial court. We believe that is the proper forum for resolution of the common law indemnity issue, and we will therefore defer to the state court.
We previously addressed the issue of the apportionment of defense costs between Liberty Mutual and Pacific. 557 F. Supp. 986. We concluded that under the primary policies of Liberty Mutual and Pacific those insurers each had an obligation to assume defense costs and that Pacific's obligation survived the exhaustion of its policy limits. We then stated that Liberty Mutual and Pacific were to share equally the costs of the defense.
Pacific has petitioned for reargument on the issue of the apportionment of defense costs between Pacific and Liberty Mutual, and we have received additional briefs from both parties. Pacific seeks apportionment of defense costs on a pro-rata basis in proportion with policy limits, Pacific's liability limitation being $100,000 and Liberty Mutual's excess policy limitation being $10,000,000. Liberty Mutual of course seeks to preserve our earlier requirement of equal contribution of defense costs.
The parties have argued a conflicts of laws question and the law of both Pennsylvania and California on the apportionment of defense costs. However, we need not address any of those issues.
In our previous opinion and order we concluded that the primary policies of Liberty Mutual and Pacific stood on equal footing on defense costs. We did not address the impact of Liberty Mutual's excess policy on costs of defense.
Each of the primary policies contains a liability limitation of $100,000. Liberty Mutual's excess policy has a limitation of $10,000,000. Pacific seeks pro-ration of defense costs on the ratio of Liberty Mutual's excess policy to Pacific's primary policy, or 10 to 1.
Once again, however, the unambiguous language of the policy is determinative. Liberty Mutual's excess policy may not be included in any ratio for apportionment of defense costs because it simply does not obligate Liberty Mutual to pay defense costs in this situation.
With respect to personal injury . . . or damage covered under this policy (or which would be covered but for the insured's retention as stated in the declarations), but not covered under any underlying policy or any other insurance, the company will