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White v. Continental Insurance Co.

February 6, 2006

CASEY D. WHITE, PLAINTIFF,
v.
V. THE CONTINENTAL INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: A. Richard Caputo United States District Judge

MEMORANDUM

Presently before the Court are Defendant Continental Insurance Company's Motion for Summary Judgment (Doc. 14) and Great Northern Insurance Company's Motion for Summary Judgment (Doc. 16). Following oral argument on the motions and for the reasons set forth below, Continental Insurance Company's motion will be granted and Great Northern Insurance Company's motion will be denied. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441(a).

FACTUAL BACKGROUND

On August 17, 2001, Casey White sustained bodily injuries in a motor vehicle accident while a passenger in a 1996 Jeep Cherokee ("vehicle"). (Doc. 12 ¶ 1.) The vehicle was owned by Robert and Regina Euler ("the Eulers"). (Doc. 12 ¶ 3.) However, at the time of the accident, the vehicle was being operated by Michael Ahearn. (Doc. 12 ¶ 4.)

a. The Insurance Policies

At the time of the accident, Michael Ahearn, who resided with his parents Michael and Joanne Ahearn, was insured under a primary automobile insurance policy issued by Great Northern Insurance Company ("Great Northern"). The policy provided $500,000 of initial liability coverage. In addition, Great Northern's policy had an "Other Insurance" provision that states:

Vehicles: When other liability insurance applies to covered damages, we will pay our share. Our share is the proportion that the amount of coverage under this policy bears to the total of all applicable amounts of coverage. However, for non-owned motorized land vehicles, this insurance is excess over any other insurance, except that written specifically to cover excess over the amount of coverage in this policy. (Doc. 13, at 000206) (emphasis added).

Meanwhile, the Eulers were insured under a USP Deluxe Package insurance policy issued by Continental Insurance Company ("Continental"). The USP Deluxe Package provided the following pertinent coverage: (1) primary automobile insurance with $250,000 of liability coverage; and (2) Optional Excess Liability Coverage in an amount of $2.5 million. (Doc. 13, at 000031-34).

The Optional Excess Liability Coverage Endorsement ("Excess Coverage"), which provides excess liability coverage of $2.5 million, uses the following language to define the coverage provided:

EXCESS LIABILITY COVERAGE Insuring Agreement We will pay damages . . . up to the limit of liability shown in the Coverage Summary for "Optional Excess Liability". Any payment is subject to the minimum retained limit . . .and the other provisions of this endorsement.

Limit of Liability

You must maintain underlying insurance for each exposure shown in the Coverage Summary for "Optional Excess Liability", with not less than the liability limits shown in the Minimum Retained Limit definition. Except as provided in Provision 3, Self Insured Retention, under the General Provisions Optional Excess Liability Coverage Endorsement, we will pay only the difference between:

1. The Minimum Retained Limit amount shown in the Coverage Summary; and

2. The total of what you legally have to pay; and in no case more than the limit shown in the Coverage Summary for "Optional Excess Liability".

NOTE: The Minimum Retained Limit will be satisfied in regard to any exposure(s) for which you maintain the underlying insurance as part of [the Continental Policy] with which this endorsement is issued. (Doc. 13, at 000123) (emphasis in original). "Minimum Retained Limit" is defined as follows by the policy:

7. Minimum Retained Limit means the greater of:

a. The total limits of any other insurance that applies to the occurrence which:

(1) Are available to a covered person; or

(2) Would have been available except for the bankruptcy or insolvency of the insurer providing the underlying insurance; or

b. The "Minimum Retained Limit" amount shown in the Coverage Summary

(Doc. 13, at 000122) (emphasis in original).

In addition, the Excess Coverage policy includes the following pertinent amendments and additional terms:

GENERAL PROVISIONS -- OPTIONAL EXCESS LIABILITY COVERAGE ENDORSEMENT Except for the Definitions section and items modified by specific reference in the following provisions, the coverage provided by this endorsement is subject to the terms and provisions found in the policy's "INTRODUCTION" and "GENERAL PROVISIONS". The following are in addition to those terms and provisions and apply to only the "OPTIONAL EXCESS LIABILITY COVERAGE ENDORSEMENT".

7. Other Insurance

Only in regard to the coverage provided by this endorsement, the Other Insurance provision of the policy's "GENERAL PROVISIONS" is deleted and replaced by the following: When there is other applicable insurance, we will provide coverage as follows:

b. During the first and subsequent years of this policy, when an amount of "Optional Excess Liability" is shown effective in the Coverage Summary, the coverage provided by this endorsement is excess over any other valid and collectible insurance except:

(1) When other insurance is written specifically as excess coverage over the minimum retained limit, we will pay only our share of the loss. Our share is the proportion that our limit of "Optional Excess Liability" bears to the total of all applicable limits.

(2) When other insurance is written specifically as excess coverage over the amount shown in the Coverage Summary for "Optional Excess ...


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