Lumbermens Mut. Cas. Co. v. Allstate Ins. Co.
| Citation | 51 N.Y.2d 651,417 N.E.2d 66,435 N.Y.S.2d 953 |
| Parties | , 417 N.E.2d 66 LUMBERMENS MUTUAL CASUALTY COMPANY, Appellant, v. ALLSTATE INSURANCE COMPANY et al., Respondents, et al., Defendants. |
| Decision Date | 22 December 1980 |
| Court | New York Court of Appeals |
This case involves the interpretation of four insurance contracts which, coincidentally, provide liability coverage for the same event. In the context in which this case comes to us we are presented for the first time with the question of whether a contract expressly providing for "excess insurance" in all cases contributes ratably with all other "excess insurance", or whether an insurer may structure the policy specifically to provide secondary excess coverage that will not be reached until both the primary and other excess policies are exhausted.
On December 27, 1974, Jack Tantleff was involved in an automobile accident in which two of his passengers were injured. The car he was driving was registered in the name of One Eleven South Street Number 2, Inc.
Actions subsequently commenced resulted in a settlement in favor of the first passenger for the sum of $750,000, and in favor of the second passenger for $30,000. Primary insurance had been provided by the Allstate Insurance Company (Allstate) to One Eleven South Street Number 2, Inc., the owner of the car, to the limit of $300,000. This amount was contributed by the primary insurer toward the settlement. Allstate also provided two forms of nonprimary insurance in this case, and, along with Lumbermens Mutual Casualty Company (Lumbermens) which also provided a form of nonprimary insurance, agreed to contribute toward the balance of the settlements equally with Lumbermens, while both companies reserved the right to seek a declaration of their rights. This action for a declaratory judgment followed.
The second policy involved on this appeal was issued by Allstate to Judith Tantleff, Jack's mother. This policy insured Judith's personal automobile, but also provided that there would be coverage for a relative of the named insured (Judith) if that relative were charged with responsibility for and was involved in an accident while driving a nonowned automobile. However, Judith's policy also provided that: "If there is other insurance * * * the insurance with respect to a * * * nonowned automobile shall be excess insurance over any other collectible insurance".
The third policy was issued by Allstate to Jack's father, Irwin Tantleff, and was denominated an executive policy. It provided that Allstate would be responsible for and pay the "net loss in excess of insured's retained limit". The term "retained limit" was then defined as "the sum of applicable limits of underlying policies listed in Schedule A hereof and the applicable limits of any other underlying insurance collectible by the insured". The policy of insurance issued to the operator's mother, Judith, was listed in Schedule "A". Additionally, this executive policy also provided: "The insurance afforded under this policy shall apply as excess insurance, not contributory to other collectible insurance (other than insurance applying as excess to Allstate's limit of liability hereunder) available to the Insured and covering loss against which insurance is afforded hereunder".
The fourth and final policy was a "Catastrophe Policy" issued by Lumbermens to Twin County Grocers, of which One Eleven South Street Number 2, Inc., was a member. It provided for coverage in excess of "any other valid and collectible insurance available to the insured, whether such other insurance is stated to be primary, contributing, excess or contingent".
In essence, each of the last three-mentioned policies involved in the present appeal provides a form of nonprimary coverage. Allstate urges that these policies simply provide excess insurance, or secondary coverage, and thus all exist at the same level. The general rule is, of...
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