United Services Auto. Ass'n v. Empire Fire and Marine Ins. Co.
| Decision Date | 26 October 1982 |
| Docket Number | No. 1,CA-CIV,1 |
| Citation | 134 Ariz. 64,653 P.2d 712 |
| Parties | UNITED SERVICES AUTOMOBILE ASSOCIATION, a Texas corporation, Plaintiff-Appellant, v. EMPIRE FIRE AND MARINE INSURANCE COMPANY, a Nebraska corporation, Defendant-Appellee. 5531. |
| Court | Arizona Court of Appeals |
This case raises an issue of whether a loss should be apportioned among two insurers. The resolution turns on the construction and purposes of the policies. The case grows out of an automobile collision between a car driven by Robert Richards and another driven by Augustus Turner. The car driven by Richards was owned by one Roger Anderson and was a scheduled vehicle under two liability policies, one issued by Security Mutual Casualty Co. which provided primary coverage on the vehicle up to $50,000 and the other issued by Empire Fire and Marine Insurance Company which provided excess coverage up to $250,000 after the underlying Security Mutual policy was exhausted.
At the time of the accident Robert Richards was also insured under a policy issued to his father by United States Automobile Association (USAA). This policy, which has a $100,000 limit, provided coverage to Richards when he was driving a non-owned automobile.
Augustus Turner brought an action against Richards for personal injury and wrongful death and the suit was settled for $135,000. Security Mutual, conceding that it was the primary insurer, paid $50,000, the limits of its policy. There was an understanding between all parties that a declaratory judgment action would be filed to determine the relative liabilities of USAA and Empire for the balance of the settlement. The action was filed and the trial court granted Empire's motion for summary judgment thereby determining that there was a hierarchy of coverage in which Empire was excess to USAA. This appeal ensued.
USAA contends that each policy in question provides that it is excess to any other insurance, that the policies therefore conflict and that as a result the loss should be apportioned among the two insurers according to the respective policy limits. The clause in its policy which USAA relies on reads as follows:
... the insurance with respect to a ... non-owned automobile shall be excess insurance over any other valid and collectible insurance.
Empire, on the other hand, argues that the policies are not inconsistent because by its terms its policy does not come into effect until deductions for all other insurance have been made. According to Empire this renders its policy a "contingent excess" policy secondary to USAA's. The clause Empire relies on reads as follows:
"Loss" means the sums paid in settlement of claim or satisfaction of judgment as damages for which the insured is liable, after making deductions for all other recoveries, salvages and other insurances (other than the amounts payable under the Primary Insurance) whether recoverable or not, and shall exclude all expense and all costs.
We observe at the outset that there are a multitude of cases from many jurisdictions which wrestle with the problems and conflicts created by the existence of concurrent insurance policies and so-called "other insurance" or "excess insurance" clauses. The cases are difficult to interpret and in some instances impossible to reconcile.
We conclude that the insurers need not apportion the loss and that USAA must first contribute up to its policy limits to satisfy the settlement. Since this, together with the contribution of the primary insurer, will discharge the obligation, Empire's policy does not come into play.
We start with a basic tenet of Arizona law that in construing and interpreting insurance contracts, the intention of the parties should control. Dairyland Mutual Insurance Co. v. Andersen, 102 Ariz. 515, 433 P.2d 963 (1967). Where the conflicting other-insurance clauses are truly inconsistent they may be...
To continue reading
Request your trial
-
State Farm Fire and Cas. Co. v. LiMauro
...decisions that are "difficult to interpret and in some instances impossible to reconcile" (United Servs. Auto Assn. v. Empire Fire & Mar. Ins. Co., 134 Ariz. 64, 65, 653 P.2d 712, 713). It has also produced an expression of surprise that the courts, rather than the insurance industry's arbi......
-
St. Paul Fire and Marine Ins. Co. v. Gilmore
...for Gilmore if she had been personally uninsured at the time of the accident. Cf. United Services Auto. Ass'n v. Empire Fire & Marine Ins. Co., 134 Ariz. 64, 66, 653 P.2d 712, 714 (Ct.App.1982) ("Under no set of circumstances can Empire's coverage ever be primary The second sense in which i......
-
Great Divide Ins. Co. v. Lexington Ins. Co.
...policy, and therefore must be exhausted before a "true excess" policy is triggered. See, e.g., United Servs. Auto. Ass'n v. Empire Fire & Marine Ins. Co., 134 Ariz. 64, 66, 653 P.2d 712 (1982) ; Illinois Emcasco Ins. v. Continental Cas. Co., 139 Ill.App.3d 130, 133–134, 93 Ill.Dec. 666, 487......
-
Monroe Guar. Ins. Co. v. Langreck
...Allstate Ins. Co. v. Employers Liab. Assurance Corp., 445 F.2d 1278, 1283-84 (5th Cir.1971); United Services Auto. Ass'n v. Empire Fire & Marine Ins. Co., 134 Ariz. 64, 653 P.2d 712, 714 (1982); Allstate Ins. Co. v. Frank B. Hall & Co., 770 P.2d 1342, 1347 (Colo.Ct.App.1989); Aetna Cas. & S......
-
CHAPTER 14
...a different and probably a greater risk than that covered by the [umbrella] polic[ies].” USAA v Empire Fire & Marine Ins. Co., 134 Ariz. 64, 66; 653 P.2d 712 (1982). This policy would have provided primary coverage if the Continental policy did not or if an owned vehicle was involved in the......