Utica Mut. Ins. Co. v. Coastal Marine, Inc., Civ. A. No. 80-4644.
| Decision Date | 04 February 1984 |
| Docket Number | Civ. A. No. 80-4644. |
| Parties | UTICA MUTUAL INSURANCE COMPANY, Mutual Marine Office, Inc. v. COASTAL MARINE, INC., Hartford Insurance Company Mid-Continent Underwriters, Inc. |
| Court | U.S. District Court — Eastern District of Louisiana |
Donald L. King, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., for plaintiff.
Harvey L. Strayhan, Sessions, Fishman, Rosenson, Boisfontaine & Nathan, New Orleans, La., for Mid-Continent Underwriters, Inc.
Steven M. Lozes, Lozes & Lozes, New Orleans, La., for Hartford Ins. Co.
The original suit of Ronald Lee Porter v. Pipelines, Inc. and Coastal Marine, Inc., No. 74-230, was tried by a jury on August 18, 1975, with a verdict in favor of plaintiff of $175,500. After the jury found that both Pipelines and Coastal were negligent, the Court found, as a matter of law, that Pipelines, Inc., was entitled to indemnification from Coastal Marine. A judgment to this effect was signed on October 5, 1976, granting Pipelines, Inc. full indemnification from Coastal Marine for the amount of the judgment plus maintenance and cure paid to the plaintiff. By a supplemental judgment dated October 14, 1977, the Court added to this judgment, the attorney's fees and expenses of defending the suit. On appeal to the Fifth Circuit Court of Appeals, the judgment of the District Court was affirmed in all respects on December 10, 1981.
The present complaint arises out of the marine insurance coverages of Coastal Marine, Inc. that were in effect on or about December 29, 1973, the date when Porter was insured. At that time, the assured, Coastal Marine, Inc., had policies of marine insurance procured through Mid-Continent Underwriters, Inc. (herein referred to as MCU), which held itself out to be a "managing general agent." Hartford Insurance Company had the "primary layer" of insurance coverage, with limits of $100,000.00. Utica Mutual Insurance Company had the "excess" coverage over $100,000.00.
After the institution of the original suit, Coastal Marine's primary insurer, Hartford Insurance Company, and their attorneys assumed and retained sole control of the defense of the matter for Coastal Marine, Inc. MCU undertook the obligation as representative of the excess insurer (plaintiffs), to keep plaintiffs advised of the progress of and developments in the Ronald L. Porter litigation. Utica Mutual alleges that it was misled by Hartford and MCU that Utica's excess policy would not be involved and that they had no real exposure in the Porter case. Utica alleges that the defendant, Hartford Insurance Company, (a) failed to adequately evaluate and investigate Porter's claim; (b) failed to inform plaintiffs of the seriousness of Porter's injuries and the potential for judgment in excess of the primary policy; (c) failed to advise plaintiffs of the progress and, in fact, of the outcome of the suit; (d) failed in their obligation to attempt to settle within the policy limits; (e) failed to disclose other relevant facts to the plaintiffs; and (f) failed to discharge their obligation to defend, which included the obligation to appeal the judgment, which their counsel recommended.
Utica also alleges that defendant, Mid-Continent Underwriters, as agent and representative of the plaintiffs: (a) violated its fiduciary duty to the plaintiffs; (b) failed to keep the plaintiffs fully informed of all facts it knew or should have known were material to the plaintiffs; (c) failed to keep itself adequately informed of the facts and circumstances of the case, the progress of the litigation and the possibility of settlement; and (d) actually misled the plaintiffs with regard to the entire matter.
Utica alleges that it did not learn of the severity of the injuries to Ronald Lee Porter or of the seriousness of the liability exposure until after the jury had returned a verdict in favor of Mr. Ronald Lee Porter in the amount of $175,500.00. In order to settle with Ronald Lee Porter and with full reservation of rights against defendants herein, Utica advanced approximately $65,000.00 towards a $165,000.00 settlement with Mr. Porter.
On the other hand, Hartford denies that it breached any duties owed to plaintiffs herein, Utica Mutual and Mutual Marine Office, Inc., its Manager. Hartford suggests that upon receipt of notice of the claim, it promptly began its investigation by statementizing witnesses and forwarding the lawsuit to competent counsel. As periodic status reports were requested from excess carriers' representatives, Mid-Continent Underwriters, Inc., status reports were forwarded to MCU for ultimate transmission to Utica Mutual.
As trial approached, Hartford had received no settlement demands less than $300,000.00 and upon the advice of counsel, trial on the matter was commenced. Excess carriers, Utica Mutual, were advised that trial would be necessary in this case in view of the excessive settlement demand of $300,000.00. After trial on the merits, the jury rendered a verdict of $175,500.00 and found both Pipelines and Coastal negligent.
Excess carriers were notified at the conclusion of trial of the fact that judgment was entered over the amounts of Hartford's policy limits, but that in view of the fact that two defendants had been cast, the judgment was still within the policy limits of Hartford, subject to the final determination of the cross-claim of Pipelines against Coastal.
After Porter refused Hartford's attempts to settle Coastal's liability separately for $87,500.00, Hartford awaited entry of judgment by the Court on the cross-claim issue. The trial court then issued its proposed findings of fact, and after discussing further settlement possibilities with Porter's attorney, counsel for Hartford finally recommended (1) that the case be settled for $164,000.00 subject to the approval of the excess carrier, and (2) that an appeal not be taken, since the settlement amount represented a savings of approximately $35,000.00 over the total judgment, including costs and interest at that time.
Defendant, Mid-Continent Underwriters, Inc., takes the position that it is not obligated in any manner to Utica for the damages sued upon. Further, that when it gratuitously remitted information to plaintiff pertaining to the progress of the Porter litigation, no obligation was assumed or created thereby.
In conclusion, MCU submits that if any entity had an obligation to keep itself apprised of the status of the Porter litigation, it would have been Utica Mutual Insurance Company under its excess policy of insurance. Unfortunately, Utica did not bother to contact the primary insurer or its counsel directly requesting updated status reports subsequent to the trial, although it had been advised that said trial had taken place. MCU claims that this failure of plaintiff to keep itself adequately informed constitutes fault on the part of Utica Mutual, which bars recovery in the premises of this litigation.
The duties of an insurer in Louisiana are outlined in Cousins v. State Farm Mutual Auto Insurance Co., 294 So.2d 272 at 275 (writs refused La.App.1974) as follows:
To continue reading
Request your trial
-
Great Southwest Fire Ins. Co. v. CNA Ins. Companies
...follow them. Insurance Company of North America v. Home Insurance Co., 644 F.Supp. 359 (E.D.La.1986); Utica Mutual Insurance Co. v. Coastal Marine, Inc., 578 F.Supp. 1376 (E.D.La.1984)." Laper v. Board of Com'rs., 523 So.2d 926, at page 928 (La.App. 4 Cir.1988), writ den., 531 So.2d 275 The......
-
Laper v. Board of Com'rs of Port of New Orleans
...follow them. Insurance Company of North America v. Home Insurance Co., 644 F.Supp. 359 (E.D.La.1986); Utica Mutual Insurance Co. v. Coastal Marine, Inc., 578 F.Supp. 1376 (E.D.La.1984). The allegations of the third party petition, taken as true, fail to state a cause of action recognizable ......
-
St. Paul Ins. Co. of Bellaire, Texas v. AFIA Worldwide Ins. Co.
...carrier in the representation of a common insured. See Southern American, 498 So.2d at 282 (citing Utica Mutual Insur. Co. v. Coastal Marine, Inc., 578 F.Supp. 1376 (E.D.La.1984)). Despite this apparent conflict, the trial court relied on the more recent decision in Laper and found no duty,......
-
Pacific Employers Ins. Co. v. United General Ins.
...Civil Law Treatise: Insurance Law and Practice, 221, at 405-407 (1986).) The Court does note the decision in Utica v. Coastal Marine, 578 F.Supp. 1376 (E.D.La.1984).1 Does the primary insurer owe a settlement duty to the excess insurer? Counsel for Claims Management, apparently confident of......
-
Coercive Letter Regarding Approval of Acceptance of Tortfeasor's Policy Limits
...See United States Fire Ins. Co. v. Royal Ins. Co., 759 F.2d 306 (3rd Cir. 1985); and Utica Mut. Ins. Co. v. Coastal Marine, Inc., 578 F. Supp. 1376 (E.D. La. 1984) for cases relating to the duty of an insurance company to exercise good You have been provided with the statements of two indep......