Scottsdale Ins. Co. vs. Addison Ins. Co.

When Wells Trucking, Inc.’s employee was involved in an automobile accident that resulted in the death of another motorist, Wells Trucking had a primary insurance policy with United Fire & Casualty Company and an excess insurance policy with Scottsdale Insurance Company. After the decedent’s family filed a wrongful death lawsuit against Wells Trucking, Wells Trucking and Scottsdale filed suit against United Fire for bad faith refusal to settle within its policy limits. The trial court granted summary judgment for United Fire, concluding (1) an excess insurer cannot recover from a primary insurer under a claim of bad faith refusal to settle, and (2) bad faith refusal to settle could not be proven because United Fire ultimately settled the claim for its policy limits and Wells Trucking did not suffer an excess judgment. The Supreme Court reversed, holding (1) an insurer’s ultimate settlement for its policy limits does not negate the insurer’s earlier bad faith refusal to settle, and an excess judgment is not essential to a bad faith refusal to settle action; and (2) United Fire was not entitled to judgment against either Wells Trucking or Scottsdale. View "Scottsdale Ins. Co. vs. Addison Ins. Co." on Justia Law