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RANGER INS. CO. v. HOME INDEM. CO.

May 29, 1990

RANGER INSURANCE COMPANY, Plaintiff,
v.
HOME INDEMNITY COMPANY, Defendant



The opinion of the court was delivered by: ASPEN

 MARVIN E. ASPEN, UNITED STATES DISTRICT JUDGE

 This matter is presently before us for decision following a bench trial we conducted on Counts II and III of the plaintiff's complaint. *fn1" These claims were brought by an excess insurance carrier, Ranger Insurance Company ("Ranger"), against a primary carrier, Home Indemnity Company ("Home"), seeking to hold Home liable for allegedly acting negligently or in bad faith in refusing to settle a tort claim within Home's policy limits on behalf of their mutual insured, Mid-States General & Mechanical Contracting Corp. ("Mid-States"), thereby unreasonably requiring Ranger to pay for the amount of a jury verdict in excess of Home's primary limits.

 I. Home's Motion for a Directed Verdict

 We first consider Home's motion for directed verdict alleging that Ranger has failed to establish evidence in its case in chief sufficient to make out a prima facie case of liability against Home based on Home's alleged negligence or bad faith. We find, however, that Ranger has presented sufficient evidence to establish a prima facie case. We therefore consider the weight of the evidence. Having reviewed all of the testimony, exhibits, and stipulations of the parties, and for the reasons stated in these findings and conclusions, we enter judgment in favor of Home on Counts II and III.

 II. Background Findings of Fact

 The following findings of fact are based on undisputed evidence and provide background for the further findings of fact and conclusions of law in Section III.

 Ranger is a corporation organized and existing under the laws of the State of Delaware and maintains its principal place of business in Houston, Texas, and is engaged in the business of insurance. Home is a corporation organized and existing under the laws of the State of New Hampshire, maintains its principal place of business in New York and is engaged in the business of insurance.

 Ranger issued its policy of insurance numbered RU453597 to Mid-States as named insured. That policy provided for commercial umbrella liability insurance. Home issued its policy of insurance numbered GL1149456 to Mid-States as named insured. That policy provided for comprehensive general liability insurance on a primary basis with an effective policy period from May 31, 1981 to May 31, 1982, with a liability limit of $ 500,000 per occurrence.

 ADM eventually settled the entire case with Hall for $ 1,500,000, plus indemnity for the payment of the outstanding worker's compensation lien. ADM then pursued a contribution claim against Mid-States and Corrigan before a jury, which determined the parties' share of contribution on January 17, 1985. Mid-States was determined to have been 48% liable and a final judgment was entered in favor of ADM and against Mid-States for $ 788,989 on January 29, 1985.

 The Appellate Court of Illinois, 4th District, reversed the judgment of the trial court on April 7, 1986. The decision is reported at 142 Ill. App. 3d 200, 491 N.E.2d 879, 96 Ill. Dec. 600. The Supreme Court of Illinois on May 18, 1988 reversed the Appellate Court and reinstated the judgment entered on the jury's verdict. That decision is reported at 122 Ill. 2d 448, 524 N.E.2d 586, 120 Ill. Dec. 556.

 On June 1, 1988, Ranger paid $ 288,989 to ADM, which equalled the amount of the judgment in excess of the Home policy limit.

 The persons involved in this litigation are as follows. Barry Montgomery was counsel for ADM, Grady Holley was counsel for Mid-States and Rick Velde was counsel for Corrigan. Paul Patton was Home's claims supervisor on the Mid-States file. Jack ...


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