Doe Run Resources V. Fidelity Case Study
No Contribution Required Of Excess Insurer Where It Did Not Consent To Settlement
In February, the California Court of Appeal ruled in Doe Run Resources Corp v. Fidelity & Casualty Co. of New York that an excess insurer did not have to contribute to the settlement where the insured failed to obtain its consent before signing the settlement agreement.
The case involved a complaint filed in 2001 by residents of Herculaneum, Missouri alleging that the defendant mining-company, Doe Run’s, lead and cadium smelting operations caused environmental damages.
Doe Run’s primary insurer, Zurich Insurance Co., defended Doe Run under a reservation of rights.
Fidelity & Casualty
A three-judge panel of the 4th District California Court of Appeal affirmed a judgment against the mining company, saying the excess insurer was not invited to a mediation session or asked to approve the resulting class-action settlement.
Doe Run's primary insurer, Zurich Insurance Co., defended the Doe Run under a reservation of rights. Excess insurer Fidelity & Casualty Co. of New York, did not join in the defense of Doe Run. In the course of litigation, Doe Run’s attorneys notified Fidelity of a scheduled mediation, but did not invite Fidelity to attend the mediation. During mediation, the parties reached a settlement for $55 …show more content…
Sweeney (2002) 68 S.W. 3rd, in which it was held that an policyholder who settles without first seeking consent of the insurer forfeits coverage. By entering into a settlement without the insurer’s consent, the insurer is foreclosed “from the 'opportunity' of disputing the amount of the damages.” The Court further held that the letter sent to Fidelity notifying of the mediation was insufficient warning to the insurer that it may need to approve a settlement because it offered “no estimate of the probabilities of settlement”, and more so, failed to provide the location of the
In February, the California Court of Appeal ruled in Doe Run Resources Corp v. Fidelity & Casualty Co. of New York that an excess insurer did not have to contribute to the settlement where the insured failed to obtain its consent before signing the settlement agreement.
The case involved a complaint filed in 2001 by residents of Herculaneum, Missouri alleging that the defendant mining-company, Doe Run’s, lead and cadium smelting operations caused environmental damages.
Doe Run’s primary insurer, Zurich Insurance Co., defended Doe Run under a reservation of rights.
Fidelity & Casualty
A three-judge panel of the 4th District California Court of Appeal affirmed a judgment against the mining company, saying the excess insurer was not invited to a mediation session or asked to approve the resulting class-action settlement.
Doe Run's primary insurer, Zurich Insurance Co., defended the Doe Run under a reservation of rights. Excess insurer Fidelity & Casualty Co. of New York, did not join in the defense of Doe Run. In the course of litigation, Doe Run’s attorneys notified Fidelity of a scheduled mediation, but did not invite Fidelity to attend the mediation. During mediation, the parties reached a settlement for $55 …show more content…
Sweeney (2002) 68 S.W. 3rd, in which it was held that an policyholder who settles without first seeking consent of the insurer forfeits coverage. By entering into a settlement without the insurer’s consent, the insurer is foreclosed “from the 'opportunity' of disputing the amount of the damages.” The Court further held that the letter sent to Fidelity notifying of the mediation was insufficient warning to the insurer that it may need to approve a settlement because it offered “no estimate of the probabilities of settlement”, and more so, failed to provide the location of the