Trinity Universal v. Employers Mutual

Fifth Circuit Op.

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In Trinity Universal Ins. Co. v. Employers Mutual, the Fifth Circuit recently confronted the issue of whether the Texas Supreme Court's holding in Mid-Continent v. Liberty Mutual applies to an insurer's duty to defend an insured. In Mid-Continent, the Texas Supreme Court held that if multiple insurance policies applicable to a dispute contain "pro rata" or "other insurance" clauses and a co-primary insurer pays more than its share to settle the claim against the insured, the overpaying insurer may not seek reimbursement from an underpaying insurer under theories of contribution or subrogation. In Trinity Universal, the Fifth Circuit concluded that the "other insurance" clauses at issue did not apply to the duty to defend, noting that Mid-Continent "left open the separate question of whether a co-insurer that pays more than its share of defense costs may recover such costs from a co-insurer who violates its duty to defend a

common insured." Although the "other insurance" clause stated that any "loss" would be shared, it did not state that the duty to defend would be divided among co-primary insurers. Holding that Employers Mutual did have a duty to defend and that the co-primary insurers were not barred by the Mid-Continent rule from seeking reimbursement of defense costs, the Fifth Circuit remanded for a determination of those defense costs.

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Reference Info:Decision | Federal, 5th Circuit, Texas | United States


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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