CONTRACTUAL INDEMNITY AGREEMENTS TRUMP OTHER INSURANCE CLAUSES (SHIFTING AN ENTIRE LOSS TO A PARTICULAR INSURER)

CONTRACTUAL INDEMNITY AGREEMENTS TRUMP OTHER INSURANCE CLAUSES (SHIFTING AN ENTIRE LOSS TO A PARTICULAR INSURER) FRED A. SIMPSON 1 AND RANDALL L. SMITH 2 Companies doing business together frequently insure common business risks under more than one liability policy. Where this exists, insurers dispute which of their policies must pay claims for losses. Indemnity clauses in commercial contracts (such as the example below) may resolve those disputes by placing total liability for damages on the insurer for only one party. In order to explain how that loss-shifting works, it is first necessary to consider a typical indemnity clause, along with (1) the form of other insurance clauses in contemporary liability insurance policies, and (2) how each of the equitable doctrines of subrogation and contribution operate. Example Indemnity Clause [ABC Company] shall protect, defend, hold harmless and indemnify [XYZ Company] from and against any and all claims [and] actions... arising out of any actual or alleged death or injury to any person... or other damages or losses, by whomsoever suffered, resulting or claimed to result in whole or in part from any actual or alleged defect in [ABC Company s] merchandise... [ABC Company] agrees to save [XYZ Company] harmless and indemnified from all claims, liability, losses, damages and expenses, including reasonable attorneys fees, sustained from the purchase, use or sale of any goods or from breaches of any guaranties or warranties hereunder, and such 1 Fred A. Simpson is a partner in the firm of Jackson Walker L.L.P., Litigation Section, Houston, Texas, specializing in appellate law and insurance matters, mediation, and arbitration. 2 Randall L. Smith, a sole practitioner in Houston, authored DUTY TO DEFEND AN INSURANCE GUIDE (Texas Lawyer Press 2000).

obligations shall survive acceptance of goods and payments therefor by [XYZ Company]. 3 Here, ABC promises to indemnify and hold XYZ harmless from losses arising from XYZ s sale of ABC s merchandise. But ABC may have products liability insurance under which both ABC and XYZ have coverage (XYZ by way of a vendor s endorsement or otherwise), and XYZ may also have its own independent insurance coverage for any liability XYZ may incur from selling ABC s products. Other Insurance Clauses Although the potential for duplicate coverages for a single loss exists in certain situations, insurers deal with unintended duplications and possible unjust enrichment by their insureds by placing other insurance clauses in their policies. These clauses attempt to control the manner in which each insurer shares in covered losses by denying multiple recoveries by their insureds for the same loss. 4 Typical other insurance clauses are in the form of excess other insurance provisions 5 designed to cause all other primary insurance policies covering the same risk to be classified as excess to the policies in which the clauses appear. Frequently, the same form of other insurance clause appears in each policy, ostensibly making each policy excess to all others. 6 Courts tend to cancel out those conflicting clauses, however, and prorate losses among the insurers on grounds that the insureds would otherwise be unfairly deprived of the insurance protection for which they bargained. 7-2 -

Subrogation & Contribution In the absence of contracts between or among insurers, two forms of inter-insurer claims arise, one from principles of subrogation, the other from principles of contribution. Although the doctrines of subrogation and contribution are both equitable remedies, they are different. 8 Subrogation substitutes one person in place of another, succeeding to the rights of the other in relation to a debt or claim. 9 The subrogee, or substituted person, succeeds to the subrogor s rights against the obligor, or person primarily liable. 10 Equitable subrogation is a broad enough doctrine to include every instance in which one person, (not acting as a mere volunteer or intruder), honors a duty to pay the debt for which another is primarily liable, and which in equity and good conscience should have been discharged by that obligor. 11 The law of insurance subrogation allows insurers to assume their insureds positions in order to recover from third parties who are legally responsible for losses the insurers paid. 12 Subrogation rights are purely derivative, meaning insurers acquire nothing more than their insureds prior rights. 13 Insurers entitled to subrogation are therefore stepping into the shoes of their insureds, subject to the same defenses that primary obligors may assert against those insureds. 14 On the other hand, equitable contribution is the right to recover from someone who has joint responsibility for the same liability as the party who seeks recovery. 15 In the insurance context, contribution rights arise when several insurers independently (and unknowingly) agree to indemnify (or to defend) the same loss or claim, and one insurer - 3 -

pays more than its share (or one insurer is unduly burdened by defending an underlying lawsuit). 16 When the complaining insurer undertakes to pay claims of a common insured, (or to defend) that insurer has standing to assert a cause of action for equitable contribution against each coinsurer, 17 permitting the insurer who paid too much to seek proportionate reimbursement from each coinsurer. 18 This is accomplished on a theory that the debt, concurrently owed by all, should be shared accordingly to each insurer s coverage of the risk. 19 Equitable contribution accomplishes substantial justice by equalizing the common burden, thereby preventing one insurer from profiting at the expense of others. 20 Dilemma Assume the following facts. Capital manages Tower Apartments, owned by Johnson. The Capital-Johnson management agreement contains an indemnification clause whereby Johnson, the owner, agrees to indemnify Capital, the manager. A Tower tenant who is seriously injured when Tower s roof collapses sues Capital as the property manager for negligence. Capital is insured against such third-party claims under a commercial general liability ( CGL ) policy issued by American Insurance. Capital is also automatically insured under a CGL policy written for Johnson by Great Insurance by virtue of a policy provision covering property managers. Both CGL policies have identical other insurance clauses. Great Insurance steps forth to defend Capital, but American denies coverage for Capital because Johnson has contractually assumed all ultimate responsibility for any loss. Great Insurance then settles the claim and sues American. - 4 -

Gridlock! Great Insurance focuses on two other insurance clauses, arguing that both policies insure the same risk at the same coverage level and that Great Insurance has an equitable contribution claim against American Insurance. On the other side, American, which issued the policy to Capital, focuses on the indemnity clause of the management agreement, claiming rights to subrogation against Johnson that Great Insurance must honor. American argues that these subrogation rights mean that American should not have to pay a dime until the Great Insurance policy limit is exhausted. Solution The cases show how courts value the commercial bargaining that took place between the contracting parties, holding that indemnity agreements are part of the total exchange of consideration. Accordingly, one equitable principle prevails where courts decide if indemnification rights should control over insurance contracts terms: each involved insurance company accepted premiums knowing that claims might arise from their insureds business dealings. Under those circumstances, an apportionment of losses under other insurance clauses would unfairly bypass indemnity agreements and wrongfully impose liability on indemnitees insurers by ignoring the commercial bargaining between the parties. 21 For example, in J. Walters Constr., Inc. v. Gilman Paper Co., 22 Walters agreed to construct facilities for Gilman. An injured Walters employee sued Gilman for negligence. 23 Gilman eventually settled, then sued Walters, alleging that the Walters/Gilman contract compelled Walters to buy insurance coverage that designated - 5 -

Gilman as an insured. 24 Walters also agreed to hold Gilman harmless from injuries arising out of the construction activity. 25 Walters bought insurance from CNA which fully covered the injured employee s claim, and Gilman had separate coverage from Liberty Mutual. 26 Gilman claimed that CNA s policy was intended to cover all losses and that CNA should reimburse Gilman for the settlement. 27 Walters and CNA argued that, although the CNA policy did cover all claims arising from Walters work, and while the parties may have intended that the CNA policy would cover any bodily injury claims made by Walters employees, CNA was nevertheless responsible for only half of the settlement amount because Liberty Mutual s policy covered the same claim. 28 The court resolved the issue by allowing the indemnity clause of the Walters/Gilman contract to prevail over the two other insurance clauses. 29 Another example of commercial contract clauses trumping insurance policy clauses appears in Rossmoor Sanitation, Inc. v. Pylon, Inc. 30 Pylon contracted with Rossmoor for sewer construction, with Pylon agreeing to indemnify and hold Rossmoor harmless for all property damage or personal injury claims. Two Pylon employees were killed when a trench caved-in. Rossmoor was held liable. 31 Rossmoor and its insurer, Insurance Company of North America (INA), claimed indemnity from Pylon and its insurer, U.S. Fire. 32 U.S. Fire counterclaimed, seeking relief from INA under the other insurance clauses of the two policies. 33 The trial court found that Pylon, the indemnitor, was negligent and Rossmoor, the indemnitee, was not actively negligent. 34 Therefore, Pylon had to indemnify Rossmoor under the indemnity agreement. 35-6 -

The California Supreme Court affirmed, reasoning that INA was subrogated to Rossmoor s rights to Pylon s indemnity (and recovery from U.S. Fire) in satisfaction of the judgment against Rossmoor. 36 The California Supreme Court reasoned that one [compelling] factor was the parties bargaining that Pylon would bear the entire costs of its negligent conduct, and for Rossmoor to be relieved of any liability where Rossmoor was not actively negligent. 37 American Indem. Lloyds v. Travelers Prop. & Cas. Co. 38 involved a contract between Elite Masonry and Caddell Construction Company, under which Elite provided masonry services in the construction of a prison. The contract contained this indemnity clause: [Elite shall] indemnify [Caddell] against and hold [Caddell] harmless from any and all claims, demands, liabilities, losses, expenses, suits and actions (including attorneys fees) for or on account of any injury to any person...which may arise (or which may be alleged to have arisen) out of or in connection with the work covered by this Subcontract, even though such injury...may be (or may be alleged to be) attributable in part to negligence or other fault on the part of [Caddell] or its officers, agents or employees. 39 Additionally, although Elite Masonary was obliged to indemnify and hold Caddell harmless, that obligation shall not be enforceable if, and only if, it be determined by judicial proceedings that the injury... complained of was attributable solely to the fault or negligence of [Caddell], or its officers, agents or employees. 40 Elite also agreed to defend all claims, suits and actions against [Caddell]... on account of any injury and to... reimburse [Caddell] for all expenses, including reasonable attorney's fees, - 7 -

incurred by reason of such claim, suit or action or incurred in seeking indemnity or other recovery from [Elite] hereunder. 41 An injured Elite employee sued Elite and Caddell. Travelers insured Caddell under a CGL policy. 42 American Indemnity insured Elite. American Indemnity defended both Caddell and Elite, and settled the lawsuit. American then sued Travelers seeking one-half of the settlement American paid. 43 American argued that the other insurance clauses of both policies compelled each insurer to pay an equal share of the settlement and defense costs. 44 The court rejected this argument, concluding that valid indemnity agreements are given priority over the other insurance policy clauses, stating: To hold otherwise would render the indemnity agreement between Elite and Caddell completely ineffectual, for it is the parties rights and liabilities to each other which determine the insurance coverage; the insurance coverage does not define the parties rights and liabilities one to the other. 45 In Chubb Ins. Co. of Canada v. Mid-Continent Cas. Co., 46 Smith Brothers, Inc. contracted to perform workover operations on an oil well operated by Coho Resources, Inc. 47 Smith Brothers workover rig overturned, injuring one person and killing another. Coho was sued for damages totaling $5.5 Million. 48 Chubb insured Coho under a liability insurance policy with a $1 Million limit of liability, and Mid-Continent insured Smith Brothers with primary coverage under a liability insurance policy with a $1 Million limit. 49 Chubb assumed Coho s defense and asked Smith Brothers to defend and indemnify Coho pursuant to Smith Brothers indemnity obligation in the contract - 8 -

between Coho and Smith Brothers. 50 Mid-Continent defended Coho, agreeing that Smith Brothers indemnity obligation was covered. But Mid-Continent claimed that Chubb shared that indemnity obligation equally by virtue of other insurance clauses in each policy. 51 Chubb filed this action seeking adjudication that Mid-Continent s policy was primary. 52 Chubb recognized that Smith Brothers specifically contracted to defend and indemnify Coho for the kinds of claims asserted against Coho by the injured parties. Therefore, argued Chubb, Mid-Continent, as Smith Brothers insurer, must defend and indemnify Coho. 53 The court agreed with Chubb, because to hold otherwise would render the indemnity agreement between Smith Brothers and Coho completely ineffectual. 54 Smith Brothers and Coho s rights and liabilities to each were factors that determined coverage. The Coho/Smith Brothers agreement defined their respective rights and liabilities, not the insurance policy provisions. 55 What If Excess Coverage Is Involved? As a general rule, only insurers at the same level of coverage may seek contribution from other insurers. 56 In other words, primary insurers have no rights to contribution from excess insurers, or vice versa. 57 However, where different insurers cover different liabilities, either class of insurers may seek reimbursement under principles of subrogation rather than contribution. 58 For example, in St. Paul Fire & Marine Ins. Co. v. American Int l Specialty Lines Ins. Co., 59 VMS Lansdowne ( VMS ) and Benchmark Management Co. ( Benchmark ) entered a Management Agreement ( MA ) for VMS s resort, with Benchmark becoming the resort s operator. 60-9 -

Under the MA, VMS indemnified Benchmark and its agents for damages from ordinary negligence, and Benchmark indemnified VMS for damages from grossly negligent conduct, fraud, or willful conduct. 61 VMS provided primary and excess comprehensive general liability insurance with policies from CNA Casualty Co. ( CNA ) and American International Specialty Lines Insurance Company ( AISLIC ). 62 VMS was the named insured on policies that covered Benchmark as VMS s real estate manager. A named insured endorsement on CNA s policy showed both the resort and a VMS subsidiary as additional insureds. 63 Benchmark and its subsidiary were covered by St. Paul and TIG Insurance Company ( TIG ), with St. Paul providing $1 Million of primary coverage, 64 and TIG s umbrella policy providing another $10 Million. All policies contained other insurance clauses. 65 Coverage looked like this: Insurers CNA- Primary- $1Million AISLIC- Excess- $50Million ST. PAUL- Primary - $1Million TIG - Excess- $10Million Insureds VMS (property owner) VMS s subsidiary. Landsdowne Resort BENCHMARK (as manager) BENCHMARK s subsidiary A resort patron suffered food poisoning and sued both the property owner and manager. 66 The lawsuit settled for $4 Million, of which St. Paul and CNA paid $3 Million, reserving their rights to resolve issues of coverage and allocation. 67 St. Paul then sued CNA, AISLIC, and TIG, claiming that St. Paul s policy covered none of the - 10 -

damages. 68 The trial court dismissed AISLIC and ordered TIG to pay the remaining $1 Million, 69 finding the St. Paul/TIG line of coverage existed only if the CNA/AISLIC coverage lapsed or was exhausted. 70 It was undisputed that Benchmark was covered under the CNA/AISLIC line because Benchmark was VMS s real estate manager. The court concluded that the St. Paul and TIG policies did not cover Benchmark s settlement liability. 71 Benchmark s subsidiary was not covered under any provisions in the CNA and AISLIC policies because it was not listed by name in the CNA and AISLIC policies. 72 The court also found that St. Paul and TIG were the Benchmark subsidiary s primary and excess insurers, and thus were obligated to contribute. 73 The court then allocated settlement among the insurers, which exhausted CNA s and St. Paul s policy limits. AISLIC and TIG were concurrent excess insurers, so the remaining $2 million was divided between them. 74 On appeal, AISLIC argued that the settlement should be divided three ways: between (1) VMS, (2) Benchmark, and (3) Benchmark s subsidiary, because the sole basis for liability asserted by the tort plaintiff against those defendants was ownership of the resort. 75 However, the complaint actually claimed that Benchmark and its subsidiary were liable because (a) Benchmark s subsidiary employed the persons who prepared the food and (b) Benchmark employees sold the food. 76 AISLIC argued that VMS, as the collective owner, should only be assigned one share of the settlement liability, 77 while Benchmark s subsidiary, the employer, should pay one share, and Benchmark, as operator, should pay one share. 78 AISLIC also argued that, because all four policies contained other excess insurance clauses, the court could not consider the St. Paul/TIG - 11 -

line of coverage and the CNA/AISLIC line of coverage superior to each other, the clauses were mutually repugnant, 79 requiring an equal division between the two lines of coverage. Thus, AISLIC argued that the court should divide Benchmark s liability between the two lines of insurance coverage, and for the same type of allocation for Benchmark s subsidiary, which was covered by all four insurance polices. 80 St. Paul asserted that CNA and AISLIC must pay first to satisfy the settlement because the MA requires VMS s subsidiary to indemnify Benchmark, as the operator, and Benchmark s subsidiary, as Benchmark s agent, for their share of the settlement. 81 St. Paul cited cases where the courts gave priority to indemnification agreements, which bound insureds in assessing obligations of insurers. 82 These cases held that indemnity agreements may shield the insurers of indemnitees from liability for covered losses, even though the policies contain other insurance clauses. 83 The court of appeals chose to follow the Eighth Circuit in Wal-Mart Stores, Inc. v. RLI Ins. Co. 84 In Wal-Mart, the Eighth Circuit allowed an enforceable indemnification agreement to determine the allocation of liability in an insurance dispute. 85 Wal-Mart entered a vendor's agreement with Cheyenne, a distributor of halogen lamps 86 that Wal-Mart sold in its stores. That agreement contained the following indemnity clause: [Cheyenne] shall protect, defend, hold harmless and indemnify [Wal-Mart] from and against any and all claims [and] actions... arising out of any actual or alleged death or injury to any person... or other damages or losses, by whomsoever suffered, resulting or claimed to result in whole or in part from any actual or alleged defect in [Cheyenne s] merchandise... [Cheyenne] agrees to save [Wal-Mart]... harmless and indemnified from all claims, liability, losses, damages and expenses, including reasonable attorneys fees, sustained from the purchase, use or sale of any goods or - 12 -

from breaches of any guaranties or warranties hereunder... and such obligations shall survive acceptance of goods and payments therefore by [Wal-Mart]. 87 A malfunctioning lamp caused a fire and Wal-Mart and Cheyenne were both sued. 88 St. Paul insured Cheyenne and Wal-Mart under a primary policy with limits of $1 Million. 89 RLI provided excess insurance coverage of $10 Million. 90 Wal-Mart had its own $10 Million policy with National Union, but National Union s policy did not cover Cheyenne. 91 RLI s policy was also excess over National Union s policy. The insurance structure looked like this: Insurers NATIONAL UNION - $10Million ST. PAUL- Primary $1Million RLI-Excess - $10Million Insureds WAL-MART CHEYENNE WAL-MART When the underlying lawsuit settled for $11 million, St. Paul paid the first $1 Million, but payment of the remaining $10 Million was disputed. 92 RLI finally paid the $10 Million, reserving rights to recover from Wal-Mart and National Union. 93 Subsequently, Wal-Mart and National Union sought declaratory relief to avoid paying any part of the settlement. RLI argued that the Wal-Mart/Cheyenne agreement controlled apportionment among Wal-Mart s and Cheyenne s insurers. 94 RLI claimed excess insurer status over National Union, entitling RLI to contribution from National Union for all or part of the $10 Million RLI paid. 95 Before the court of appeals allocated payment of the settlement, the court gave priority to the indemnity agreement, holding that neither Wal-Mart nor National Union - 13 -

should pay any portion of the settlement. 96 [E]xamination of the relationships between the parties has convinced us that Cheyenne intended to and did make a valid promise to indemnify Wal-Mart for claims arising from the halogen lamps. 97 The Wal-Mart court determined that RLI provided liability insurance to Cheyenne that covers both the [tort lawsuit] settlement and Cheyenne s indemnification obligation. 98 Furthermore, consideration of the indemnity agreement reflects the intention of [and relationship between] the parties and does not unfairly prejudice the insurers. 99 The court reasoned that it was proper to consider the agreement because mak[ing] Wal-Mart or National Union liable to RLI...the anticipated result of considering the policies without consideration of the indemnification agreement...would simply be the first step in a circular chain of litigation that ultimately would end with RLI still having to pay the $10 million. 100 Cheyenne s insurers paid the entire loss, consistent with the indemnity agreement between the parties. 101 Another example of subrogation among insurers appears in Continental Cas. Co. v. Auto-Owners Ins. Co., 102 where both Fitzsimmons Service Company and Hulcher Services, Inc. contracted with Burlington Northern to perform salvage operations at the site of a train derailment. 103 Each contract had an indemnity agreement in Burlington s favor. Auto-Owners insured Fitzsimmons, and Continental insured Hulcher, both under CGL policies. 104 Pursuant to their respective Burlington contracts, Fitzsimmons and Hulcher both purchased liability policies naming Burlington as the insured, Fitzsimmons from Interstate Fire Insurance Co., and Hulcher from Pacific Insurance Co. Coverage looked like this: 105-14 -

Insurers PACIFIC (Hulcher) INTERSTATE (Fitzsimmons) AUTO- OWNERS CONTINENTAL Insured BURLINGTON FITZSIMMONS HULCHER An injured Fitzsimmons employee sued Burlington and Hulcher. 106 After all four insurers funded a settlement, Continental filed for a declaratory judgment as to which insurers must pay Burlington s portion of the settlement. 107 For reasons not shown in the reported appeal, the district court ruled that Auto-Owners and Interstate were liable for one-third and two-thirds, respectively, of Burlington s part of the settlement. Both insurers appealed. 108 The court of appeals found that Continental s policy (covering Hulcher) provided coverage for contractual indemnity claims. However, in Burlington s contract with Hulcher, Hulcher agreed to indemnify Burlington only for liability caused, in whole or in part, by the negligence of [Hulcher], therefore Hulcher was dismissed from liability by summary judgment in the underlying tort lawsuit. 109 Continental was not liable for Burlington s settlement because Burlington had no right to any indemnity from Hulcher. 110 The court also found no liability for Pacific because Pacific promised to pay Burlington for bodily injury arising out of acts or omissions which are related to or are in connection with the work described in the Declarations. 111 The policy defined the term work as work or operations performed by the contractor, and Hulcher was the contractor. 112 The policy therefore covered liabilities arising only from work that - 15 -

Hulcher performed. The court concluded that the employee s injury did not arise out of Hulcher s work. Pacific, therefore, had no duty to contribute to the settlement, there being no active negligence by Hulcher. 113 Interstate s policy covered losses associated with the injury, because Interstate s policy covered those sums that [Burlington] becomes legally obligated to pay because of bodily injury arising from operations performed by the contractor, Fitzsimmons. 114 Auto-Owners s CGL policy was designed to pay those sums that [Fitzsimmons] becomes legally obligated to pay as damages because of bodily injury. 115 Here the injury did in fact arise from Fitzsimmons s work for which Fitzsimmons promised to indemnify Burlington, the Auto-Owners policy also covered the loss. When the trial court ruled that both the Interstate and Auto-Owners policies covered the settlement, the court failed to properly consider the subrogation clause of Interstate s policy which provided that if Burlington has rights to recover all or part of any payment we [Interstate] have made under this policy, those rights are transferred to us. 116 Interstate was obviously subrogated to Burlington s claim for indemnification under Burlington s contract with Fitzsimmons. Interstate, being thus subrogated to Burlington s rights, could reach Fitzsimmons and the Fitzsimmons CGL carrier, Auto-Owners. Consequently, Auto-Owners was obliged to bear the entire loss because the insurance policy Fitzsimmons purchased obligated Auto-Owners to bear the entire loss. 117 In this case, subrogation again did the work of the other insurance clause, and the contract provisions prevailed over the insurance policy provisions. - 16 -

Conclusion In the final analysis, courts recognize the rights and obligations of parties to commercial contracts, irrespective of what insurance companies may write into their policies to avoid unjust enrichment by their insureds. Courts recognize that insurance companies are free to set their premiums for the risks they agree to assume. Therefore, in that fee-setting process, insurers should prudently assess in advance the probable scope of the risks they assume on behalf of their commercial insureds. Insured parties are then free to commercially bargain for indemnity protection with no fear of unreasonably increased insurance premiums caused by claims for losses which were contractually passed along to others. 3 See Wal-Mart Stores, Inc. v. RLI Ins. Co., 292 F.3d 583, 588 (8th Cir. 2002). For the purposes of this article, we ask readers to assume that this form of indemnity agreement satisfies requisite tests under state law to establish the validity of contractual indemnity agreements. 4 5 DONALD S. MALECKI, MALECKI ON INSURANCE 10 (No. 10, August, 1996). 5 The following is an example of an excess other insurance clause: This insurance is in excess over any of the other insurance, whether primary, or excess or contingent on any other basis. COMMERCIAL GENERAL LIABILITY POLICY HANDBOOK 51 (3d Ed. 1993 Independent Insurance Agents of Texas). 6 See Commerce & Indus. Ins. Co. v. Chubb Custom Ins. Co., 75 Cal. App.4th 739, 89 Cal. Rptr.2d 415 (1999). 7 See Travelers Cas. & Sur. Co. v. Am. Equity Ins. Co., 93 Cal. App.4th 1142, 1149-50, 113 Cal. Rptr.2d 613, 618 (2001). 8 See Eslon Thermoplastics v. Dynamic Sys., Inc., 49 S.W.3d 891 (Tex. App.--Austin 2001, no pet.). 9 See Reliance Ins. Co. v. St. Paul Fire & Marine Ins. Co., 102 Fed. Appx. 539 (9th Cir. 2004); Argonaut Ins. Co. v. Allstate Ins. Co., 869 S.W.2d 537, 541 (Tex. App.--Corpus Christi 1993, writ denied). 10 See Argonaut Ins., 869 S.W.2d at 541-42. 11 See Argonaut Ins., 869 S.W.2d at 541-42; In re Ted True, Inc., 94 B.R. 423, 424 (Bankr. S.D. Tex. 1988). 12 See Dawson v. McWilliams, 146 F.2d 38, 42-43 (5th Cir. 1944). 13 See Monk v. Dallas Brake & Clutch Serv. Co., Inc., 697 S.W.2d 780 (Tex. App.--Dallas 1985, writ ref d n.r.e.). 14 See Fort Worth Lloyds v. Haygood, 246 S.W.2d 865, 876 n.1 (Tex. 1952). - 17 -

15 See Fireman s Fund Ins. Co. v. Md. Cas. Co., 65 Cal. App.4th 1279, 1294, 77 Cal. Rptr.2d 296, 304 (1998) (explaining differences between contribution and subrogation). 16 See Employers Cas. Co. v. Transp. Ins. Co., 444 S.W.2d 606, 608 (Tex. 1969). 17 Id. at 609-10. 18 See Nat l Indem. Co. v. St. Paul Ins. Co., 150 Ariz. 458, 459, 724 P.2d 544, 544-45 (1986). 19 See United States Fire Ins. Co. v. Stricklin, 556 S.W.2d 575, 578 (Tex. Civ. App.--Dallas 1977), writ ref d n.r.e., 565 S.W.2d 43 (Tex. 1978). 20 See Nat l Indem. Co. v. St. Paul Ins. Co., 150 Ariz. 458, 459, 724 P.2d 544, 544-45 (1986). 21 See, e.g., Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal.3d 622, 532 P.2d 97, 119 Cal. Rptr. 449 (1975). 22 620 So.2d 219 (Fla. App. 1993). 23 Id. at 220. 24 Id. 25 Id. 26 Id. 27 Id. at 221. 28 Id. 29 Id. 30 13 Cal.3d 622, 532 P.2d 97, 119 Cal. Rptr. 449 (1975). 31 Id. 32 Id. 33 Id. 34 Id. at 99-100; 451-52. 35 Id. 36 Id. at 104; 456. 37 Id. 38 189 F. Supp.2d 630 (S.D. Tex. 2002). 39 Id. at 632. 40 Id. at 632-33. 41 Id. at 633. 42 Actually, Travelers predecessor, Aetna, issued the policy. 43 Id. 44 Id. at 634, quoting from Chubb Ins. Co. of Canada v. Mid-Continent Cas. Co., 982 F. Supp. 435, 438 (S.D. Miss. 997). 45 Id. 46 982 F. Supp. 435 (S.D. Miss. 1997). 47 Id. at 436. 48 Id. - 18 -

49 Id. 50 Id. 51 Id. at 437. 52 Id. 53 Id. 54 Id. 55 Id. at 437-38. 56 See, e.g., Reliance Nat l Indem. Co. v. General Star Indem. Co., 72 Cal. App.4th 1063, 85 Cal. Rptr.2d 627, 634-35 (1999). 57 See Employers Cas. Co. v. Transp. Ins. Co., 444 S.W.2d 606, 609 (Tex. 1969). 58 Id. at 610. 59 365 F.3d 263 (4th Cir. 2004). 60 Am. Int l, 365 F.3d at 266. 61 Id. at 273. 62 Id. at 266. 63 Id. 64 Id. 65 Am. Int l, 365 F.3d at 266-67. 66 Id. at 265. 67 Id. at 265-66. 68 Id. at 266. 69 Id. 70 Id. at 267. 71 Id. 72 Id. 73 Id. 74 Id. 75 Id. 76 Id. at 268-69. 77 Id. at 269. 78 Id. 79 Id. at 270. 80 Id. 81 Id. 82 Id. 83 Id. - 19 -

84 292 F.3d 583 (8th Cir. 2002). 85 Id. at 588. 86 Id. at 585. 87 Id. at 587-88. 88 Id. at 585. 89 Id. 90 Id. 91 Id. 92 Id. at 586. 93 Id. 94 Id. 95 Id. 96 Id. at 587. 97 Id. 98 Id. 99 Id. at 588. 100 Id. 101 Id. at 594. 102 238 F.3d 941 (8th Cir. 2000). 103 Id. at 943. 104 Id. 105 The reported case does not show limits of coverage by any insurer. 106 Cont l Cas., 238 F.3d at 943. 107 Id. at 944. 108 Id. There was no issue of other insurance clauses because Auto-Owners and Interstate each insured a different company. 109 Id. 110 Id. 111 Id. 112 Id. 113 Id. 114 Id. 115 Id. 116 Id. at 945. 117 Id. - 20 -