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Gainsco Insurance Co. v. Amoco Production Co.8/19/2002
ched to the policy.
[ ] The second coverage restriction takes the form of an exclusion from the definition of "insured contract." The route to the exclusion is somewhat tortuous in that it is the equivalent of at least two double negatives. First, the policy states that it does not apply to bodily injury or property damage for which the insured's liability arises out of its contractual assumption of liability. Then, the policy excludes from that exclusion liability that is assumed under an "insured contract." Next, the policy defines "insured contract" to include those contracts under which the insured assumes the tort liability of another. Finally, in a separate endorsement, the policy contains the exclusion that is at issue in this case:
6. "Insured contract" means any written:
f. That part of any other written contract or agreement pertaining to your business under which you assume the tort liability of another to pay dama ges because of "bodily injury " or "property damage" to a third person or organization, if the contract or agreement is made prior to the "bodily injury" or "property damage." However, this insurance does not apply to that part of any contract or agreement that indemnifies any person or organization for the indemnitee's sole tort liability. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. (Emphasis in original.)
[ ] One additional issue is raised by the language of the first paragraph of the "coverages" section of the policy, in which the "insuring agreement" is defined:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury " or "property damage" to which this insurance applies. (Emphasis added.)
DISCUSSION
[ ] Before discussing the individual issues, it may be helpful first to review the separate concepts of first-party bad faith and third-party bad faith:
The duty of good faith and fair dealing which is implied by law to inhere in every insurance policy runs from the insurer to the insured. . . . Breach of this duty may give rise to a cause of action for "third party" bad faith or for "first party" bad faith. A cause of action for "third party" bad faith will lie when a liability insurer fails in bad faith to settle a third-party claim within policy limits against its insured. . . . Bad faith in this context would occur if an excess judgment were obtained under circumstances when the insurer failed "to exercise intelligence, good faith, and honest and conscientious fidelity to the common interest of the [insured] as well as of the [insurer] and give at least equal consideration to the interest of the insured." . . . A cause of action for "first party" bad faith will lie when an insurer in bad faith refuses to pay its insured's direct claim for policy benefits. . . . Bad faith in this context would occur if an insurer knowingly or recklessly denied a first-party claim for insurance benefits without having a reasonable basis for doing so. Herrig v. Herrig, 844 P.2d 487, 490 (Wyo. 1992) (quoting Fowler, 390 P.2d at 606).
[ ] Third-party bad faith, or conversely good faith, "must be determined as of the time the offer was made and rejected and that good faith [means] a bona fide belief that the insurer had a good possibility of winning the lawsuit or that the claimant's recovery in the lawsuit would not exceed the limits of the insurance policy." Fowler, 390 P.2d at 606. "The governing standard is whether a prudent insurer would have accepted the settlement offer if it alone were to be liable for the entire judgment." Betts v. Allstate Ins. Co., 154 Cal.App.3d 688, 2
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Wyoming Personal Injury Attorneys
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