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Unigard Mutual Insurance Co. v. Mission Insurance Co.9/22/1994
In this declaratory action, both the plaintiff, Unigard Mutual Insurance Co. (Unigard), and the defendant, Mission Insurance Co. (Mission), appeal from the judgments dismissing certain claims that each party had asserted against the other. We affirm.
Both Unigard and Mission issued liability insurance policies to the same insured, Pop Shoppes of America, Inc. (Pop Shoppes).
The Unigard policy was a primary general liability policy with a $500,000 limit. Under its terms, both Pop Shoppes and "its division, subsidiary or affiliated companies" were designated as insureds. Likewise, any person using any automobile "owned, hired, or borrowed" by any named insured was also considered to be an insured under that policy. However, no person using an automobile which had been hired or borrowed from an employee or from any member of an employee's household was covered by the terms of the Unigard policy.
This policy provided for payment of damages for personal injury for which any insured became liable. It also had a typical subrogation provision, which authorized Unigard, upon payment of a claim against an insured, to assert any right of recovery that that insured had against any other party.
The Mission policy was not a primary liability policy; it was, rather, an umbrella, "excess" liability policy with a general limit of $5 million. Under this policy both Pop Shoppes, "its subsidiaries . . . and employees of [the named insureds] acting within the scope of their duties as such," were each considered to be an "Assured." Further, it provided that, if an employee of one of Pop Shoppes' subsidiaries made a claim against another subsidiary, "then this policy shall cover such Assured against whom a claim is made or may be made in the same manner as if separate policies had been issued to each Assured hereunder." (emphasis supplied)
This policy specifically designated the Unigard policy as one of the "underlying insurances." In addition, it provided that Pop Shoppes would establish a "self-insured retention" of $10,000. The policy then provided that Mission would be liable for that portion of any insured's "ultimate net loss" that exceeded either:
(a) The limits of the underlying insurance . . . in respect to each occurrence covered by such underlying insurances, or
(b) The amount set out as [the self-insured retention] in respect to each occurrence not covered by said underlying insurances . . . . (emphasis supplied)
The subrogation provision of the Mission policy recognized that, because that policy provided only excess coverage, "the Assured's right of recovery against any person or other entity" could not be exclusively subrogated to Mission. However, with respect to such right of recovery, it was agreed that it and any other insurer would act in concert to exercise "such rights of recovery" and that any apportionment of proceeds from any subrogated recovery would be based upon the principle that Mission would be entitled to be reimbursed for any payment made by it before any underlying insurances would be reimbursed.
While these two policies were in effect, a sales and promotional meeting was held in Denver for employees of several of Pop Shoppes' subsidiaries. McKinley, an employee of one of the subsidiaries, Western Pop Shoppes (Western), was instructed by his supervisors to provide transportation services for out-of-town employees. In the course of returning one of the other subsidiary's employees to her hotel, and while he was allegedly under the influence of alcohol, McKinley was involved in a one-vehicle collision, which resulted in serious and permanent injuries to his passenger.
The
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