Progressive Gulf Ins. Co. v. Dickerson and Bowen, Inc.,
| Docket Number: | 2006-CA-01250-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 10-04-2007 Opinion Author: EASLEY, J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Insurance - Right of defense or indemnity - Condition precedent to coverage Judge(s) Concurring: SMITH, C.J., WALLER AND DIAZ, P.JJ., CARLSON, DICKINSON AND LAMAR, JJ.; RANDOLPH, J. CONCURS IN PART. Dissenting Author : GRAVES, J. Concur in Part, Concur in Result 1: Randolph, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 06-28-2006 Appealed from: Holmes County Circuit Court Judge: Jannie M. Lewis Disposition: Granted Appellee's Motion for Summary Judgment Case Number: 2003-436 |
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| Party Name: | Attorney Name: | |||
| Appellant: | PROGRESSIVE GULF INSURANCE COMPANY |
CECIL MAISON HEIDELBERG |
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| Appellee: | DICKERSON AND BOWEN, INC., AND TRAVELERS INDEMNITY COMPANY OF ILLINOIS | JENNIFER W. YARBOROUGH JOHN STEPHEN GRAHAM |
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| Topic: | Insurance - Right of defense or indemnity - Condition precedent to coverage |
| Summary of the Facts: | On January 13, 1999, Leola Cooper filed a lawsuit against Billy Carey for his negligent driving which resulted in her injury. Cooper amended her complaint on December 22, 2000, adding Dickerson & Bowen, Inc. as a defendant. On November 22, 2001, Progressive Gulf Insurance Company settled on behalf of Carey, leaving D&B as the sole defendant. D&B went to trial, and the jury rendered a $2.5 million verdict in favor of Cooper. D&B did not appeal the verdict. Travelers Indemnity Company of Illinois, D&B’s liability insurance carrier, settled with Cooper for $250,000 to satisfy the judgment against D&B. On November 20, 2003, Travelers filed suit against Progressive alleging that Progressive breached its duty to defend D&B and demanding indemnification for the settlement Travelers paid to Cooper, $250,000. Travelers moved for summary judgment and Progressive filed a cross-motion, also for summary judgment. The trial court granted Travelers’ motion for summary judgment. A final judgment was entered against Progressive for Travelers’ settlement amount of $250,000, plus costs and fees of $49,529.83, for a total of judgment of $299,529.83. Progressive appeals. |
| Summary of Opinion Analysis: | Progressive argues that D&B waived any right of defense or indemnity from Progressive as a result of non-compliance with Progressive’s policy requirements that were a condition precedent to coverage. Progressive further argues that as a result of D&B’s lack of a timely demand to defend or to provide coverage, D&B waived any right to coverage and to indemnification of Travelers for the settlement that Travelers negotiated with Cooper. Carey’s policy with Progressive contained a provision that covered vicarious liability for Carey’s negligence while driving the insured vehicle. However, D&B never requested any coverage from Progressive. D&B never made any demand for Progressive to defend it. Instead, D&B was represented and defended by its general liability insurer, Travelers, at all stages of the litigation proceedings. D&B maintained, at all times, that Carey was an independent contractor. Carey had his own commercial insurance policy with Progressive. Progressive settled Cooper’s lawsuit against Carey. Once Carey was released from the litigation, Progressive had no further involvement in the litigation. D&B made no request to Progressive for coverage until after D&B went to trial and received a jury verdict against D&B. Provisions number 9 and 10 of Progressive’s policy specifically stated the duty of the insured to: “provide us with written notice of any legal action which such person has undertaken in regard to the accident for which coverage is sought” and “assume no obligation, make no payment or incur no expense without our consent, except at your own cost.” Clearly, D&B did not comply with the requirements for coverage stated in Progressive’s policy. D&B chose its theory of defense, maintaining that Carey was an independent contractor, and chose to seek coverage and representation under its liability insurer, Travelers. Based on Carey’s and D&B’s assertions that Carey was not an employee of D&B, Progressive properly relied on Travelers’ representation and coverage of D&B. Because the jury failed to agree with D&B’s chosen theory of defense, the jury’s verdict does not retroactively obligate Progressive to indemnify Travelers. |
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