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    Fireman's Fund Insurance Company v. Underwriters Insurance Company, 389 F.2d 767, 10th Cir. (1968)

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    The court affirmed the lower court's decision that Underwriters Insurance Company was only liable for excess coverage, not primary coverage, based on the language in its "other insurance" policy provision. Fireman's Fund Insurance Company, which had a pro rata provision, was responsible for primary coverage up to its policy limits. The majority rule is that the excess clause takes precedence over the pro rata clause in situations where two insurance policies have conflicting other insurance provisions. As the policies were in effect when the loss occurred, Underwriters was not obligated to provide coverage until Fireman's Fund's policy limits were exhausted.

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    Fireman's Fund Insurance Company v. Underwriters Insurance Company, 389 F.2d 767, 10th Cir. (1968)

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    The court affirmed the lower court's decision that Underwriters Insurance Company was only liable for excess coverage, not primary coverage, based on the language in its "other insurance" policy provision. Fireman's Fund Insurance Company, which had a pro rata provision, was responsible for primary coverage up to its policy limits. The majority rule is that the excess clause takes precedence over the pro rata clause in situations where two insurance policies have conflicting other insurance provisions. As the policies were in effect when the loss occurred, Underwriters was not obligated to provide coverage until Fireman's Fund's policy limits were exhausted.

    Original Description:

    Filed: 1968-03-04 Precedential Status: Precedential Citations: 389 F.2d 767 Docket: 9675_1

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    The court affirmed the lower court's decision that Underwriters Insurance Company was only liable for excess coverage, not primary coverage, based on the language in its "other insurance" policy provision. Fireman's Fund Insurance Company, which had a pro rata provision, was responsible for primary coverage up to its policy limits. The majority rule is that the excess clause takes precedence over the pro rata clause in situations where two insurance policies have conflicting other insurance provisions. As the policies were in effect when the loss occurred, Underwriters was not obligated to provide coverage until Fireman's Fund's policy limits were exhausted.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    14 views3 pages

    Fireman's Fund Insurance Company v. Underwriters Insurance Company, 389 F.2d 767, 10th Cir. (1968)

    Uploaded by

    Scribd Government Docs
    The court affirmed the lower court's decision that Underwriters Insurance Company was only liable for excess coverage, not primary coverage, based on the language in its "other insurance" policy provision. Fireman's Fund Insurance Company, which had a pro rata provision, was responsible for primary coverage up to its policy limits. The majority rule is that the excess clause takes precedence over the pro rata clause in situations where two insurance policies have conflicting other insurance provisions. As the policies were in effect when the loss occurred, Underwriters was not obligated to provide coverage until Fireman's Fund's policy limits were exhausted.

    Copyright:

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    of 3

    389 F.

    2d 767

    FIREMAN'S FUND INSURANCE COMPANY, Appellant,


    v.
    UNDERWRITERS INSURANCE COMPANY, Appellee.
    No. 9675.

    United States Court of Appeals Tenth Circuit.


    March 4, 1968.

    Page Dobson, Oklahoma City, Okl., for appellant.


    Joseph A. Sharp, Tulsa, Okl., for appellee.
    Before LEWIS, SETH and HICKEY, Circuit Judges.
    HICKEY, Circuit Judge.

    A declaratory judgment based upon the interpretation of a pro rata provision in


    conflict with an excess provision contained in the 'other insurance' clauses of
    the respective policies was given appellee, Underwriters, against appellant,
    Fireman's Fund. The trial court absolved Underwriters who had the excess
    provision1 and assessed liability against Fireman's Fund who had a pro rata
    provision.2 The appeal is grounded upon the claim that the trial court's
    conclusions of law are erroneous.

    The issue presented is whether both insurance carriers, on a risk, must prorate a
    loss between them when in the 'other insurance' clause one has a pro rata
    provision and the other an excess provision.

    The facts are stipulated that both policies were in effect when the loss occurred;
    both policies covered hull damage of an airplane for approximately the same
    amount; the insured was the same person who was killed when the damage
    occurred; the loss sustained was $35,000.00.

    To extricate themselves from the category of 'fortuitous adversaries'3 the parties


    to this action prorated their liability, reserved all rights, and the insured's estate

    was paid $35,000.00. The salvage was disposed of and credited to each of the
    parties.
    5

    Fireman's Fund contends that its 'pro rata' provision is inconsistent with the
    'excess' provision contained in the previously issued policy of Underwriters,
    and that under the Oregon rule they would be irreconcilable and repugnant each
    as to the other, requiring the liability to be prorated. Oregon Auto. Ins. Co. v.
    United States Fidelity and Guaranty Company, 195 F.2d 958 (9th Cir. 1952).

    Underwriters, on the other hand, contends that the majority rule disregards the
    pro rata clause, makes the pro rata policy the primary insurance, and gives full
    effect to the excess clause. Citizens Mutual Auto. Ins. Co. v. Liberty Mutual
    Ins. Co., 273 F.2d 189 (6th Cir. 1959); Employers' Liability Assurance Corp.,
    Ltd. v. Fireman's Fund Insurance Group, 104 U.S.App.D.C. 350, 262 F.2d 239
    (1958); McFarland v. Chicago Express, Inc., 200 F.2d 5 (7th Cir. 1952);
    Annot., 76 A.L.R.2d 502 (1961).

    The trial court adopted Underwriters' view of the law and grounded its
    conclusion on St. Paul Mercury Ins. Co. v. Underwriters at Lloyds of London,
    365 F.2d 659 (10th Cir. 1966). It is agreed that Oklahoma courts have yet to
    speak on the problem.

    We agree with the trial court's conclusion that under the St. Paul Mercury case,
    supra, each company is bound by the language of its policy and its liability
    cannot be extended beyond its undertaking. Underwriters, by the words used in
    its 'other insurance' provision, obligated itself to be liable only for excess
    coverage is there was other insurance covering the loss. Fireman's Fund
    accepted the primary responsibility by its words and until the limits of its policy
    were exhausted, Underwriters did not provide valid and collectible insurance
    within the pro rata provisions of the Fireman's Fund Policy.

    Affirmed.

    'Other Insurance. 13. This Company shall not be liable for loss if, at the time of
    loss, there is any other insurance which would attach if this insurance had not
    been effected, except that this insurance shall apply only as excess and in no
    event as contributing insurance, and then only after all other insurance has been
    exhausted.'

    'Other Insurance. If the Named Insured has other insurance against a loss

    covered by Part III of this policy, the Company shall not be liable under this
    policy for a greater proportion of such loss than the applicable limit of liability
    of all valid and collectible insurance against such loss.'
    3

    Brown and Risjord, Loading and Unloading: The Conflict Between Fortuitous
    Adversaries, 29 Ins. Counsel J. 197 (1962)

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