The court largely denied one insurer's motion to dismiss subrogation and contribution claims raised by another insurer. Zurich Am. Ins. Co. v. Aspen Spec. Ins. Co., 2021 U.S. Dist. LEXIS 148739 (D. Nev. Aug. 6, 2021).     Both Zurich and Aspen issued policies to Cosmopolitan Hotel and Casino for an incident that occurred at the hotel's nightclub. Two guests sued Cosmopolitan when they were attacked by employees. Cosmopolitan tendered to Aspen. Aspen controlled the defense, including the handling of settlement negotiations with the underlying plaintiffs. An offer of $975,000 was made by the underlying plaintiffs. Zurich insisted that Aspen settle within the available limits, but Aspen refused. The lawsuit later settled for $1.4 million, with Aspen contributing $988,000 and Zurich contributing $323,187.66 under a reservation of rights. Cosmopolitan also contributed to $88,812.34 to the settlement.      Zurich then sued Aspen for subrogation and contribution. Aspen moved to dismiss. Regarding Zurih's claim for equitable subrogation, the federal district court determined that Nevada would follow California law. Zurich plausibly alleged that Cosmopolitan suffered a loss for which Aspen was liable. Zurich alleged that Aspen breached its duty to accept a reasonable settlement demand, thereby causing a later settlement that exceeded Aspen's policy limits by over $300,000. Cosmopolitan would have been liable for this amount had Zurich not stepped in.     Zurich next argued that the claimed loss was not one for which Zurich was primarily liable  because (1) Zurich's policy responded after Aspen's and (2) Aspen's bad faith conduct caused the increased settlement amount. The court noted that Zurich's policy was not in excess of Aspen's policy. But Aspen could still be primarily liable because it caused the loss.      Zurich plausibly alleged that it compensated Cosmopolitan for the loss for which Aspen was primarily liable because ti contributed $323,187.66 to the settlement after Aspen rejected a lower, reasonable settlement demand. Zurich also plausibly alleged that Cosmopolitan had existing, assignable claims against Aspen that Cosmopolitan could have asserted on its own benefit had it not been compensated by Zurich for its loss.     Zurich plausibly alleged it suffered damages due to Aspen's bad faith refusal to settle for a lower amount. Zurich plausibly alleged that justice required its $323,187.66 loss be shifted to Aspen. Finally, Zurich plausibly alleged its damages were liquidated: $323,187.66. Therefore, Zurich's claim for equitable subrogation survived Aspen's motion to dismiss.     Zurich's claims for contractual subrogation and equitable indemnity also survived the motion to dismiss. The claim for equitable contribution was dismissed, however, with leave to amend. Because Zurich did not allege the amount of coverage its policy provided, it had not plausibly alleged it paid a disproportionate share. 

from Insurance Law Hawaii https://ift.tt/3zTxTs0