Continental Casualty Co. v. Royal Insurance of America

An excess carrier sued a primary carrier for breach of the covenant of good faith and fair dealing, and unfair claims practices. The excess carrier sought to recover sums paid on behalf of the insured, after the primary carrier allegedly rejected a reasonable settlement offer within the primary policy limits. The jury returned a verdict in favor of the excess carrier and the primary carrier appeals. The primary carrier asserts the trial court made a series of evidentiary and instructional errors.

The judgment is affirmed.

Statement of Facts

Royal Insurance Company of America (hereafter, Royal) and Continental Casualty Company (hereafter, Continental) provided liability insurance to Bidart Brothers’ Ranch (hereafter, Bidart). Royal provided primary insurance (up to $500,000) and Continental provided excess insurance.

On February 20, 1979, a house owned by Bidart, located on a ranch owned and operated by Bidart, exploded as a result of an underground accumulation of propane gas. A family of five, the Corderos, lived in the house. Pablo Cordero, Sr., was employed at the ranch. He was killed, along with one of his children. His wife and another child suffered severe…