Century Surety Co. v. United Pacific Insurance

In this case, we are asked to determine the enforceability of an “other insurance” clause in a liability policy issued by the appellant Century Surety Company (Century). That clause provided Century’s coverage for its insured would be “excess” to the coverage of other “valid and collectable insurance.” Century was one of four successive insurers that had provided coverage to a common insured over a five-year period. One of those other insurers was the respondent herein, Lumbermens Mutual Casualty Company (LMC).

After the common insured tendered defense of a suit for damages that had been filed against it, LMC, along with United and Reliance, accepted the tender and agreed to provide, and did provide a defense under a reservation of rights; ultimately, those insurers settled the case. Century, however, rejected the tender and refused to provide a defense, claiming that its coverage was “excess” to that of the other insurers. Century claimed that it had no duty to participate as the underlying claim never threatened to exhaust the primary coverage of the other three insurers. When those insurers made demand upon Century for contribution, it filed this action seeking a…