North American Capacity Insurance v. Claremont Liability Insurance

INTRODUCTION

This is an action for equitable contribution between two insurers. North American Capacity Insurance Company (NAC) seeks equitable contribution from Claremont Liability Insurance Company (Claremont) for NAC’s alleged overpayment towards settlement of an underlying action against their mutual insured, general contractor ID Group, Inc. (JDG). The two insurers paid a total of $1.1 million on IDG’s behalf as part of a $2.2 million global settlement of a property owner’s underlying action for defective construction of a home. Of the $1.1 million settlement sum paid on IDG’s behalf, NAC paid $800,000 and Claremont contributed $300,000. NAC brought the present action claiming Claremont did not contribute its equitable share of the settlement under their respective policies of insurance.

The court found after a bench trial that $909,574 of the $1.1 million settlement was covered solely under NAC’s policy and $190,426 was covered by both policies. Of the $190,426 covered by both policies, the court allocated responsibility for payment between the two insurers according to their proportionate “time on the risk,” which is the period of time that elapsed between the…