National Union Fire Insurance Company of Pittsburgh, Pennsylvania v. Argonaut Insurance Company

Plaintiff National Union Fire Insurance Company of Pittsburgh, Pennsylvania, appeals from a grant of summary judgment to defendant Argonaut Insurance Company in an action on an insurance contract. We affirm.

FACTS

In February 1975 certain events in Texas gave rise to claims against United Rent-All, Inc., National’s equitable subrogor, which it eventually settled for $1,540,000. Commerce and Industry Insurance Company, United’s primary insurer, contributed to the settlement to the limit of its coverage, $300,000, subject to a $10,000 deductible. National contributed the remainder pursuant to its umbrella liability policy providing coverage of $5,000,000 in excess of underlying coverage of $300,000.

National then sued Argonaut, contending that at the relevant time Argonaut insured United by a primary policy to a limit of $300,000 and was thereby obligated to indemnify National for that amount. Argonaut argues that its policy covered United only to a limit of $10,000, the amount of the deductible under the Commerce and Industry policy.

The district court looked to extrinsic evidence in order to determine the intent of the parties to the contract by which Argonaut insured United…