Tig Insurance v. General Star Indemnity Co.

MEMORANDUM *

General Star Indemnity Company appeals from the judgment of the district court in favor of TIG Insurance Company. We affirm.

In 1995, worker Luis Diaz was burned in an industrial accident. He sued Irwin Industries. Irwin’s insurance contract with General Star contained a provision, called a Self-Insurance Retention Endorsement, under which Irwin was responsible for management of the case and the first $200,000 in legal expenses and damages. General Star, the primary insurance carrier, would then take over the case and be responsible for the next $1 million. TIG, the excess insurance carrier, was responsible for $10 million after that. At any time, General Star had the authority to take over the litigation.

During the course of the litigation, Irwin and Diaz entered into mediation. Diaz reduced his settlement demand from $1.5 to $1.1 million, and Irwin and General Star offered $500,000. The mediating judge urged General Star to offer more money, and Irwin’s attorney asked General Star for the authority to settle for $650,000. General Star refused. At trial, a jury awarded Diaz $1.8 million. The parties settled during appeal for $1.7 million, of which TIG was…