Brotherhood Mutual Insurance v. Church Mutual Insurance

MEMORANDUM *

Plaintiff Brotherhood Mutual Insurance Company brought this action for equitable contribution against Defendant Church Mutual Insurance Company, seeking to recover half the amount that Plaintiff spent to defend and settle lawsuits brought against entities and individuals insured by both Plaintiff and Defendant. The district court granted Plaintiffs motion for summary judgment.

1. We assume without deciding that the Defendant’s umbrella policy dropped down to the primary coverage layer. Even with this drop down coverage, Plaintiff cannot seek equitable contribution. No “occurrence” triggered Defendant’s umbrella policy because the policyholders intended the harm they caused. Ohio Cas. Ins. Co. v. Henderson, 189 Ariz. 184 , 939 P.2d 1337, 1344 (1997).

2. Defendant issued a director, officer, and trustee liability policy to the insureds even though Defendant knew of allegations of fraud against the insureds’ directors and officers. To protect itself, Defendant added a manuscript exclusion that explicitly precluded coverage for wrongful acts arising from the operation of Paradise Valley Estates. Plaintiffs argument that the exclusion was limited to only certain kinds…