RSUI Indemnity Company v. American States Insurance Company

(Client: American States Insurance Company)

Following a three-day trial in federal court, the firm obtained a judgment for primary insurer American States Insurance Company dismissing the excess insurer RSUI’s claim to recover a $2 million settlement RSUI paid on an underlying personal injury case.  RSUI claimed the settlement in the excess only became necessary as a result of alleged failures in the defense offered by the primary carrier, American States.  The court held that American States proved that its settlement of the primary limits, which included a Gasquet release of the insureds, protected the insureds from all personal exposure and eliminated any claim to which RSUI could subrogate when RSUI settled its own layer of coverage days later.   The court also agreed with American States that RSUI failed to meet its burden to prove that any alleged defensive failures by American States and/or its counsel caused the insureds’ exposure to exceed the primary policy limits.  As a result, the court dismissed all claims against American States.  The case was appealed to the Fifth Circuit. The Fifth Circuit affirmed the trial court's decision in August 2016, finding that RSUI failed to meet its burden to prove causation and dismissed all claims, with prejudice.