Opinion ID: 1829136
Heading Depth: 2
Heading Rank: 2

Heading: Excess Clauses in Each Policy

Text: The district court should have applied the pro rata distribution standard. Our court reaffirmed the pro rata approach for situations involving dueling excess insurance providers in Illinois National. Id. The rule recognized in Iowa was first espoused in 1969. Truck Ins. Exch. v. Maryland Cas. Co., 167 N.W.2d 163 (Iowa 1969). The court held: As a general rule, when two insurance companies provide insurance on the same loss, the question of their respective insurance obligations is determined by construction of the language used by the respective insurers.... Id. at 164. When the disputed policies contain excess clauses, those excess clauses cannot exist without a primary insurance coverage, and the loss must be shared proportionately. Id. Put another way, if two polices purport to afford only excess insurance, there can be no primary coverage. Without primary coverage neither policy can operate as a policy of excess insurance. Because the excess provision would thus be rendered inoperative, the general coverage of each policy must apply on a prorated basis. Illinois Nat'l, 578 N.W.2d at 672 (citing Truck, 167 N.W.2d at 164-65). Here, because the Westfield policy provides excess coverage only, it can only be forced to pay its proportionate share of the loss. There is no dispute that the Economy policy does not provide primary coverage for non-owned vehicles. Its policy reads: [A]ny insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance. As such, it is an excess insurer and liable for a pro rata share of the cost of settlement negotiated by it and Westfield. The Universal policy also contains an excess insurance clause. Under its general conditions it states: [T]his insurance is excess over any other insurance.... Under the auto portion of the policy the language reads: The insurance afforded by this Coverage Part is primary, except it is excess ... while the OWNED AUTO ... is in the care, custody, or control of any person or organization other than YOU. This language clearly indicates primary coverage does not exist for vehicles owned by Bi-State in the care of others. Although Universal now argues it provides no coverage at all under these circumstances, if we find that it does, the most it provides is excess coverage. We find the three insurance policies each provide excess insurance. The court impermissibly used specificity in policy language to find Westfield provided primary coverage in its adjudication of law points. Judge Nahra was not at liberty to question the validity of the adjudication of law points because it was a final ruling. Iowa R. Civ. P. 116 (original version at Iowa R. Civ. P. 105); see also Bruner v. Varley, 411 N.W.2d 150, 154-55 (Iowa 1987) (finding an adjudication of law points is a final order becoming the 'law of the case' in all further proceedings in the absence of an appeal (citation omitted)). While the district court was correct in applying the previous ruling when it made the summary judgment determination, summary judgment based upon an erroneous adjudication of law points cannot stand. Bruner, 411 N.W.2d at 155 ([W]e are not bound by the erroneous ruling on appeal.). The district court did not apply the pro rata standard as enunciated in Illinois National. This was error. When competing insurance policies contain excess clauses, each is repugnant to the others, and the loss should be prorated.