Opinion ID: 1215806
Heading Depth: 1
Heading Rank: 4

Heading: the claim against the western casualty and surety

Text: The Western policy is a comprehensive General Liability policy with an attached Errors Or Omissions Liability Insurance rider. The policy term was from May 12, 1975, through May 12, 1976. Western's requirements in the event of a claim, occurrence or suit were identical to the standard form clause noted above in Foremost's policy. The Errors or Omissions clause establishes that the sheriff's improper execution sale was an occurrence within the coverage of Western's policy: The company further agrees to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages on account of any claim made against the insured and caused by any negligent act, error or omission of the insured or any other person for whose acts the insured is legally liable which occurs during the policy period. The company shall have the right and duty to defend any suit against the insured seeking damages on account of such negligent act, error or omission even if any of the allegations of the suit are groundless, false or fraudulent and may make such investigation or settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or defend any suit after the applicable limit stated in this endorsement has been exhausted by payment of judgments or settlements. Quarles Agency forwarded notification of the complaint filed against Sheriff Fladwed to Western's claims manager, Mr. Milton Beck, on July 22, 1976. There is no contention that Quarles was not a proper agent of Western in this matter, nor is there any claim that Quarles was negligent in the manner in which he notified Western of the Nixon v. Triber litigation. Western's duty to defend Sheriff Fladwed was triggered in the same fashion as Foremost's duty to defend, and the above analysis under Part I herein applies equally to Western. Western clearly owed the sheriff a duty to defend. Western also argues that, unlike all other potentially involved insurers, it never received any notice whatsoever of the Tribers' Amended Complaint for damages against the sheriff (filed in January 1980). Western claims that, in fact, it never received any notice of the trial scheduled for November 12, 1980, nor of its continuation until February, 1981. Since Western's duty to defend was triggered by the original Nixon v. Triber litigation, we see no validity in Western's claim. Western maintained frequent correspondence with the Kootenai County Attorney's Office throughout the protracted proceedings. Although fully aware of the occurrence in question and the claims and losses against Sheriff Fladwed, Western failed to actively participate in either the handling of the claims or the defense of the case. The fact that Western monitored the development of litigation against Sheriff Fladwed indicates that Western should have been alerted to the evolving claim for damages against the sheriff, and placed Western on notice of its duty to defend. Finally, Western argues that its policy was for general liability and, therefore, the more specific coverage policies of Foremost and Lloyd's should provide coverage before Western's general policy comes into play, and that since the policy limits of the other policies are greater than the amount of the subject claim, that the Western policy affords no coverage. Western further argues that its policy language does not cover this loss in any event. We do not reach those issues at this time since they have not yet been litigated and ruled upon in the trial court.