Opinion ID: 1448289
Heading Depth: 1
Heading Rank: 13

Heading: Americold's Failure to Cooperate

Text: Americold owed certain express contractual duties to NPIC, including a duty to cooperate and a duty not to admit any liability or incur any expense unless agreed to by NPIC. NPIC had the right, but not the obligation, to investigate and participate in the defense before the primary insurer's payment of policy limits. NPIC contends that the settlement agreement shows Americold failed to cooperate in its defense. According to NPIC, Americold admitted liability and kept the terms of the agreement a secret from NPIC. NPIC claims it was prejudiced by Americold's settlement agreement because NPIC was precluded from defending the case. Although Richmond, defense counsel, thought Americold could raise certain defenses, he recommended settlement when plaintiffs ultimately offered to settle the case within the policy limits. Hasty's February 16, 1994, letter to Americold makes clear that the refusal to offer anything toward settlement was based on NPIC's view that no coverage existed, not on the strength of Americold's defenses in the underlying tort litigation. NPIC was not obligated to assume the defense until the primary insurance was exhausted. When exhaustion occurred, the litigation had been pending for some 18 months, discovery had taken place, trial on the liability issues was a month away in federal court, and the parties had been involved in court-ordered settlement discussions over the previous 3 weeks. All during this time, NPIC had the right to participate in the investigation and litigation. NPIC's claim of prejudice in being foreclosed from defending Americold, in view of its refusal to offer any settlement amount, is questionable.