Opinion ID: 1383123
Heading Depth: 2
Heading Rank: 3

Heading: Excess Carrier's Duty of Ordinary Care

Text: INA [4] complains that even though National may not have been under a duty to participate in the defense, investigation or negotiation of the Wolf Point case prior to INA's tender, INA should nevertheless be permitted to use evidence of National's mismanagement of the excess claim to show National's comparative responsibility. INA urges that a reasonably prudent excess carrier would have done more than National did to protect itself from liability under the excess policy. Specifically, INA says that National should have: explored coverage issues more diligently, reserved its rights against the insured, investigated the merits of the third-party claim more thoroughly, hired independent counsel to monitor the third-party claim, supervised its claims adjuster more closely, and demanded to settle the claim months before trial. These actions, INA submits, were necessary under National's duty to protect itself. See Walgreen-Texas Co. v. Shivers, 137 Tex. 493, 154 S.W.2d 625, 630 (1941)(contributory negligence is that conduct which creates an unreasonable risk of harm to oneself). The court of appeals, however, concluded that National could not have been negligent in failing to take the actions suggested by INA because it had no duty to act before INA tender its policy limits. We agree. As we have explained, before INA's tender, responsibility for Granada's defense rested with the primary carrier and KMC. During this period, National was not required to supervise the insured's defense and had no duty to anticipate that INA or Granada's attorneys were not performing appropriately, if indeed they were not. See De Winne v. Allen, 154 Tex. 316, 277 S.W.2d 95, 98 (1955)(claimant is not contributorily negligent for failing to anticipate the negligence of another). In fact, INA and KMC still deny that the defense was mishandled, contending instead that National was so disorganized that it failed to reasonably follow the progress of the case. But, as we have explained, National had no duty to act until INA tendered its limits and surrendered the defense to National. See 1 WINDT, supra § 2.01, at 31. Accordingly, we agree with the court of appeals that National's pre-tender conduct is irrelevant to the issue of comparative responsibility unless there is evidence that National interfered with the insured's defense or assumed control of the defense at some earlier point in time.