Opinion ID: 2191276
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Heading: Columbia's Claim Against the City of Des Moines.

Text: In reviewing a grant of summary judgment, the question is whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. Iowa Nat'l Mut. Ins. Co. v. Granneman, 438 N.W.2d 840, 842 (Iowa 1989); Iowa R.Civ.P. 237(c). As noted above, Columbia and the City have framed the decisive issue as being whether the $400,000 Maryland payment was disbursed in resolution of a coverage claim by the City, Botanical Center, Inc., or possibly some combination thereof. We, however, conclude that Columbia's liability under the excess policy can be determined without deciding the basis for Maryland's $400,000 payment. Since Columbia's liability, if any, to the City turns on the City's legal liability arising out of the Fister settlement, we need only consider the facts surrounding the settlement itself to determine Columbia's exposure. Having done so, it is clear that Botanical Center, Inc., through its attorney, offered to settle the Fister litigation for $400,000; it is equally clear that the Fisters then accepted this offer by executing a release as requested in favor of Botanical Center, Inc. Kent Forney, the attorney retained by Maryland to represent Botanical Center, Inc. in the Fister matter, testified as follows: Question: As far as you were concerned, was the money that was paid by the Maryland Casualty paid for and on behalf of the Des Moines Botanical Center, Inc. in the settlement? Answer: ... I know I represented the Botanical Center and that the $400,000 I offered on behalf of the Botanical Center. .... Question: And you were offering that money on behalf of your client, Des Moines Botanical Center, Inc., to obtain a complete release; correct? Answer: Yeah.... This testimony was not controverted by the City; instead, the City's attorney for the Fister matter merely made the general assertion that the $800,000 settlement was not a joint settlement. The Fisters responded to Forney's offer by executing a release on March 5, 1983, in favor of both Botanical Center, Inc. and the City, thus creating a unilateral contract. Siebring Mfg. Co. v. Carlson Hybrid Corn Co., 246 Iowa 923, 930, 70 N.W.2d 149, 153 (1955) (acceptance may be shown by conduct or by performance communicated to the promisor). Upon execution of the release, Botanical Center, Inc. became legally liable to the Fisters in the amount of $400,000. Renner v. Model Laundry, Cleaning & Dyeing Co., 191 Iowa 1288, 1304-06, 184 N.W. 611, 618 (1921) (a covenant not to sue is sufficient consideration to support a payment or promise to the covenantor by covenantee). Therefore, the City's liability arising as a consequence of the Fister settlement would be the balance of the $800,000 settlement, or $400,000. It should be noted that an equal apportionment of fault between the City and Botanical Center, Inc. would be consistent with the then-applicable law regarding fault apportionment between cotortfeasors. Schnebly v. Baker, 217 N.W.2d 708, 731 (Iowa 1974) (ordinarily the total amount of the judgment is divided equally among those liable to the injured person); L. Blades & A. Kintzinger, Iowa Tort Guide § 10.8, at 186-87 (1981) ([T]ypically, where contribution is awarded, the total amount of the liability is divided equally among the tortfeasors.). It is apparent from the foregoing that the fact that the $800,000 payment to the Fisters was made by a check from the City is immaterial to our inquiry. The fact remains that the amount for which the City was legally liable as damages by reason of ... a settlement does not exceed $500,000, the City's retained limit under the Columbia excess liability policy. Our conclusion that the City's liability under the Fister settlement equals $400,000 is bolstered by other uncontroverted evidence. In Columbia's petition, it alleged that the Fister accident arose under circumstances creating joint and several legal liability on the part of [Botanical Center, Inc.] and the City of Des Moines. After initially admitting this paragraph of Columbia's petition, the City and Botanical Center, Inc. moved for leave to amend and substitute a new answer. The district court granted them leave to amend, and they then denied that the injuries sustained by Fister occurred under circumstances creating joint and several legal liability. Regarding amended answers, we have said as follows: When a pleading is amended or withdrawn, the superseded portion disappears from the record as a judicial admission limiting the issues and putting certain facts beyond dispute. Nevertheless, it exists as an utterance once deliberately made and may be used as a quasi-admission like any other utterance of the party as an item of evidence, not final or conclusive. Clubb v. Osborn, 260 Iowa 223, 227, 149 N.W.2d 318, 320 (1967); see also Poyzer v. McGraw, 360 N.W.2d 748, 750 (Iowa 1985). As noted above, if the City and Botanical Center, Inc. consider themselves to be jointly and severally liable to the Fisters, each of the codefendants, under then-existing law, would have been responsible for fifty percent of the settlement package. Schnebly, 217 N.W.2d at 731. Thus, the withdrawn admission does provide additional support for Columbia's contention that the City's ultimate net loss by reason of the settlement was only $400,000, and not the full $800,000 as the City contends. We also find it significant that there is evidence in the record to suggest that, under the Maryland policy, Maryland's liability to the City was to be triggered only when there was also liability to Botanical Center, Inc. The coverage provisions of the Maryland policy that bear on the City's coverage as additional insured read as follows: The Persons Insured provision is amended to include as an insured the person or organization named above (hereinafter called additional insured), but only with respect to liability arising out of (1) operations performed for the additional insured by the named insured at the location designated above or (2) acts or omissions of the additional insured in connection with his general supervision of such operations. Robert Elmitt, the insurance agent who procured both the Maryland and the Columbia policies, testified that coverage for the City of Des Moines [under the Maryland policy] was contingent upon the liability relating to the operations of the Des Moines Botanical Center, Inc., not the City operation of the Botanical Center. In addition, the $400,000 Maryland check, which was made payable to the City of Des Moines, listed the Des Moines Botanical Center, Inc. as the insured. The foregoing uncontroverted facts support our conclusion that Botanical Center, Inc. shared some liability for the Fister accident and thus contributed to the Fister settlement package.