Opinion ID: 1720413
Heading Depth: 1
Heading Rank: 2

Heading: whether it was reversible error to order one insurer to pay defense costs for a claim covered by two policies of insurance with conflicting other insurance clauses?

Text: The appeal at hand stems from the trial court's granting the declaratory judgment. A declaratory judgment sets out the law and is binding as to the rights of parties. The issue in the declaratory judgment before us dealt with questions of law. It is a well-settled principle that this Court is the ultimate expositor of the law of this state. UHS-Qualicare, Inc. v. Gulf Coast Community Hospital, Inc., 525 So.2d 746, 754 (Miss. 1987). Therefore, this Court conducts a de novo review on questions of law. Id.; C.E. Tucker v. Hinds County, Mississippi, and Mississippi Power & Light Co., 558 So.2d 869, 872 (Miss. 1990). Allstate argues that it was reversible error for the circuit court to order one insurer, Allstate, to bear the defense costs and potential liability for a claim covered by two insurance policies with conflicting other insurance clauses. Both Allstate and Chicago issued policies covering Joe Durastanti which cover his costs and potential liability resulting from a wrongful death action. Allstate says both policies must be examined to give full effect to the plain meaning of each and every term with the respective policies. The central problem posed by this matter is that while both policies cover the claim, each insurer has attempted to limit its respective liability and coordinate its insurance with the other policy. In so doing, both Allstate's and Chicago's other insurance clauses come into conflict. Standing alone, each policy would provide primary coverage. Allstate provides that its policy shall be primary to umbrella policies covering the same loss. The clause is not activated by Chicago's coverage of the claim because Chicago's insurance policy is not an umbrella policy. Chicago's policy, on the other hand contains a pro rata clause providing that where there are conflicting other insurance clauses, the loss shall be prorated among the insurers. Thus, Allstate argues that under either present Mississippi law or through giving full effect to Chicago's pro rata clause, the defense costs and potential liability of Joe and his business should be prorated between Allstate and Chicago according to their respective limits of liability. Chicago, on the other hand, argues that this Court must examine the language in the competing other insurance clauses to reach its decision. Chicago's other insurance clause expressly provides that its coverage is in excess of all other coverage. In contrast, Allstate's other insurance clause expressly concedes that its coverage is primary. Chicago asserts that the facts surrounding the purchase of the Chicago policy support the trial court's ruling. Chicago argues that the only reason Joe purchased the Chicago policy was to increase his liability coverage from $300,000.00 to $1,300,000.00, and that Joe intended that the Chicago policy provide coverage only in excess of the Allstate policy. Thus, Allstate's claim that Chicago's coverage is co-primary would be without merit. Chicago states that because the trial court's ruling does not deprive Joe of any insurance to which he is otherwise entitled, this Court should affirm that ruling. Chicago argues that a decision to the contrary would violate the intentions of the parties as expressed by the terms of their policies. [1]