Opinion ID: 672855
Heading Depth: 3
Heading Rank: 3

Heading: Conditions Precedent to NYMU's Policy

Text: 35 NYMU argues that if it issued Blank a policy, the policy would have conditioned coverage upon (1) prompt written notice of any alleged occurrence and (2) immediate delivery of copies of any pertinent pleadings. NYMU's Brief at 7. NYMU argues that because Blank failed to comply with either of these conditions, Blank may not force NYMU to bear the costs of his defense and defeat any right of a co-insurer to contribution of defense costs. Id. at 7-8. 36 The district court properly found, first, that New York law provides a cause of action for contribution between co-insurers when several insurers cover the same risk and payment for loss has been made by one, that carrier has a right to pro rata contribution from other insurers See State v. Blank, 820 F.Supp. 697, 707 (N.D.N.Y.1993) (citing Vigilant Ins. Co. v. Employers Ins. of Wausau, 626 F.Supp. 262, 268 (S.D.N.Y.1986)). The district court then relied on Zurich-American Ins. Cos. v. Atlantic Mut. Ins. Cos., 139 A.D.2d 379, 531 N.Y.S.2d 911, 916 (1st Dept.1988), aff'd, 74 N.Y.2d 621, 541 N.Y.S.2d 970, 539 N.E.2d 1098 (1989), for the proposition that an insurer may maintain a contribution action against a co-insurer without complying with the formal claim requirements that would be imposed upon the insured. Blank, 820 F.Supp. at 707. 37 We find that the district court's reliance on Zurich-American was misplaced. Careful analysis of Zurich-American reveals that the case did not concern an insured's failure to comply with formal claim requirements contained in the policy. Rather, Zurich-American involved the question whether the insureds were covered at all. In Zurich-American, the insurer of a day-care center brought an action against the insurer of the church at which the day-care center was located. The action claimed that the insurer of the church was obliged to participate in the defense of an underlying action brought against employees of the day-care center for the sexual abuse of children. The church's insurer attempted to avoid liability to defend two defendants in the underlying action on the grounds that although they were employees of the day-care center, they were not, in fact, employees of the church. The First Department acknowledged that the church's insurer would not be obliged to indemnify parties to the suit who were ultimately found not to be church employees. The First Department found, however, that the question whether the church's insurer was obligated to contribute to the defense of particular parties to the suit was to be resolved on the face of the complaint. Because the complaint alleged that the insureds were church employees, the First Department found that the church's insurer was obligated to contribute toward their defense. Thus, Zurich-American did not hold that the right of contribution against a co-insurer would survive the insured's failure to comply with the provisions of the policy. 38 We further find that the district court mistakenly determined that a cause of action against an insurer for contribution will lie even where the insured has not complied with conditions of the policy. 39 We have previously observed that, under New York law, an insured has an obligation to comply with the notice-of-occurrence and notice-of-claims provisions of an insurance policy. Commercial Union Ins. Co. v. International Flavors & Fragrances, Inc., 822 F.2d 267, 271 (2d Cir.1987) (Under New York law, compliance with a notice-of-occurrence provision in an insurance policy is a condition precedent to an insurer's liability under the policy); see also Security Mut. Ins. Co. v. Acker-Fitzsimons Corp., 31 N.Y.2d 436, 440, 340 N.Y.S.2d 902, 905, 293 N.E.2d 76, 78 (1972). Where the insured fails to comply with these conditions, the insurer is relieved of its duty not only to indemnify, but also to defend the insured. Olin Corp. v. Insurance Co. of North America, 743 F.Supp. 1044, 1055 (S.D.N.Y.1990), aff'd, 929 F.2d 62 (2d Cir.1991) (per curiam). Thus, the insured's failure to provide notice within a reasonable time without a valid excuse for delay constitutes a complete defense to a third-party complaint by the insured to compel the insurer to bear the costs of defense in the underlying action. See Christiania Gen. Ins. Corp. v. Great American Ins. Co., 979 F.2d 268, 275 (2d Cir.1992); Utica Mut. Ins. v. Firemen's Fund Ins. Cos., 748 F.2d 118, 121 (2d Cir.1984). Indeed, under New York law, [a]bsent a valid excuse the insured's failure to provide notice vitiates coverage. E.g., In re Allcity Ins. Co. and Jimenez, 576 N.Y.S.2d 87, 88, 78 N.Y.2d 1054, 1055, 581 N.E.2d 1342, 1343 (1991). As this court has previously observed, notification provisions advance several important policies: 40 They enable insurers to make a timely investigation of relevant events and exercise early control over a claim. Early control may lead to a settlement before litigation and enable insurers to take steps to eliminate the risk of similar occurrences in the future. When insurers have timely notice of relevant occurrences, they can establish more accurate renewal premiums and maintain adequate reserves. 41 Commercial Union Ins. Co. v. International Flavors & Fragrances, Inc., 822 F.2d 267, 271 (2d Cir.1987). While this court offered this observation in the context of a dispute over compliance with a notice-of-occurrence provision, the considerations, particularly the concerns over an insurer's capacity to conduct litigation and settlement negotiations, apply equally to notice-of-claim provisions. 42 NYMU's argument presents the question whether failure to comply with a policy's notice requirements also constitutes a complete defense to a fourth-party complaint by a successive insurer against a previous insurer for contribution to the costs of the insured's defense. Although we have found no New York cases directly on point, a comparison of cases involving disputes between insureds and insurers with cases involving disputes between co-insurers and cases involving disputes between parties to a reinsurance contract allow us to predict with reasonable certainty the result that the New York Court of Appeals would reach were it presented with this issue. See Travelers, 14 F.3d at 119. 43 At least one New York court has held that an insurer may seek contribution from a co-insurer notwithstanding the insured's failure to give prompt notice to the co-insurer where the insurer itself provided reasonably timely notice to the co-insurer. Crum & Forster Org. v. Morgan, 192 A.D.2d 652, 654, 596 N.Y.S.2d 472, 474 (2d Dept.1993). Crum & Forster implies that had the first insurer failed to provide the second insurer with timely notice, the first insurer could not have sought contribution from the second insurer. Thus, although the duty to provide notice rests primarily upon the insured, a co-insurer hoping to benefit from the presence of another insurer, must ensure that the notice provisions of the insured policy with the second insurer are complied with. That is, if the insured fails to give notice to one co-insurer, the co-insurer that received notice must give notice to the co-insurer that did not. See id. Conversely, if the insured provided notice to only one co-insurer and if the co-insurer who received notice fails to give prompt notice to the co-insurer that did not, the co-insurer who received notice may not seek contribution from the co-insurer who did not. Similarly, for reasons stated below, we find that where the insured provides notice to a successor insurer but fails to provide notice to the previous insurer, the successor may not seek contribution from the previous insurer unless the previous insurer received prompt notice from the insured or, in the alternative, from the successor insurer. 44 The rationale supporting strict enforcement of a notice-of-occurrence and notice-of-claim requirements, see Commercial Union, 822 F.2d at 267, applies in this case, where a successive insurer seeks contribution from a previous insurer. If anything, the rationale for requiring notice in the case of successive insurers is stronger than the rationale for requiring notice in the case of co-insurers. Because co-insurers have issued policies to the insured for the same time period, their interests in investigating the occurrence and controlling litigation and settlement negotiations closely converge. See Crum & Forster, 192 A.D.2d at 654, 596 N.Y.S.2d at 474. Because successive insurers cover different time periods, their interests in investigating occurrences necessarily diverge. Each insurer has an interest in establishing that the occurrence took place during the time period covered by the other insurer. Because these interests diverge, if a successor insurer hopes to benefit from an insured's policy with a previous insurer, the successor must comply with the insured's obligations under the policy. If the insured fails to comply with the notice requirements of a policy issued by a previous insurer, therefore, the successive insurer must give prompt notice. 45 Here it is undisputed that Blank did not provide NYMU with either notice of the occurrence or of the claim. The question whether Capital Mutual may seek contribution from NYMU for the cost of Blank's defense, therefore, turns on whether Capital Mutual provided notice to NYMU within a reasonable time under all the circumstances. Cf. Crum & Forster, 192 A.D.2d at 654, 596 N.Y.S.2d at 474; Allstate Ins. Co. v. Kashkin, 130 A.D.2d 744, 745, 516 N.Y.S.2d 43, 43 (2d Dept.1987) (An insured must give notice to his or her insurer within the time limit provided in the insurance policy or within a reasonable time under all the circumstances); see also N.Y.Ins.Law Sec. 3420(a)(4) (McKinney's 1985) (A provision that failure to give any notice required to be given by such policy within the time prescribed therein shall not invalidate any claim made by the insured or by any other claimant if it shall be shown not to have been reasonably possible to give such notice within the prescribed time and that notice was given as soon as was reasonably possible) (emphasis added). 46 New York courts have held that the question whether notice was given within a reasonable time may be determined as a question of law when (1) the facts bearing on the delay in providing notice are not in dispute and (2) the insured has not offered a valid excuse for the delay. E.g. Gresham v. American Gen. Life Ins. Co., 135 A.D.2d 1121, 1122, 523 N.Y.S.2d 282, 282 (4th Dept.1987) (While ordinarily it is a question of fact whether an insured gave timely notice of loss, summary judgment is warranted where the insured has not offered a credible excuse for the delay in notification and where the underlying facts are not in dispute); Jenkins v. Burgos, 99 A.D.2d 217, 220, 472 N.Y.S.2d 373, 375-76 (1st Dept.1984); Hartford Fire Ins. Co. v. Masternak, 55 A.D.2d 472, 474, 390 N.Y.S.2d 949, 952 (4th Dept.1977) (It is only when no excuse is offered for delay, or when no credible evidence supports the proffered excuse, that notice will be held untimely as a matter of law); Columbus Trust Co. v. Hanover Ins. Co., 50 A.D.2d 798, 799, 375 N.Y.S.2d 628, 629 (2d Dept.1975) (collecting cases). 47 In this case, there are no disputed issues of fact that are material to the question whether Capital Mutual provided NYMU with reasonable notice of the occurrence and claim. Second, Capital Mutual has not offered a valid excuse for its delay. This case involves the failure of an insurance company, fully familiar with the notice requirements of a standard insurance policy as well as with the consequences of failure to give prompt notice, to give notice to another insurance company. Capital Mutual's only proffered excuse for its delay in notifying NYMU of the claim was that it maintained a good faith belief in non-liability under the policy. New York courts have held that an insured's good faith belief in non-liability may excuse delay in notifying its insurer of the occurrence. See, e.g., E.T. Nutrition Inc. v. Central Mut. Ins. Co., 201 A.D.2d 451, 452, 607 N.Y.S.2d 392, 393 (2d Dept.1994); Beach Haven Apartments, No. 6, Inc. v. Allcity Ins. Co., 182 A.D.2d 658, 659, 581 N.Y.S.2d 689, 698 (2d Dept.1992); see also Mount Vernon Fire Ins. Co. v. Creative Hous. Ltd., 797 F.Supp. 176, 185 (E.D.N.Y.1992). These cases, however, are distinguishable. They involved the failure of an insured to notify an insurer of an occurrence. This case involves not only the failure to notify an insurer of an occurrence but also failure to notify of a claim. The cases excusing an insured's failure to notify an insurer of an occurrence based on a good faith belief of non-liability are supported by the rationale that if insureds were required to notify insurers of every incident that poses even a remote possibility of liability, insurers would soon be swamped with notice of minor incidents that pose little danger of resulting even in an action by the injured party against the insured, let alone a claim by the insured against the insurer. See Christiania, 979 F.2d at 275 (insured's duty to provide notice will not arise under New York law on the basis of mere speculation, rumor, or remote contingencies far removed from the particular policy in question). In Beach Haven Apartments, for example, the insured provided notice to the insurer soon after a claim was filed. Beach Haven Apartments, 182 A.D.2d at 659, 581 N.Y.S.2d at 690. Once there is a reasonable possibility that the policy will be involved, however, this rationale is no longer applicable. See Christiania, 979 F.2d at 276 (knowledge that claim was likely, though not yet actually filed, sufficient to trigger the duty of notice); see also Ogden Corp. v. Travelers Indem. Co., 924 F.2d 39, 43 (2d Cir.1991). It is true that the insurer may believe in good-faith that it would prevail in court if the insured claims coverage. This belief, however, would no doubt be based upon factual investigation of the occurrence and legal analysis of the claim. The opportunity to conduct such investigation and research is the very reason for the notification requirement. Thus, a good faith belief by an insured that it was not covered under the policy would not excuse unreasonable delay in failing to notify its insurer of a claim. Similarly, a good faith belief by an insurer that it is not liable to defend or indemnify its insured on a claim by the insured will not excuse unreasonable delay in failing to notify a previous insurer of the claim. Just as the successive insurer benefits from notification by the insured, notification that allows the insurer to investigate the factual and legal basis of the claim, the previous insurer is entitled to the benefits that prompt notification brings. We conclude that, as a matter of law, a good faith belief by a successive insurer that it is not liable to defend or indemnify its insured on a claim does not excuse the successive insurer's failure to notify the previous insurer of the claim. Thus, Capital Mutual's belief that it was not liable to defend Blank does not excuse its failure to notify NYMU of the occurrence and claim at issue. We therefore decide whether Capital Mutual's notice to NYMU was reasonable as a matter of law. 48 In the absence of mitigating factors, courts have found, as a matter of law, [e]ven short periods of delay [to be] unreasonable. Olin Corp., 743 F.Supp. at 1053. Thus, even periods as short as 29 days have been found unreasonable. Government Employees Ins. Co. v. Elman, 40 A.D.2d 994, 338 N.Y.S.2d 666, 667 (2d Dept.1972). And courts have routinely found periods of delay less than ten months to be unreasonable. See, e.g., Utica Mut. Ins. Co. v. Fireman's Fund Ins. Cos., 748 F.2d 118, 121, 123 (2d Cir.1984) (deferring to trial court's finding, as a mixed question of law and fact, that six month delay was unreasonable); Power Auth. v. Westinghouse Elec. Corp., 117 A.D.2d 336, 342, 502 N.Y.S.2d 420, 423 (1st Dept.1986) (53 days); Peerless Ins. Co. v. Nationwide Ins. Co., 12 A.D.2d 602, 208 N.Y.S.2d 469, 470 (1st Dept.1960) (per curiam) (four to five months); Deso v. London & Lancashire Indem. Co., 3 N.Y.2d 127, 130, 164 N.Y.S.2d 689, 692, 143 N.E.2d 889, 891 (1957) (51 days); see also American Home Assurance Co. v. Republic Ins. Co., 984 F.2d 76, 78 (2d Cir.1993) (collecting New York cases holding that delays ranging from 10 to 53 days were unreasonable). 49 Capital Mutual's fourth-party complaint against NYMU was filed on March 11, 1992, pursuant to permission granted by the district court in an order filed on February 26, 1992. Capital Mutual was aware of the possibility that NYMU had issued an insurance policy to Blank in May of 1988, just shortly after the third-party action against Capital Mutual was commenced. Reply Affidavit of Alan J. Pierce at 10, New York v. Blank, No. 88-CV-0163 (N.D.N.Y. Mar. 10, 1993) (Pierce Affidavit). Capital Mutual, however, concedes that it did not notify NYMU of the underlying action against Blank until March, 1989. Fourth-Party Complaint at 12, New York v. Blank, No. 88-CV-0163, (N.D.N.Y. March 11, 1992). Apparently, this notification occurred through a letter from Capital Mutual to NYMU dated March 10, 1989, and received March 16, 1989. See Affidavit of Wilfred W. Wege and exhibit A, New York v. Blank, No. 88-CV-0163 (Mar. 3, 1993). This would have been approximately ten months after Capital Mutual discovered the possibility of coverage by NYMU; eleven months after Abalene and Blank filed their third-party complaint; thirteen months after the State of New York commenced the underlying action against Blank; and twenty-four months after the State of New York discovered the pesticides at the site. Capital Mutual did not bother to notify NYMU until after the district court entered a judgment on February 13, 1989, holding Capital Mutual liable to defend Blank and finding Capital Mutual in breach of its duty to defend Blank. See Pierce Affidavit at 10 (we decided not to involve New York Mutual unless and until the Court declared that Capital Mutual had a duty to defend). We find that Capital Mutual's delay of ten months from the date they claim to have first discovered the possibility of coverage by NYMU to be unreasonable under the circumstances. 50 Having determined that Capital Mutual's notice to NYMU was not reasonable under the circumstances, it remains to be determined whether NYMU must demonstrate that it was prejudiced by the lack of notice. New York has adopted the no prejudice rule with respect to disputes between an insured and its primary insurer. See Ogden Corp., 924 F.2d at 42-43. Under that rule, the insurer need not demonstrate that it was prejudiced from the insured's failure to give prompt notice. In cases involving co-insurers and in cases involving a contract of re-insurance, New York courts have refused to follow the no prejudice rule. Crum & Forster, 192 A.D.2d at 654, 596 N.Y.S.2d at 474; Unigard Sec. Ins. Co. v. North River Ins. Co., 79 N.Y.2d 576, 582, 584 N.Y.S.2d 290, 292, 594 N.E.2d 571, 573 (1992). At first glance, this case--involving a dispute between successive insurers--appears similar to the cases involving co-insurers and re-insurers; and this suggests that NYMU should be required to demonstrate that it was prejudiced by Capital Mutual's failure to give prompt notice. Closer analysis, however, reveals that the rationale supporting the New York courts' decision to abandon the no prejudice rule in cases involving co-insurers or re-insurers does not apply to cases involving successive insurers. The Court of Appeals wrote, in Unigard Sec., that the  'no prejudice' rule does not apply to a failure to comply with the prompt notice requirement in a contract of reinsurance because, in part, the interests of a reinsurer and the ceding primary insurer with respect to a pending claim are generally identical. Id. Similarly, the Second Department in Crum & Forster wrote, since the interests of the two carriers with respect to [the insured's] claim are essentially identical, [the second insurer's] claim for contribution should not be precluded by the purported failure of [the first insurer] to receive timely notice unless some prejudice is shown. Crum & Forster, 192 A.D.2d at 654, 596 N.Y.S.2d at 474. 51 Unlike co-insurers or re-insurers, successive insurers do not insure the same risk. To be sure, successive insurers will often insure the same type of risk. The risk that NYMU insured from, allegedly, February 28, 1972, to February 28, 1975, was similar to the risk that Capital Mutual insured from February 28, 1985, to January 1, 1987. While no doubt similar, that risk could not be said to have been the same. Because successive insurers do not insure the same risk, their interests cannot be said to be essentially the same. While each successive insurer will have an interest in investigating the occurrence and defending the claim, each insurer will also have an interest in limiting its liability for damages by demonstrating that the bulk of the damages were incurred during a period covered by another insurer. Because the interests of successive insurers differ in this way, it would be inappropriate to depart with the no prejudice rule. 52 We find that Blank and Capital Mutual unreasonably failed to notify NYMU of the occurrence and claim underlying this appeal. This failure relieves NYMU of any duty to defend or indemnify Blank. Accordingly, we vacate that portion of the district court's opinion holding NYMU liable to contribute to the cost of Blank's defense. B. Allocation of Defense Costs 53 The district court apportioned costs as follows: National Union, 66.66%; Capital Mutual, 16.66%; and NYMU, 16.66%. See Order (filed Aug. 16, 1993). The district court reasoned that since only National Union insured Abalene, National Union should bear 50% of the costs of defense. The district court further reasoned that because National Union also listed Blank as a named insured that National Union should share in the costs of Blank's defense. The district court therefore allotted National Union, Capital Mutual, and NYMU each an equal share of the 50% of the total defense costs that were attributable to Blank's defense. Thus, National Union, Capital Mutual, and NYMU were each allotted 16.66% of the costs attributable to Blank's defense. This resulted National Union bearing 66.66% of the total costs, with Capital Mutual and NYMU each bearing 16.66%. 54 As discussed above, however, because Blank and Capital Mutual failed to provide NYMU with reasonable notice-of-occurrence and claims, NYMU is not liable for the costs of Blank's defense. Therefore, it is necessary to reassess the apportionment of costs amongst the remaining insurers, National Union and Capital Mutual. If we were to follow the analysis of the district court, we would continue to hold National Union liable for 50% of the total costs that are attributable to Abalene plus an equal share of the costs attributable to defense of Blank. Thus, under the approach of the district court, National Union would be liable for 75% of the total costs and Capital Mutual would be liable for the remaining 25%. 55 We decline to follow the district court's approach, however. In similar situations, courts have ignored disparities between the policies' named insureds and apportioned costs equally between insurers. See United States Fidelity & Guar. Co. v. Executive Ins. Co., 893 F.2d 517, 519 (2d Cir.1990); J.P. Realty Trust v. Public Serv. Mut. Ins. Co., 102 A.D.2d 68, 476 N.Y.S.2d 325 (1st Dept.1984), aff'd, 64 N.Y.2d 945, 488 N.Y.S.2d 650, 477 N.E.2d 1104 (1985). 56 J.P. Realty involved a wrongful death action against a lessor and its affiliate. The lessor and its affiliate brought an action against the lessee's insurer on the ground that the lessor and its affiliate were named by the lessee's insurer as additional insureds. The lessee's insurer brought a third-party complaint against the insurer of the lessor and the affiliate. Thus, J.P. Realty involved two insurers that had issued policies with different named insureds; the lessee's insurer insured the lessee, the lessor, and the lessor's affiliate while the lessor's insurer insured only the lessor and its affiliate. Notwithstanding this disparity, the New York Court of Appeals declared that the two insurers should contribute by equal shares to the defense and indemnification of the insureds. J.P. Realty, 102 A.D.2d at 73, 476 N.Y.S.2d at 329. 57 United States Fidelity involved personal injury actions against a property management company, W & F Building Corporation, and two of its officers, Weiss and Fried. U.S. Fidelity had issued a policy naming W & F and Fried as insureds. Executive Insurance Company had issued a policy naming Weiss and Fried as insureds. This court held that both insurance companies were to be deemed coinsurers of Weiss, Fried and W & F and, on the basis of other insurance clauses in the policies, reinstated an order of the district court directing U.S. Fidelity and Executive to contribute equally in the defense and indemnification of Weiss, Fried and W & F Building Corp. United States Fidelity, 893 F.2d at 518. 58 We find that under the circumstances of this case, National Union and Capital Mutual are to be deemed coinsurers of Blank and Abalene. It is true that National Union's policy names both Abalene and Blank as insureds while Capital Mutual names only Blank. As we discussed above, however, Capital Mutual's policy provided coverage to Blank not only in his individual capacity but also with respect to the conduct of a business of which he is the sole proprietor. Further, we note that Blank and Abalene are represented in this action by one law firm and that bills submitted by that law firm have not distinguished between costs attributable to the defense of Abalene and costs attributable to the defense of Blank. See Affidavit of David Holmes, exhibit 1, New York v. Blank, No. 88-CV-0163 (June 18, 1993). This suggests that Blank, as the sole shareholder, president, and treasurer of Abalene, was so closely involved in the affairs of Abalene that the defense of Blank is, for all practical purposes, indistinguishable from the defense of Abalene. 59 We further find that National Union and Capital Mutual are to contribute by equal shares to the defense of Abalene and Blank. As in the cases of J.P. Realty and United States Fidelity, both policies contain other insurance clauses that permit contribution by equal shares when other insurance policies similarly permit contribution by equal shares. Capital Mutual's policy contains language virtually identical to the provisions at issue in J.P. Realty: 60 When both this insurance and other insurance apply to the loss on the same basis, whether primary, excess or contingent, the Company shall not be liable under this policy for a greater proportion of the loss than that stated in the applicable contribution provision below 61 1. Contribution by Equal Shares: If all of such other valid and collectible insurance provides for contribution by equal shares, the Company shall not be liable for a greater proportion of such loss than would be payable if each insurer contributes an equal share until the share of each insurer equals the lowest applicable limit of liability under any one policy or the full amount of the loss is paid, and with respect to any amount of loss not so paid the remaining insurers then continue to contribute equal shares of the remaining amount of the loss until each such insurer has paid its limit in full or the full amount of the loss is paid. 62 2. Contribution by Limits: If any of such other insurance does not provide for contribution by equal shares, the Company shall not be liable for a greater proportion of such loss than the applicable limit of liability under this policy for such loss bears to the total applicable limit of liability of all valid and collective insurance against such loss. 63 National Union's policy contains similar language: 64 If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. 65 If any of the other insurance does not permit contribution be equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 66 Under the law of New York, these clauses require us to find that National Union and Capital Mutual should contribute by equal shares to the defense of Abalene and Blank. J.P. Realty, 102 A.D.2d at 73, 476 N.Y.S.2d at 329. Accordingly, we vacate the order of the district court entered on August 16, 1993, and direct that National Union and Capital Mutual contribute equally to the defense of Abalene and Blank.