Opinion ID: 1245297
Heading Depth: 3
Heading Rank: 2

Heading: Brooks and Larson

Text: The Association argues on one hand that it was not bound by Aztec's settlement agreements with Brooks and Larson because Mission did not approve or ratify the agreements. After its insolvency, neither Mission nor the Association participated in the settlement negotiations. The Association contends that the District Court had to conclude that it was bound by the settlement agreements to justify an award to the claimants. On the other hand, the Association argues that if it were bound, it would be liable only for amounts paid to Brooks and Larson under the settlement agreements. Again, the Association misses the point. To constitute a covered claim under the Act, the District Court did not have to conclude that the Association was bound by the settlement agreements with Brooks and Larson. The District Court correctly analyzed the statute and found that their damages exceeded the proceeds available under Aztec's primary insurance policy, thus bringing Mission's excess policy into effect. Because Mission became insolvent and their claims remained unpaid, the Association's statutory liability was triggered. Brooks and Larson, therefore, were entitled to an award of $100,000 each under the Act. Any settlement agreement by Aztec with Brooks and Larson was irrelevant to whether they had a covered claim under the Act. The Association undertook Mission's obligations under the excess insurance policy, not Aztec's obligations under its settlement agreements. The District Court, therefore, was correct in holding that both Brooks and Larson were entitled to an award from the Association.