Court Opinion

ID: 8168214
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:05:36.931811+00
Date Added: 2024-06-11T16:39:42.145729
License: Public Domain

CROCKETT, Chief Justice
(dissenting):
I appreciate the effort of the main opinion to find a just and logical solution to the dilemma presented where two insurance policies would each cover the same loss, absent the other, and where each insurance company is attempting to shunt liability to the other. While not controlling, it is noteworthy that the opinion arrives at a conclusion opposite to that arrived at by the trial court, and of the dissent, who with similar purpose, appear to have approached the matter from a slightly different point of view’ and, with what I think is equally plausible logic, arrived at the opposite result. This, for me, emphasizes the desirability of the practical solution which I suggest would be fair and equitable: that where two insurance policies would each cover the same loss, that is, where either of them would have to pay the loss if the other did not exist, they should each pay their equitable share of the loss.
If we reject that solution and try to fix responsibility solely upon one or the other insurer, serious problems are encountered. There is presented a veritable verbal optical illusion, comparable to the cleverly drawn visual optical illusions, which can be seen as varying different forms, depending on the perspective; and the outcome depends upon the point of view from which the problem is approached. For example, here it can be argued with plausibility that at the time Rowley misappropriated the funds from Prudential, St. Paul Indemnity covered his peculation and should pay. If it did so, First American (Security Title) would escape liability. This it could do by relying on the exclusions under its policy which provide that it is to pay only for actual loss1 es suffered and also excludes damage from defects known to the insured; and that the defect was in fact known to the insured (Prudential) through the knowledge of its officer Rowley; and therefore, St. Paul Indemnity should pay, as ruled by the trial court.
On the other hand, it can be argued with equal plausibility that First American (Security Title) issued its policy when there was in fact an unreleased mortgage, which is the very loss it accepted its premium to cover, and that even though this resulted from Rowley’s peculations, the title company should pay. Wherefore, says St. Paul, if the title company pays, Prudential has suf*100fered no loss; and St. Paul is therefore not liable because of the provision in its policy for nonliability if there is other insurance to cover the loss. Involved with the latter is the question as to whether the other insurance is restricted to coverage of the same party, subject matter and risk. And there are other problems encountered in attempting to determine which of two insurers covering the same loss should be held liable. One is that a specific coverage is usually held accountable ahead of a general coverage. The argument proceeds thus: that since it was the first mortgage protection that was lost, this was specifically covered by title insurance policy, and that company should pay. Opposed to this is the argument that the foundational cause of the loss was the embezzlement by Rowley, which is specifically covered by St. Paul, wherefore, the latter should pay. And so we are led through circuitous rationalizations in an effort to fix liability on one insurer and to exclude the other, and are urged to see the answer to this problem as either black or white, in an area which, to me, is grey.
For the reasons above stated, in my opinion it would be more fair and realistic to rule that where there are two or more insurance coverages, each of which would be liable for a loss except for the existence of coverage by the other, each should bear its fair share of the loss. This would normally mean that if the loss is within their policy limits, they should share equally in paying it. That is the order I would make in the instant case.
ELLETT, J., being disqualified, did not participate herein.