Court Opinion

ID: 8940641
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:54:47.626415+00
Date Added: 2024-06-11T17:09:43.728938
License: Public Domain

PATRICK E. HIGGINBOTHAM, Circuit Judge,
concurring in part and dissenting-in part:
I concur with Judge Garza’s thoughtful opinion except its holding that even though Ideal provided a defense to the claim against the Myers Estate, it may not enforce the “No Voluntary Assumption of Liability” clause in its policy. The panel justifies this result by reasoning that the settlement between the Myers Estate and the Strothers did not prejudice Ideal because Ideal retained its right to contest coverage, overlooking the probability that the Myers Estate, by settling, conceded liability for the death of Phillip Strother. Before settlement, Ideal could have asserted not only non-coverage, but also that its *1206insured, John Myers, was not negligent in the airport accident — and thus that the Myers Estate was not liable even if there were coverage. A settlement that concedes liability by an insured is exactly the prejudice the policy provision was intended to prevent, and this is why the district court stated that “this case is precisely the type of case in which the insurance company is entitled to insist on compliance for its own protection.” (emphasis in original).
On remand, I would leave for trial the question of whether the apparent concession of liability by the Myers Estate in the settlement agreement has prejudiced Ideal. Because the record suggests and the insured asserts that the defense provided by Ideal in the Strother’s suit may have been less than adequate, I would also leave for trial the question of whether the duty to defend obligation was so breached by Ideal as to allow the Myers Estate to settle.