SRM v. Great American Insurance
Court: U.S. Court of Appeals for the Tenth Circuit Docket: 14-6160
Opinion Date: August 25, 2015
Areas of Law: Contracts, Insurance Law, Injury Law
A Union Pacific Railroad train t-boned an SRM dump truck as the truck crossed the tracks in the path of the train.
The collision killed the truck driver and derailed the train causing extensive damage to the train’s engines, its cars, and three of its workers.
The three injured train workers sued Union Pacific, SRM, and SRM’s primary auto liability insurer, Bituminous Insurance Company, in state court. Union Pacific cross-claimed against SRM and SRM counter cross-claimed.
As SRM’s excess liability insurer, Great American Insurance Company, received notice of the claims and monitored the case for potential exposure under its umbrella policy.
Under Oklahoma law, a primary insurer owes its insured a duty to initiate settlement negotiations with a third-party claimant if the insured’s liability to the claimant is clear and the insured likely will be held liable for more than its insurance will cover.
Here, SRM sought to extend this obligation to the Great American. Specifically, SRM claimed that Great American breached its insurance policy and duty of good faith and fair dealing by not proactively investigating claims against SRM and by refusing to tender its policy limits to spur settlement negotiations.
The district court granted Great American’s motion for summary judgment on SRM’s claims and denied SRM’s request to reconsider. The Tenth Circuit found no reversible error in the district court judgment and affirmed.