Mississippi District Court Finds Other Insurance Provisions Cancel Each Other Out

In EMJ Corp. v. Hudson Specialty Ins. Co., (2015 U.S. Dist. LEXIS 29781, 14-15, N.D. Miss. Mar. 11, 2015) the plaintiffs, EMJ Corporation and Westchester Fire Insurance Company, brought this declaratory judgment action against Defendant Hudson Specialty Insurance Company. They were seeking a declaration that Westchester was entitled to contribution from Hudson Specialty for the amount Westchester paid on behalf of EMJ in a settlement of an underlying personal injury action.

In partially granting the defendant’s motion for judgment notwithstanding the verdict and denying the plaintiffs’ motion for further relief, the United States District Court for the Northern District of Mississippi, Delta Division found that the Westchester Policy and the Hudson Policy were both true excess policies that had mutually repugnant other insurance provisions.

The court thus determined that each insurer owed its proportional share, pursuant to the umbrella/excess coverage language of its respective policy. Allocating the settlement based on the respective policies’ total available limits, the district court concluded that Westchester owed five-sixths of the indemnity obligation, meaning that Hudson Specialty was obligated to reimburse Westchester $666,666.67.

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