A federal appeals court on Wednesday reversed a lower court and ruled in favor of a Great American Insurance Group unit in a dispute with Employers Mutual Casualty Co. over excess coverage in a wrongful death suit.

Gerald Decker, an employee of Venus, Texas-based Corona Management Ventures LLC, was driving a tractor trailer when he lost control and collided with two vehicles.

One woman died and a second sustained serious personal injuries, according to the decision by the 5th U.S. Circuit Court of Appeals in New Orleans in Great American Insurance Co. v. Employers Mutual Casualty Co.; Corona Management Ventures, LLC.

After extensive litigation, the parties settled all claims with a $7 million settlement agreement. While Employers Mutual and Liberty Mutual Insurance Group’s primary coverage covered the first $2.7 million of the settlement agreement without debate, excess insurers Great American and Employers Mutual disputed their respective liability for the remaining $4.3 million, the ruling said.

To end the underlying lawsuit, Great American paid the remaining balance and filed suit against Employers Mutual in U.S. District Court in Dallas seeking a declaratory judgment on the priority of coverage between the umbrella policies and damages for Employer’s alleged breach of its umbrella policy for refusing to fund the underlying settlement.

The district court assumed Employers Mutual was required to provide coverage before Great American but granted summary judgment to Employers Mutual, concluding Great American had failed to allocate damages between covered and noncovered claims.

The ruling was overturned by a unanimous three-judge appeals court panel. The panel agreed the EMC umbrella policy had priority of coverage and Great America was not obligated to pay into the settlement until the EMC umbrella policy had been exhausted.

On the allocation issue, the ruling said Great American had “submitted sufficient evidence to create factual dispute on allocation.”

“Because a fact finder could reasonably allocate damages, we hold that the district court erred in granting summary judgment,” the ruling said, in reversing the lower court and remanding the case for further proceedings.

Attorneys in the case did not respond to requests for comment.

In September, a federal district court ruled Great American was not obligated to defend or indemnify a marketing agency in litigation over a failed franchise arrangement.