CNA wins dispute over coverage in tractor-trailer accident
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A CNA Financial Corp. unit has prevailed in a dispute with Hallmark Specialty Insurance Co. over coverage in connection with a tractor-trailer accident.
In May 2018, an accident occurred involving a tractor/power unit insured by Travelers Corp. unit Northland Insurance Co. and Hallmark Specialty, according to Tuesday’s ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Hallmark Specialty Insurance Co. v. The Continental Insurance Co.; National Fire Insurance Co. of Hartford.
The trailer was covered by a primary policy issued by CNA unit National Fire.
Northland defended the lawsuit that was brought against the tractor/power unit’s unit. To settle the litigation, Northland and Hallmark paid their policy limits of $1 million and $4 million, respectively, but Hallmark demanded CNA contribute to the settlement.
When CNA declined, Hallmark filed suit in U.S. District Court in Pasadena seeking CNA’s policy limits of $1 million under theories of indemnification/equitable subrogation and unjust enrichment.
The district court ruled in CNA’s favor, and was affirmed by a three-judge appeals court panel.
The panel’s ruling cited a section of the California Insurance Code that states that a trucker’s insurance policy is primary for both a truck’s power unit and trailers, and other coverage is excess.
Applying this section of the code “gives rise to a conclusive presumption that Hallmark’s policy, which is the one offering coverage to an insured in the business of a trucker, is primary for both the tractor/power unit and the trailer,” the ruling said, in affirming the lower court’s decision.
Attorneys in the case had no comment or could not be reached for comment.
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