Insured Required To Pay $500,000 SIR Even Though It Did Not Consent To Settlement

Stan Koch & Sons Trucking, Inc. v. Great West Casualty Co., 2006 WL 2331181  (D. Minn. August 10, 2006) is a real page-turner, or more accurately, as close as a court’s opinion in a coverage case ever gets to being a page-turner.  The case was unusual in that the insured, a trucking company,  wound up arguing there was no coverage because it didn’t like the fact that its insurer settled a case for $750,000, which forced the insured to pay the $500,000 Self-Insured Retention in the policy.  The court agreed with the insurer, based on the language of the policy that the insured’s consent is not required. 

The case involved a tragic death in a traffic accident, numerous complicated relationships between corporations, and a rare insight in caselaw to how a coverage attorney’s thinking about the case changed over time (and fortunately, he acknowledged his change of opinion and told his client about it, instead of doggedly sticking to a course of action that was now discredited in his own mind).  The details are too complicated to go into here, but one of the things that really ticked off the insured was that the insurer initially thought both that there was no coverage and that the verdict would be favorable in the underlying wrongful death case.  Then after the insurer changed its mind on coverage and the jury came back with a $2.7 million verdict, the insurer rushed out to settle another related case for $750,000, putting the insured on the hook for most of the money.  

I have one quibble with this case. In Footnote 9, the court uses the "makes much" phraseology that appears to exist nowhere but in legal writing and which I find totally repugnant.  Here is the key part of the sentence: "Koch makes much of the fact that the decision by Great West to accept coverage was a ‘strategic’ one . . . ." Can we all please stop writing "makes much"?  It’s not a term of art, a lot of substitute phrases exist, it’s ugly, and it has a particularly grating tone about it, kind of smart alecky, kind of schoolmarmish, kind of hostile in a dandified, shirt-ruffle way. How about this instead? "Koch criticizes Great West’s belated decision to accept coverage," or "Koch suggests that Great West underwent a deathbed coverage conversion, and that this should be held against it." 

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