COURT DECISIONS

Rough Notes, Apr 2006

The court then addressed the issue of whether Reliance could recover $150,000 from Continental. Again, it agreed with the lower court. The details of the settlement agreement confirmed that Continental had fulfilled its obligation, and that Reliance, had it gone to trial, would not have been required to pay the first $750,000 of a judgment against it. In addition, the court noted that Missouri courts have not recognized a duty of good faith between primary and excess insurers; however, even if they had, there was no evidence of a breach of duty on the part of Continental.

Finally, the court turned to the issue of attorney's fees and prejudgment interest. The court noted that Missouri law authorizes prejudgment interest. Therefore, it reversed the lower court's decision denying interest and remanded the case to the district court to determine a date on which the interest on the $41,244.25 began to accrue.

The case was affirmed in part, reversed in part, and remanded to the district court for a determination on the interest issue.

Reliance Insurance Company in Liquidation vs. Chitwood-No. 05-1446-United States Court of Appeals, Eighth Circuit-January 10, 2006-433 Federal Reporter 3d 660.