Thursday, June 24, 2010

Decision in 'Johnson Controls, Inc. v. London Market' 2010 WI 52

Wisconsin Supreme Court decision today in this case (2007AP1868), on certification by the Court of Appeals, affirming the Circuit Court. See Argument.

Opinion by Justice Bradley, joined by Chief Justice Abrahamson, and Justices Crooks and Prosser.
¶4 Based on the language of the policies, we conclude that London Market had a duty to defend. Although its excess umbrella policy does not have a duty to defend provision, it does contain a follow form provision that incorporates the duty to defend found in the underlying Travelers policies.

¶5 We further determine that its duty to defend was not conditioned upon exhaustion of the underlying Travelers policies. Rather, under the terms of the "other insurance" provision, London Market's duty to defend was triggered when the underlying insurer "denie[d] primary liability under its policy."
Dissent by Justice Ziegler, joined by Justices Roggensack and Gableman.
¶100 ... the London Market policy does provide terms other than the "other insurance" clause in the Travelers policy. As such, the Travelers policy's "other insurance" clause cannot be incorporated into London Market's policy, even under the majority's logic.[citation omitted]
...
¶110 ... the London Market excess umbrella policy states: "[L]iabilities shall attach to [London Market] only after the Underlying Umbrella Insurers have paid or have been held liable to pay" their policy limits. Thus, despite the majority's creativity, any assumed duty to defend under the excess umbrella policy cannot arise when the coverage under the excess umbrella policy is yet to be invoked.

Excess insurers have duty to defend under “follow form” provision if not expressly disclaimed, by Joe Forward, State Bar of Wisconsin