In Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599 (Iowa March 8, 2019), two liability insurance carriers covered two at-least-nominally separate insureds.
One carrier issued what was described by the Court as a CGL policy to a limited liability company that owned a farmhouse.
The other carrier issued a homeowner's policy to at least one of the co-founders of the LLC. The co-founder was also apparently insured under the CGL policy as an officer of the LLC.
A loaded rifle was left at the farmhouse for several months. As loaded rifles will do, it accidentally discharged into a human being, killing him.
The Homeowner's carrier and the individual insured together "settled the death claim for $900,000 and sued the CGL insurer for reimbursement. The case proceeded to a bench trial, and the district court entered judgment against the CGL insurer for $450,000, rejecting various coverage defenses." Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599, at *1 (Iowa March 8, 2019). On appeal to the Supreme Court of Iowa (bypassing the Iowa intermediate appellate court for some reason known only in Iowa perhaps), the Supreme Court of Iowa affirmed.
The Supreme Court looked at the coverage dispute this way:
The principal fighting issue is whether the LLC, as owner of the farmhouse, had potential liability under a premises liability theory for a dangerous condition (the loaded, unsecured rifle left on a bed for several months). On our review, we conclude the district court correctly interpreted the CGL insurance contract, and its factual findings on potential liability and the reasonableness of the settlement are supported by substantial evidence. For the reasons explained below, we affirm the district court judgment.
Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599, at *1 (Iowa March 8, 2019). That view of things naturally disposed of the CGL carrier's appeal. Where as here liability coverage follows potential liability, the likely result is pretty clear.
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