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Judging from the electronic docket of the case, the parties and their lawyers in the case of Travelers Indemnity Co. of Connecticut v. Old Dominion Insurance Co. (M.D. Fla. Case No. 8:19-cv-T-30AAS) obviously want to settle.
The docket activity since this case was filed in 2019 has involved offers of judgment/settlement, mediation, case management scheduling deadlines, and an expert witness matter. There has not been any dispositive motion filed. In particular, there has been no motion to dismiss.
On September 24, 2020, the U.S. Magistrate Judge assigned to the case entered a discovery order granting in part and denying in part TIC's motion to compel production from Old Dominion. The Westlaw publication of this order does not show that it was entered by the Magistrate Judge, but I learned who entered it when I reviewed the electronic docket of the case on PACER. See Travelers Indem. Co. of Conn. v. Old Dominion Ins. Co., Case No. 8:19-cv-T-30AAS, 2020 WL 5701816 (M.D. Fla. Sept. 24, 2020).
TIC a/k/a Travelers sued Old Dominion "for equitable subjugation or, in the alternative, equitable contribution" for failure to indemnify a common insured. Travelers, 2020 WL 5701816, at *1. Later in the case, the Magistrate Judge who entered the September 24 order said that "Travelers sues Old Dominion for equitable subjugation and equitable indemnity[.]" Travelers, 2020 WL 5701816, at *4.
I am an Insurance Coverage lawyer and I have never heard of "equitable subjugation." Have you? This alleged claim would later determine the outcome, as we will see below. (The opinion cited one case, which involved equitable subrogation, so despite the words used in the Travelers case, maybe that is what was meant in this case, namely, equitable subrogation. Again, the alleged claim determined the outcome here, see below.)
I am also not familiar with "equitable contribution" between liability insurance carriers under Florida law, at least by that name or in the context of this case. Unless Florida law has changed substantially, there is no cause of action between insurers for "equitable indemnity," either. I have heard of equitable subrogation, and I have heard of contribution, and I have even heard of indemnity, but not "equitable contribution" or "equitable indemnity," either, particularly as an alternative to something called "equitable subjugation."
If only a motion to dismiss had been filed in the case. Perhaps this could have been cleared up by now. On the road to settlement, perhaps this has been overlooked but since the parties and their lawyers are continuing on the road to settlement, it seems, perhaps the USMJ's two rulings on September 24 will hasten that conclusion to this matter.
The first ruling was to declare that the defense lawyer ("Attorney Metzger"), Old Dominion, and the insured enjoyed a "tripartite relationship." The insured executed an assignment to Travelers and so, the court ruled, Travelers became the insured's "successor in interest" to this tripartite relationship. "Thus, Old Dominion's attorney-client privilege objections to the production of correspondence between Old Dominion and Attorney Metzger are overruled. Old Dominion must produce those withheld documents." Travelers, 2020 WL 5701816, at *2.
Second, Travelers sought to compel production also of Old Dominion's claim files in the underlying case against the common insured. The Magistrate Judge responded to Travelers' claim that it really was like a plaintiff in a bad faith case because it had alleged "equitable subjugation claims." Travelers, 2020 WL 5701816, at *2.
Old Dominion raised the qualified immunity of work product and also argued that "this is not a bad faith claim." The Magistrate Judge held in favor of Old Dominion on this issue. The USMJ based this outcome on the claim or cause of action alleged in this case: "But Travelers does not assert a bad faith claim against Old Dominion; rather, Travelers asserts a claim of equitable subjugation. Thus, the work-product doctrine applies to Old Dominion's claim file." Travelers, 2020 WL 5701816, at *3.
So, in the end, the lesson of this case may be that bad faith by another name does not smell like bad faith. Or, perhaps, at least it need not be an insurmountable obstacle to settlement.
P.S. from another Insurance Coverage lawyer: "Equitable subjugation strikes me as the quintessential oxymoron. It sounds like a theory slaveholders might have invoked to support the trope that Blacks are better off under slavery than free."
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