Download PDF - Goodmans

purposes of joint and several liability. Accordingly, similar to other joint and
several liability situations, the judgment creditor may seek satisfaction of the
judgment from PPCIGA for the whole judgment or the statutory cap on
PPCIGA’s liability, whichever is lower. The court reasoned that if PPCIGA was
also held liable, the burden of one insurer’s insolvency is spread across all
Pennsylvania insurers, which is within the purposes of creating PPCIGA.
West Virginia The West Virginia Insurance Guaranty Association v. Potts, 214 W.Va. 332, 589
S.E.2d 216 (2003). In a prior case of the same name, the West Virginia Insurance
Guaranty Association (WVIGA) sought declaratory judgment that claims by
patient, her husband, and their three children in connection with physician's
failure to diagnose breast cancer represented only one covered claim under the
West Virginia Insurance Guaranty Act. The Supreme Court of Appeals reversed
and remanded lower court ruling to enter an order consistent with the opinion
that loss of consortium claims presented for payment under WVIGA by a
medical malpractice victim's spouse and children are separate and distinct
covered claims, and each compensable claim is subject to the statutory per
claim limit of $300,000 up to the maximum liability of the insurance policy issued
by the insolvent insurer. On remand, the WVIGA moved to interplead $70,000
as total payment for the additional covered claims. Mrs. Potts had previously
received $400,000 from the medical defendants and WVIGA had reimbursed
those defendants for $300,000, its statutory maximum on the claim.
Nonetheless, Mrs. Potts sought an additional $300,000 from WVIGA. The lower
court entered summary judgment in favor of WVIGA holding that the money
previously distributed to the Medical defendants by WVIGA in Potts I was in
partial satisfaction of the Appellants’ claims and could be offset against further
claims by the Appellants. The patient, husband, and children appealed. The
Supreme Court of Appeals held that WVIGA's payment of $300,000 to insured
tort‐feasors satisfied its obligation, and, thus, patient was not entitled to
payment from the WVIGA in addition to amounts already paid by the tortfeasors
pursuant to settlement agreement.
Obligation to Pay Covered Claims – Defense of Claims
Eighth Circuit
Rodgers v. Missouri Ins. Guar. Ass’n, 841 F.2d 858 (8th Cir. 1988). An insured of
an insolvent insurer failed to give timely notice to the Fund that an adverse
summary judgment had been entered. The court held that the Fund could not
be bound by the judgment because there was no reasonable opportunity to
defend.
California Saylin v. California Ins. Guar. Ass’n, 179 Cal. App. 3d 256, 224 Cal. Rptr. 493
(1986). The Fund is generally obligated to defend an insured to the same extent
as would the insolvent insurer.
Louisiana
Rhode Island
Texas
Horton v. State Farm Ins. Co., 641 So.2d 993 (La. Ct. App. 1994). The Fund does
not have a duty to defend an insured on a non‐covered claim, excluded from
coverage by statute, such as a subrogation claim.
Bassi v. Rhode Island Insurers’ Insolvency Fund, 661 A.2d 77 (R.I. 1995). The
Fund has no duty to defend a claim that is not timely filed.
Texas Prop. & Cas. Ins. Guar. Ass’n v. Southwest Aggregates, Inc., 982 S.W.2d
600 (Tex. Ct. App. 1998). The court held that the Fund had no duty to defend
where a solvent insurer had a duty to defend. The insured must exhaust those
rights first.
Obligation to Pay Covered Claims – Late Filed Claims