Great American Insurance Company of New York et al. v. Federal Insurance Company et al.

This is a dispute between two insurance companies, each of which provided liability insurance for a Captain D’s restaurant in Mississippi. The defendant, Federal Insurance Company, provided the primary coverage for Captain D’s with policy limits of $1,000,000. The plaintiff, Great American Insurance Company of New York, provided excess coverage for the benefit of Captain D’s. When an action was filed against the insured in Mississippi for serious and permanent injuries sustained by a 15 year-old minor at a Captain D’s, Federal provided the defense for Captain D’s. The jury returned a verdict of $20.8 million against Captain D’s. The next day, Federal sent a letter to its insured, Captain D’s, and to the excess carrier, Great American, offering to pay its policy limits of $1,000,000 toward the judgment; however, Federal’s “offer to pay” was not communicated to Foradori, the plaintiff in the Mississippi action. Federal appealed the $20.8 million Mississippi judgment on behalf of Captain D’s, but the judgment was affirmed. Post-judgment interest of $2,269,169 accrued during the appeal. When the judgment became final, Federal paid its policy limits of $1,000,000, but no interest. Great American paid the balance of the judgment plus all of the post-judgment interest.