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Court is forced to delineate duties of two insurers who provided coverage for severe accident

Kenneth Harthen, a diabetic, passed out at a business meeting.  He then left the meeting to secure something to eat to raise his blood sugar.  Before he found food, however, he passed out again and collided with a vehicle occupied by the family of Linda Kalabat.  Eventually, Kalabat secured a judgment in the amount of $2 million dollars against Harthen and his employer, Alta Lift Truck.

Allstate insured Harthen's car with a $100,000.00 limit of liability.  Westfield insured Alta for negligence, with a primary policy of $2,000,000.00 and an excess policy of 10 million dollars.  Westfield spent more than half-a-million dollars defending against Alta's responsibility as Harthen's employer, before conceding the accuracy of a court ruling that Harthen was engaged in Alta's business when Harthen's negligence caused injury to Kalabat.  It then paid out the $2,000,000 dollar settlement and sued Allstate for contribution to its defense costs.  Allstate convinced the trial judge that its costs should be limited to $100,000.00, its policy limit. 

On appeal, the  Court of Appeals panel noted that Allstate's liability for costs did not begin until Kalabat joined a claim of respondeat superior, i.e., Alta liability for the negligence of an employee.  From that point on, however, as a primary insurer, Allstate owed at least a pro rata share of defense costs until it tendered its policy in settlement.  This contribution would not be limited by the liability coverage limits.  The case was returned to the lower court to determine Allstate's actual liability for indemnity.
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