Recent Development by M. E. Burggraf
The suit arose out of an automobile accident between the plaintiffs and the negligent driver of a rental car. Transit Casualty Company (Transit Casualty), which was subsequently declared insolvent, was the primary insurer of both the rental car's negligent driver and National Rental Car Systems, Inc., the lessor. Great Northern Insurance Company (Great Northern) was an excess carrier, insuring the negligent driver's employer “for damages in ‘excess over any other collectable insurance.’”
Great Northern moved for summary judgment, arguing that the Louisiana Insurance Guaranty Association (LIGA) was responsible for the damages that the insolvent Transit Casualty was unable to pay. The trial court granted Great Northern's motion and ordered LIGA to pay the damages awarded to the plaintiffs. The court based its judgment on the theory that LIGA became the primary insurer when Transit Casualty was declared insolvent. The Third Circuit Court of Appeal affirmed, but the Louisiana Supreme Court reversed, holding that “Great Northern as excess carrier should automatically ‘drop down’ to cover Transit Casualty's exposure.” Nasello v. Transit Casualty Co., 530 So. 2d 1114 (La. 1988).
About the Author
M. E. Burggraf.
Citation
64 Tul. L. Rev. 259 (1989)