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Unigard Sec. Ins. Co. v. Murphy Oil USA

Supreme Court of Arkansas

January 29, 1998, Opinion delivered



 [*214]   [**736]  DAVID NEWBERN, Justice.

This is an insurance coverage case. Murphy Oil USA, Inc., the appellee, filed suit in Union County against a number of its insurance carriers seeking a declaration that the carriers were obligated under certain general comprehensive liability ("CGL") policies to indemnify Murphy Oil for a judgment for compensatory [***8]  and punitive damages previously rendered against it in a federal district court in Alabama. Prior to trial in Union County, certain insurance carriers settled with Murphy Oil, and others, such as Lloyd's of London and Century Indemnity Company (formerly California Union Insurance Company), won summary judgment and were dismissed from the case. The Union County jury returned a verdict in Murphy Oil's favor on its indemnification claims against appellants Unigard Security Insurance Company and Employers Surplus Lines Insurance Company ("ESLIC") but found against Murphy Oil on its indemnification claim against Associated International Insurance Company. Murphy Oil's motion for new trial as to Associated was denied.

The Trial Court entered judgment against Unigard and ESLIC for the amount that Murphy Oil had paid, with interest, in satisfaction of the underlying Alabama judgment, less the amounts that Murphy Oil had received through settlements with other  [*215]  insurance carriers, plus a statutory penalty and prejudgment interest. The Trial Court ruled that Unigard and ESLIC would be "jointly and severally" liable for a total judgment of $ 5,997,411.96. Unigard and ESLIC now appeal from the [***9]  judgment rendered against them. Murphy Oil brings a cross-appeal against Unigard and ESLIC and "contingent" cross-appeals against Associated, Century, and Lloyd's. Associated and Century bring contingent cross-appeals against Murphy Oil.

The parties raise numerous points on appeal. One point is entirely dispositive, however, and that is the threshold question whether the policies issued by the insurance carriers cover the liability that Murphy Oil incurred in the underlying Alabama suit. We hold that none of the policies involved in this case covers Murphy Oil's liability, and thus we reverse the judgment against Unigard and ESLIC and dismiss. We affirm on all cross-appeals. As we dispose of the case on the issue of coverage, it will be unnecessary to discuss or resolve the parties' other arguments.

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331 Ark. 211 *; 962 S.W.2d 735 **; 1998 Ark. LEXIS 54 ***

UNIGARD SECURITY INSURANCE COMPANY and Employers Surplus Lines Insurance Company, Appellants v. MURPHY OIL USA, INC., Appellee v. Associated International Insurance Company, Cross-appellee v. Lloyd's of London, Cross-appellee v. Century Indemnity Company, Cross-appellee

Prior History:  [***1]  Appeal from Union Circuit Court; C. David Burnett, Judge.

Disposition: Reversed and dismissed.


property damage, lease, policies, spills, coverage, damages, insured, breach of lease, occurrence, compensatory damages, punitive damages, island, petroleum, premises, insurance carrier, cross-appeal, district court, reasonable use, breach-of-lease, contamination, accidental, misrepresentation, contingent, trial court, jury award, lease term, trespass, insurance contract, limitations, provisions

Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Ordinary & Usual Meanings, General Overview, Ambiguous Terms, Unambiguous Terms, Plain Language, Question of Law, Contracts Law, Defenses, Ambiguities & Mistakes, Construction Against Insurers