In Davis v. Great Northern Insurance Co., No. 23-10137 (11th Cir. 6/3/2024), insured apartment building property management company Akam was sued by a tenant alleging Akam’s negligence maintenance of a drainpipe caused mold inside her apartment resulting in bodily injury. Akam was a named insured under liability policies issued by AmTrust and Chubb. AmTrust agreed to defend under a reservation of rights. Akam notified Chubb of the suit which responded with a monitoring under reservation of rights letter acknowledging that AmTrust was defending. Chubb later notified Akam that it was exercising its right to participate in the defense under a reservation of rights. Akam rejected Chubb’s defense offer and entered in a Coblentz agreement with plaintiff which included a consent judgment in favor of plaintiff. Plaintiff filed suit against Chubb to collect on the consent judgment. The federal district court entered summary judgment for Chubb. On appeal, the Eleventh Circuit affirmed, agreeing with the trial court that “no reasonably jury could find that Chubb refused to defend Akam.” The opinion is ambiguous as to whether the Chubb policy was a true excess policy or a primary policy excess to the AmTrust policy by virtue of an “other insurance” analysis. Regardless, the court assumes that Chubb “had some duty to defend Akam,” emphasizing that Akam was at all times being defended by AmTrust, that Chubb expressly stated that it was not denying coverage, and that Chubb never refused to defend.
Eleventh Circuit Says Consent Judgment Not Enforceable Against Insurer Which Did Not Refuse to Defend Insured
