Excess Carrier Represented by Brown Sims Prevails in Stowers Dispute

Brown Sims is pleased to announce that the United States Court of Appeals for the Fifth Circuit has affirmed a verdict it obtained following a jury trial in the U.S. District Court for the Southern District of Texas. The case, Westport Ins. Co. v. Pennsylvania Nat’l Mutual Casualty Insurance, involved a dispute between primary and excess carriers over responsibility to pay an excess judgment rendered against their mutual insured following the primary carrier’s refusal to accept multiple settlement demands within its primary limits. The excess carrier, Penn National, paid a portion of the excess judgment, and was thus found to be an equitable subrogee of the mutual insured. This status entitled Penn National to pursue claims against the primary carrier for breaches of the common law Stowers doctrine. A jury found that the primary carrier breached its duties under Stowers, and that verdict was affirmed by the Fifth Circuit in a decision published on September 18, 2024. This represents a significant victory for the excess carrier and reinforces the obligation of primary carriers to prudently evaluate settlement demands covered by their policies that fall within policy limits. John G. H. Davis, Michael D. Williams, and Nicholas J. Cenac represented Penn National in the jury trial. Kenneth G. Engerrand and Nicholas J. Cenac represented Penn National in the appeal.