Fireman’s Fund Ins. Co. v. Evergreene Props. of N.C., LLC, 2007 U.S. Dist. LEXIS 571 (D. Ark. 2007)

Insurer issued two insurance policies to Defendant’s nursing home. When suit was filed in Arkansas, the insurer employed counsel to defend the action and paid all costs associated with the defense. Insurer asked Defendant to contribute to a settlement and when Defendant refused, the insurer funded the settlement. Insurer then brought an action for reimbursement. Defendant counterclaimed for breach of contract and bad faith. Defendant’s motion for summary judgment was denied; since insurer paid all defense costs and did not seek reimbursement of those costs, there was no breach or bad faith. Insurer’s request that Defendant participate in funding the settlement is not a breach of contract. Although insurer’s right to reimbursement is a disputed fact, Defendant’s motion was denied. In later proceeding, Fireman’s Fund Ins. Co. v. Evergreene Props. of N.C., L.L.C., 2007 U.S. Dist. LEXIS 18920 (D. Ark. 2007), court granted summary judgment after finding MLMIC did not breach insurance contracts when they fully funded settlement within policy limits or filed lawsuit; MLMIC fulfilled terms of contract when it paid all defense costs and settled suit, and Evergreen failed to present evidence of bad faith).

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