United States Sixth Circuit

In a suit by an excess insurer against a primary insurer that refused to settle a tort claim and lost at trial for amounts greater than its coverage limits, dismissal of a bad faith claim is reversed where Kentucky law: 1) permits an insured to sue a primary insurer for bad faith failure to settle a claim; and 2) recognizes the doctrine of equitable subrogation that allows an insurer to sue in the place of an insured. Dismissal of a failure to investigate claim is affirmed, however, where an insured does not have a cause of action under Kentucky law against its insurer for failing to discover the insured's other sources of insurance.

Appellate Information

• Decided 07/30/2007
• Published 07/30/2007

Judges

• Before:  RYAN, DAUGHTREY, and ROGERS, Circuit Judges.

Court

• United States Sixth Circuit

Counsel

• For Appellees:
  
• ARGUED:  Barry M. Miller, Fowler, Measle & Bell, Lexington, Kentucky, for Appellant.  Douglas L. Hoots, Landrum & Shouse, Lexington, Kentucky, for Appellee.   ON BRIEF:  Barry M. Miller, Fowler, Measle & Bell, Lexington, Kentucky, for Appellant.  Douglas L. Hoots, Landrum & Shouse, Lexington, Kentucky, for Appellee.