Resolution of Settlement Conflicts among Insureds, Primary Insurers, and Excess Insurers: Analysis of the Current State of the Law and Suggested Guidelines for the Future

I. Introduction II. The Right of One Party to a Settlement Dispute to Settle Over the Objections of the Other and Obtain Financial Contribution from the Objector: Seeking Refuge before the Storm ... A. Insured's Right to Settle the Claim and Force the Objecting Carrier to Pay Its Share of the Settlement ... 1. Insurer's Refusal to Defend as Empowering the Insured to Settle ... 2. Insurer's Bad Faith as Determinant of the Insured's Power to Settle ... 3. Insurer's Conditional Defense as Empowering the Insured to Settle ... B. Excess Insurer's Right to Settle the Claim against the Insured and Obtain Reimbursement of the Objecting Primary Carrier's Limits of Coverage ... C. Insurer's Right to Settle and Sue the Insured for Its Deductible, Self-Insured Retention, or Participation III. Imposition of Excess Liability for Failure to Settle: Allocating Liability for the Damage Done by the Storm ... A. Insurer's Excess Liability in Action Brought by Insured Following Insurer's Refusal to Settle within Policy Limits ... 1. Fraud as the Standard for Imposition of Excess Liability ... 2. Good Faith as the Standard for Imposition of Excess Liability ... 3. Negligence as the Standard for Imposition of Excess Liability ... 4. Strict Liability as the Suggested Standard for Imposition of Excess Liability ... B. Excess Carrier's Right to Recover Excess of Adverse Verdict over Settlement Demand from Primary Carrier Which Refused to Settle Claim against Their Joint Insured ... 1. Equitable Subrogation ... 2. Contractual Subrogation ... 3. Direct Duty Owed by Primary Carrier to Excess Carrier ... 4. Triangular Reciprocity ... 5. Cases Disallowing Recovery ... C. Insurer's Right to Recover Excess of Verdict over Settlement Demand from Insured Which Refused to Give Required Consent or to Post Necessary Sums under Deductible, Self-Insured Retention, or Participation Provisions of its Coverage IV. Conclusion