American States Insurance v. Maryland Casualty Co.

JOHNSON, Judge:

In this action, we are asked to determine whether American States Insurance Company, an umbrella insurer, may maintain an action for bad faith grounded on equitable subrogation against Maryland Casualty Company, the primary insurer. Concluding that an umbrella insurer, in breach of its duty to defend, may not maintain an action for bad faith against the primary insurer based on equitable subrogation, we affirm.

American States Insurance Company brought this action against Maryland Casualty Company alleging bad faith in the defense, negotiation and settlement of the underlying…