Principal Casualty Insurance Co. v. Norwood

NEUMAN, Justice.

This appeal involves cross-motions for summary judgment in an action to declare the rights of parties competing for subro-gation proceeds. The question is whether Iowa Code chapter 668 (1989) authorizes an insured to retain a reasonable attorney fee out of subrogation proceeds claimed by an insurer when the recovery stems from settlement with, rather than verdict or judgment against, a third-party tortfeasor. We conclude that section 668.5 authorizes the deduction claimed by the insured, and therefore reverse the district court’s judgment favoring the insurer.

The facts are…