As we explained in our case summary, the question in this case was whether the follow-form provision of an excess insurance policy required the excess insurer to pay post-judgment interest on amounts it was responsible for paying on a liability judgment, matching the primary insurer’s liability under the primary insurance policy. In a 5-2 decision, the Court (DiFiore, C.J.) held that the primary insurer’s contractual liability for post-judgment interest did not also obligate the excess insurer to pay post-judgment interest. Judge Fahey and Judge Wilson each authored separate dissents.
The majority’s analysis rested on the language of the policies. As the majority reasoned, the excess policy obligated the excess insurer to pay losses in excess of the underlying insurance (i.e., the primary insurance) “without excluding any type of coverage” provided by that underlying insurance. This meant basically that the excess insurer was obligated to pay only those amounts that the primary insurer was not obligated to pay. And since the primary insurer had agreed to pay all post-judgment interest on a liability judgment, the excess insurer was not also obligated to pay that interest. True, the excess policy had a follow-form provision, meaning that the excess insurer’s liability was meant to mirror the primary insurer’s liability. But the majority held that the general follow-form provision was superseded by the specific language of the excess policy limiting the excess insurer’s liability to only those amounts that would not have been paid by the primary insurer.
Judge Fahey dissented. In his view, the follow-form provision created joint-and-several liability among the primary and excess insurers for all post-judgment interest. That is, each insurer “agreed that, to the extent it was responsible for part of a judgment against the insured, it would become responsible for all post judgment interest on the entirety of the judgment until it satisfied the part of the judgment for which it was responsible.” Judge Fahey thought this view was clear from the language of the policies, which did not confine liability for interest to the primary insurer, but added that he would have reached the same conclusion by construing the ambiguous policies in favor of coverage.
Judge Wilson also dissented. He noted that Judge Fahey’s interpretation of the policies was reasonable and preferable to the majority’s view under the rule that, where ”an insurance agreement is subject to multiple reasonable interpretations, the reasonable construction most favorable to the insured prevails.” But Judge Wilson offered another interpretation that, he thought, better comported with the parties’ intent: the primary insurer and the excess insurer was each liable to pay interest on its own portion of a liability judgment. Judge Wilson drew this interpretation from the structure of the agreements and the “basic purpose” of post-judgment interest. He also suggested that the majority’s application of the policies was confined to the “peculiar” facts and procedural posture of this case and would not have “much, if any, relevance to cases with more conventional facts.”