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COMMERCIAL UNION INS. CO. v. MED. PRO. CO.

Docket No. 74912, (Calendar No. 16).

426 Mich. 109 (1986)

393 N.W.2d 479

COMMERCIAL UNION INSURANCE COMPANY v. MEDICAL PROTECTIVE COMPANY

Supreme Court of Michigan.

Decided September 17, 1986.

Attorney(s) appearing for the Case

MacArthur, Cheatham, Acker & Smith, P.C. (by Brian J. Doren and James G. Gross), for the plaintiff.

Moll, Desenberg, Bayer & Behrendt (by Jon P. Desenberg and David J. Franks) for the defendant.

WILLIAMS, C.J.

The issue in this case is whether an excess insurer has a cause of action against a primary insurer for the latter's failure to defend or settle a liability claim in good faith. Courts have recognized such a cause of action under at least two theories: 1) the primary insurer owes a duty to act in good faith toward its insured, and the excess insurer is equitably subrogated to the position of the insured, and...

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