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Columbia Casualty Company (Columbia) $12 million to $22
million
Hudson Insurance Company (Hudson) Co-insurer with Columbia
Upper Tier
Federal Insurance Company (Federal) Above $22 million
1 Continental and American Casualty hereinafter are
collectively referred to as Continental.
After the judgment had been communicated to the insurance
companies, and while the appeal of the judgment was pending,
petitioner learned that Mission had been declared insolvent, and
Western was functionally insolvent. The insolvency of these two
companies created an uninsured gap in Harte-Hanks' coverage
between the $2 million and $12 million levels, which Harte-Hanks
had to cover to activate coverage at the upper levels.
The Settlement Agreement
On January 17, 1991, after prevailing at the trial level but
before he was aware that the two insurance companies were
insolvent, petitioner attempted to settle the entire case with
Harte-Hanks for $21 million; $9,500,000 to settle the actual
damages and $11,500,000 to settle the punitive damages. Although
this offer was rejected, the parties continued to negotiate.
On February 25, 1991, after he became aware of the insurance
companies' insolvency, petitioner authorized his attorneys to
settle with the lower tier insurance companies (the first $22
million of coverage) for $8,500,000, and to make a demand for
settlement upon the upper tier insurance company (Federal) for
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Last modified: May 25, 2011