674 S.E.2d 197
David S. Hart
W. Richard Staton
Hayden & Hart, PLLC Moler, Staton, Staton & Houck, LC
Beckley, West Virginia Mullens, West Virginia
and
and
Mark F. Bruckmann (Pro hac vice) Peter N. Flocos (Pro hac vice)
Timothy G. Church (Pro hac vice) Melissa J. Tea (Pro hac vice)
Bruckmann & Victory, LLP
Kirkpatrick
& Lockhart Preston
New York, New York
Gates Ellis, LLP
Attorneys for the Appellants, Pittsburgh,
Pennsylvania
Certain Underwriters at Lloyd's,
Attorneys for the Appellees,
London, Subscribing to Policy
PinnOak Resources, LLC and
No. B0711
Pinnacle Mining Co., LLC
The Opinion of the Court was delivered PER CURIAM.
JUSTICE ALBRIGHT not participating.
SENIOR STATUS JUSTICE MCHUGH, sitting by temporary assignment.
8. “'The law favors and encourages the resolution of controversies by
contracts of compromise and settlement rather than by litigation; and it is the policy of the
law to uphold and enforce such contracts if they are fairly made and are not in contravention
of some law or public policy.' Syl. Pt. 1, Sanders v. Roselawn Mem'l Gardens, Inc., 152
W. Va. 91, 159 S.E.2d 784 (1968).” Syllabus point 5, Riner v. Newbraugh, 211 W. Va. 137,
563 S.E.2d 802 (2002).
9. “'Where parties have made a settlement . . . , such settlement is
conclusive upon the parties thereto as to the correctness thereof in the absence of accident,
mistake or fraud in making the same.' Syllabus point 1, in part, Calwell v. Caperton's
Adm'rs, 27 W. Va. 397 (1886).” Syllabus point 7, DeVane v. Kennedy, 205 W. Va. 519, 519
S.E.2d 622 (1999).
Per Curiam: (See footnote 1)
The plaintiffs below and appellants herein, Certain Underwriters at Lloyd's,
London (hereinafter “Lloyd's), appeal from an order entered April 11, 2007, by the Circuit
Court of Wyoming County. By that order, the circuit court granted summary judgment to the
defendants below and appellees herein, PinnOak Resources, LLC and Pinnacle Mining Co.,
LLC (hereinafter referred to collectively as “PinnOak”). Subsequently, the Circuit Court of
Wyoming County entered an order on June 21, 2007, denying Lloyd's motion to alter or
amend the April 11, 2007, order. In Lloyd's suit to collect a premium purportedly due under
Insurance Policy No. B0711 (hereinafter “Policy B0711”), the circuit court found that the
“Global Settlement Agreement and Release” (hereinafter referred to as “Settlement
Agreement”) represented the intent of the parties to depart from any previous agreements,
and further, that the premium was barred by the Settlement Agreement. On appeal to this
Court, Lloyd's argues that the premium due under Policy B0711 was not extinguished by the
Settlement Agreement and that the term “payback” referred to payment of the insurance
premium, not a payback of any settlement monies. Based upon the parties' arguments, the
record designated for our consideration, and the pertinent authorities, we reverse and remand
the decisions by the circuit court.
In 2003, PinnOak operated the Pinnacle Mine in Wyoming County, West Virginia. Various insurance companies, including Lloyd's, combined to provide property insurance to PinnOak totaling $75,000,000.00. Lloyd's explained that mining risks are large risks; thus, different insurance companies combined to spread the exposure so no insurer would be inordinately impacted by a large loss. Moreover, the insurance was broken up into “layers.” Each layer is a piece of the $75,000,000.00 coverage, and the layers are stacked on top of each other. Each insurer agreed to provide insurance for one layer and as soon as one layer is exhausted, the next layer would go into effect. Thus, each insurance company would only be responsible for a proportional amount of any loss incurred.
Lloyd's was one of the insurers of PinnOak in August 2003 when PinnOak
experienced a series of methane ignitions at its mines located in Pineville, West Virginia.
In February 2004, PinnOak filed suit against Lloyd's, and other insurers, to recover insurance
proceeds allegedly due under coverage policies in effect at the time of the methane ignitions.
PinnOak's suit claimed that Lloyd's (See footnote 2) breached insurance policies numbered AN0300335,
AN0300336, AN0300337, and AN0300338, and committed bad faith in its handling of
PinnOak's August 2003 loss related to the methane explosions.
Various insurers settled with PinnOak in 2004 and 2005. The remaining
insurers were the Lloyd's syndicates providing the upper layers of insurance coverage. On
May 30, 2006, PinnOak and the relevant Lloyd's syndicates entered into a “Global
Settlement Agreement and Release” (also referred to throughout this opinion as “Settlement
Agreement”). The Lloyd's syndicates paid their respective shares of a $56,000,000.00
settlement to PinnOak as a result of the 2003 methane ignition loss.
During the pendency of the litigation surrounding the methane ignition
coverage, Lloyd's (See footnote 3) agreed to further insure PinnOak. The record contains an initial contract
for insurance, purporting to extend coverage from June 30, 2004, to June 30, 2005, for a
premium of $5,000,000.00. Lloyd's argues that it soon became clear to PinnOak that it
would not have the necessary cash flow to pay the premium, as it was due up-front. As
asserted by Lloyd's, PinnOak's agent then contacted Lloyd's and proposed some alternative
terms to the insurance contract. (See footnote 4)
The subsequent policy, which is the relevant policy to this appeal, is known as
Policy B0711. This policy was for a term of five years, beginning June 30, 2004, and lasting
through June 30, 2009. An annual premium amount of $375,000.00 was due every year, and
then the amount of $1,250,000.00 would be due in five equal installments totaling
$6,250,000,00, but would be deferred until after settlement of the August 2003 loss. In the
event of nonrenewal, the entire amount would be due in full. Lloyd's states that this
provision was PinnOak's recommendation upon realizing that it would only have positive
cashflow after the 2003 event settled. (See footnote 5)
PinnOak elected not to renew the policy after the first full year. Subsequent
to this nonrenewal, PinnOak and Lloyd's entered into a Settlement Agreement in May 2006
regarding the coverage issues surrounding the 2003 methane ignitions. PinnOak did not pay
the premiums due under Policy B0711, which provided PinnOak coverage for the period of
time subsequent to the time involved in the coverage lawsuit. Lloyd's then filed the
underlying lawsuit on the theory that PinnOak had breached its obligations under Policy
B0711, which was to pay the premium in full since PinnOak elected to cancel the coverage
after the first year, and since the August 2003 incident and subsequent lawsuit had been
settled.
PinnOak filed a motion to dismiss. The circuit court considered matters outside
of the pleadings; thus, it converted the motion to dismiss into a motion for summary
judgment and disposed of the matter pursuant to Rule 56 of the West Virginia Rules of Civil
Procedure. In its decision entered April 11, 2007, the circuit court found that the Settlement
Agreement represented the intent of the parties to diverge from any prior agreements.
Therefore, the circuit court found that the obligations under Policy B0711 were terminated,
and that PinnOak did not owe the premium agreed upon in the policy. As further support for
its decision, the circuit court found that the use of the term “payback” in Policy B0711
referred to a recoupment of settlement monies, which was an action barred by the Settlement
Agreement. Lloyd's then filed a motion to alter or amend judgment, which was denied by
the circuit court on June 21, 2007. This appeal by Lloyd's then followed.
This case is before this Court on appeal from the circuit court's order granting
summary judgment in favor of PinnOak, and its subsequent denial of Lloyd's motion for
reconsideration pursuant to West Virginia Rules of Civil Procedure, Rule 59(e). (See footnote 6) It has long
been held that “[a] circuit court's entry of summary judgment is reviewed de novo.” Syl. pt.
1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). Further, the same de novo standard of review applies to the denial of the Rule 59(e) motion to alter or amend:
“'The standard of review applicable to an appeal from a
motion to alter or amend a judgment, made pursuant to W. Va.
R. Civ. P. 59(e), is the same standard that would apply to the
underlying judgment upon which the motion is based and from
which the appeal to this Court is filed.' Syllabus point 1, Wickland v. American Travellers Life Insurance Co., 204
W. Va. 430, 513 S.E.2d 657 (1998).” Syllabus point 2, Bowers
v. Wurzburg, 205 W. Va. 450, 519 S.E.2d 148 (1999).
Syl. pt. 1, Alden v. Harpers Ferry Police Civil Serv. Comm'n, 209 W. Va. 83, 543 S.E.2d 364
(2001).
Despite these longstanding principles, PinnOak urges this Court to apply an
abuse of discretion standard of review rather than a de novo standard. (See footnote 7) PinnOak contends
that, because the grant of summary judgment deals with a settlement agreement, this Court
has prescribed an abuse of discretion standard. See Berardi v. Meadowbrook Mall Co., 212
W. Va. 377, 381, 572 S.E.2d 900, 904 (2002) (per curiam) (“Our review here is further
circumscribed because it involves a settlement agreement and we have said that, 'when this
Court undertakes the appellate review of a circuit court's order enforcing a settlement
agreement, an abuse of discretion standard of review is employed.'” (quoting Devane v.
Kennedy, 205 W. Va. 519, 527, 519 S.E.2d 622, 630 (1999)).
We decline to adopt PinnOak's argument. The cases cited by PinnOak outline
a circuit court's discretion when confronted with a motion seeking to enforce a settlement
agreement. While we completely agree with the propositions of law declared in those cases,
we simply find them inapplicable to the present case. The present case surrounds two
documents, the Settlement Agreement and Policy B0711, and what, if any, connection there
is between the two documents. The Settlement Agreement in the present case is simply
ancillary to the complaint that seeks to enforce PinnOak's payment of a premium allegedly
due under Policy B0711. PinnOak originally filed a Rule 12(b)(6) motion to dismiss, which
the circuit court converted into a motion for summary judgment. As such, this opinion will
apply the de novo standard of review. Further guidance states that
“[t]he interpretation of an insurance contract, including
the question of whether the contract is ambiguous, is a legal
determination that, like a lower court's grant of summary
judgement, shall be reviewed de novo on appeal.” Syllabus
point 2, Riffe v. Home Finders Associates, Inc., 205 W. Va. 216,
517 S.E.2d 313 (1999).
Syl. pt. 2, Horace Mann Ins. Co. v. Adkins, 215 W. Va. 297, 599 S.E.2d 720 (2004).
In undertaking our de novo review, we apply the same standard for granting
summary judgment that is applied by the circuit court:
“'A motion for summary judgment should be granted
only when it is clear that there is no genuine issue of fact to be
tried and inquiry concerning the facts is not desirable to clarify
the application of the law.' Syllabus Point 3, Aetna Casualty &
Surety Co. v. Federal Insurance Co. of New York, 148 W. Va.
160, 133 S.E.2d 770 (1963).” Syllabus Point 1, Andrick v. Town
of Buckhannon, 187 W. Va. 706, 421 S.E.2d 247 (1992).
Syl. pt. 2, Painter, 192 W. Va. 189, 451 S.E.2d 755. Moreover,
[s]ummary judgment is appropriate where the record
taken as a whole could not lead a rational trier of fact to find for
the nonmoving party, such as where the nonmoving party has
failed to make a sufficient showing on an essential element of
the case that it has the burden to prove.
Syl. pt. 4, Painter, id. We are also cognizant that “[t]he circuit court's function at the
summary judgment stage is not to weigh the evidence and determine the truth of the matter,
but is to determine whether there is a genuine issue for trial.” Syl. pt. 3, Painter, id. Mindful
of these applicable standards, we now consider the substantive issues raised herein.
Lloyd's advances two arguments on appeal: (1) the circuit court erred in
finding that the word “payback” in Policy B0711 referred to a payback from the Settlement
Agreement, and (2) the circuit court erred in finding that the Settlement Agreement released
PinnOak's obligation to pay the premium due under Policy B0711. PinnOak responds and
argues that (1) the circuit court was correct in finding that Lloyd's breach of contract claim
against PinnOak was barred by the Settlement Agreement, (2) Lloyd's interpretation of
Policy B0711 is irrelevant and unreasonable, and (3) the case should be dismissed in
furtherance of this Court's long-standing policy of favoring and encouraging settlements.
A discussion of the Settlement Agreement and Policy B0711, and any possible
interconnection, will resolve all matters before this Court.
This lawsuit began when Lloyd's sued PinnOak for breach of contract in failing
to pay the premium listed in Policy B0711. In deciding this issue, the circuit court
determined that the contract of insurance in Policy B0711 was extinguished by the
subsequent Settlement Agreement. In so ruling, the circuit court found that
30. The alleged 2004 agreement [Policy B0711] was
both allegedly entered into and not renewed prior to the time the
parties entered into the “Global Settlement Agreement and
Release.” The alleged “payback” monies owed under this
alleged contract appear to be an alleged attempt by [Lloyd's] to
assure recovery of potential settlement monies directly resulting
from the August 2003 loss. The “ GLOBAL Settlement
Agreement and Release” (emphasis added) prevents [Lloyd's]
from attempting to seek reimbursement or contribution from the
settlement funds resulting from the August 2003 loss. At the
time the parties entered into the “Global Settlement Agreement
and Release” this alleged debt would have become outstanding.
The merger, anti-reimbursement and contribution, general
release, and indemnification provisions of the “Global
Settlement Agreement and Release” show the intent of the
parties to walk away from all disputes and outstanding claims
related to the August 2003 loss.[ (See footnote 8) ]
(Footnote added). We cannot agree.
This case deals with two documents: a contract for insurance coverage known
as Policy B0711 and a Settlement Agreement. As has been previously recognized, a
“[s]ettlement agreement is favored by law and is to be construed as any other contract.” Floyd v. Watson, 163 W. Va. 65, 68, 254 S.E.2d 687, 690 (1979) (internal citations omitted).
See also Syl. pt. 1, Burdette v. Burdette Realty Improvement, Inc., 214 W. Va. 448, 590
S.E.2d 641 (2003) (“'A meeting of the minds of the parties is a sine qua non of all contracts.'
Syl. pt. 1, Martin v. Ewing, 112 W. Va. 332, 164 S.E. 859 (1932).”). Relevant to all written
agreements, it has long been held that
“[a] valid written instrument which expresses the intent
of the parties in plain and unambiguous language is not subject
to judicial construction or interpretation but will be applied and
enforced according to such intent.” Syllabus Point 1, Cotiga
Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128
S.E.2d 626 (1962).
Syl. pt. 1, Wellington Power Corp. v. CNA Sur. Corp., 217 W. Va. 33, 614 S.E.2d 680
(2005). Moreover, “[t]he mere fact that parties do not agree to the construction of a contract
does not render it ambiguous. The question as to whether a contract is ambiguous is a
question of law to be determined by the court.” Syl. pt. 1, Berkeley County Pub. Serv. Dist.
v. Vitro Corp. of Am., 152 W. Va. 252, 162 S.E.2d 189 (1968). Further, with regard to Policy
B0711, “'[w]here the provisions of an insurance policy contract are clear and unambiguous
they are not subject to judicial construction or interpretation, but full effect will be given to
the plain meaning intended.' Syllabus, Keffer v. Prudential Ins. Co., 153 W. Va. 813, 172
S.E.2d 714 (1970).” Syl. pt. 2, West Virginia Fire & Cas. Co. v. Stanley, 216 W. Va. 40, 602
S.E.2d 483 (2004).
In applying the principles of contract construction and interpretation to Policy
B0711 and to the Settlement Agreement, we find that the circuit court erred in holding that
there is any connection between the two documents. By extension, we also find that the
circuit court's determination of the meaning of the word “payback” in Policy B0711 to be
unsupported. The circuit court found that provisions in the Settlement Agreement
extinguished PinnOak's duty to pay the insurance premium contracted for in Policy B0711.
The lower court found that “[t]he merger, anti-reimbursement and contribution, general
release, and indemnification provisions of the 'Global Settlement Agreement and Release'
show the intent of the parties to walk away from all disputes and outstanding claims related
to the August 2003 loss.” (See footnote 9)
An examination of the Settlement Agreement shows that it cannot extinguish
PinnOak's contractual obligation under Policy B0711. The Settlement Agreement only
applies to the 2003 “Loss” as defined by the agreement. “Loss” is defined in the Settlement
Agreement as
a dispute . . . over PinnOak's claim for business interruption and
other losses under the aforementioned policies of insurance, as
well as PinnOak's claims of bad faith by Insurers and VeriClaim
relating to and/or arising out of one or more methane
ignitions/explosions at the Pinnacle Mine beginning on August
31, 2003 (hereinafter referred to as the “Loss”) and the
subsequent claim handling and investigation.
The “Loss” definition referred to two specific insurance policies, both of which were in
effect at the time of the 2003 loss. The “aforementioned policies of insurance” are the
coverage policies that were in place in August 2003 at the time of the loss. The relevant
policy to our determination, Policy B0711, is not included in the Settlement Agreement. Any
mention of Policy B0711 is absent, even though it was entered into prior to the Settlement
Agreement. The Settlement Agreement, pursuant to its own definition of the “loss” that is
the subject matter of the agreement, settled the coverage action relating to the August 2003
methane ignitions. However, it did not release the parties from their agreement regarding
Policy B0711.
The circuit court found that the use of the word “payback” in Policy B0711 was
sufficient to tie the two documents together. In so finding, the circuit court determined that
the anti-reimbursement/contribution provision in the Settlement Agreement bars the premium
due under Policy B0711 as it is money paid after settlement of the 2003 loss and is, therefore,
reimbursement from settlement monies received. Supplanting the circuit court's
determination, PinnOak argues that the use of the term “payback” in Policy B0711 clearly
relates to the August 2003 loss, and is therefore, part of the Settlement Agreement. Further,
PinnOak avers that because Policy B0711 was entered into approximately two years before
the Settlement Agreement, the Settlement Agreement encompasses and extinguishes the
terms of the Policy B0711.
However, a true reading of Policy B0711 clearly shows that use of the word
“payback” in Policy B0711 refers to a payback of the premium due that was held in abeyance
until such time as PinnOak would have positive cashflow. The settlement of the August
2003 methane ignitions loss was the only event that would lead to PinnOak having the
necessary cash, so it was listed as the “triggering” event. Thus, the settlement was the trigger
necessitating payment of the premium. It was not a recoupment or recovery of any of the
settlement monies received by PinnOak.
In fact, a fair reading of the insurance policy shows that Lloyd's insured
PinnOak at great risk to itself. Under the terms of the contract, PinnOak only owed the first
installment after settlement of the August 2003 loss. Such a condition may never have come
to fruition. If no settlement had been reached, then PinnOak would have received insurance
coverage without ever paying the large premium for such coverage. Moreover, in Policy
B0711, under the heading “ PREMIUM:”, it is clear that the $1,250,000.00 annual premiums
are “Payback Annual, payable on settlement of the August 2003 loss[.]” This language
emphasizes that this payback is of the annual premium, not a recoupment of settlement
monies. While the policy is clear that the August 2003 settlement is a triggering factor
leading to PinnOak's obligation to pay its premium, the payback of the premium is not a
recoupment of settlement monies. Further, as is clear from the policy, this money was not
due until after settlement monies were received. Indeed, it was two years later, in May 2006,
when the settlement occurred. Thus, the term “payback” refers to PinnOak paying Lloyd's
the premium for the coverage that PinnOak has already received from Lloyd's, but for which
payment has been deferred.
This interpretation is reinforced by examining the two versions of Policy
B0711 issued in 2004. The first policy was entered into for a term of one year from June 30,
2004, to June 30, 2005, with a premium due of $5,000,000.00. This policy does not contain
the term “payback” or any references to the August 2003 loss. However, when PinnOak
discovered it would not have the cash flow to pay this premium up-front, the terms were
altered such that it was a five-year term from June 30, 2004, to June 30, 2009, with options
of nonrenewal; a guaranteed $375,000.00 per year in premiums; and a premium of
$6,250,000.00, payable in five equal installments of $1,250,000.00, after receipt of the
settlement money from the 2003 loss. This scheme acknowledged that PinnOak would repay
Lloyd's for the coverage that it received for almost free (See footnote 10) prior to the time that the 2003 case
settled.
Quite simply, the subject matter of the Settlement Agreement refers to only the
“Loss,” which is the 2003 methane explosion and the subsequent coverage litigation. Policy
B0711 is an after-entered policy of insurance affording insurance coverage from Lloyd's to
PinnOak. Contractual obligations under Policy B0711 were not included in, or extinguished
by, the Settlement Agreement. Thus, PinnOak's premium obligations under Policy B0711
are due.
As a final matter, PinnOak contends that the Settlement Agreement should be
enforced pursuant to this State's longstanding public policy of favoring and encouraging
settlement agreements. PinnOak argues that the language of the Settlement Agreement is
clear and unambiguous and should be enforced as written. Further averred by PinnOak is
that, in the absence of any fraud, mistakes, or material misrepresentations, the agreement
must be enforced. We recognize our longstanding principle that
“[t]he law favors and encourages the resolution of
controversies by contracts of compromise and settlement rather
than by litigation; and it is the policy of the law to uphold and
enforce such contracts if they are fairly made and are not in
contravention of some law or public policy.” Syl. Pt. 1, Sanders
v. Roselawn Mem'l Gardens, Inc., 152 W. Va. 91, 159 S.E.2d
784 (1968).
Syl. pt. 5, Riner v. Newbraugh, 211 W. Va. 137, 563 S.E.2d 802 (2002). Further, “'[w]here
parties have made a settlement . . . , such settlement is conclusive upon the parties thereto as
to the correctness thereof in the absence of accident, mistake or fraud in making the same.'
Syllabus point 1, in part, Calwell v. Caperton's Adm'rs, 27 W. Va. 397 (1886).” Syl. pt. 7, DeVane v. Kennedy, 205 W. Va. 519, 519 S.E.2d 622 (1999).
This opinion does nothing to alter or change our longstanding law regarding
settlement agreements. Courts should favor and encourage settlement agreements. This
opinion does nothing to void or lesson the validity of the Settlement Agreement entered into
in May 2006. However, this opinion confines the Settlement Agreement to its actual terms
and refuses to expand the Settlement Agreement beyond its plain terms to extinguish the
contractual obligations in Policy B0711. PinnOak breached its duty to pay the premium it
owed under Policy B0711. PinnOak entered into a contract for insurance coverage and has
breached its duty to pay the premiums as agreed to in the policy. Thus, PinnOak is required
to pay the premium. (See footnote 11)
For the foregoing reasons, we reverse the April 11, 2007, and the June 21,
2007, orders entered by the Circuit Court of Wyoming County. We remand this matter for
further proceedings consistent with this opinion.
The suit was also filed against all of the other companies providing insurance coverage. To the extent that the other insurance companies are not relevant to this appeal, they are not mentioned.
Syndicates of Lloyd's agreed to provide coverage. However, this opinion will refer to the syndicates as “Lloyd's.”
As admitted by Lloyd's in their brief, the motion is incorrectly styled as a Rule 56(e) motion. Consequently, the circuit court's order denying the same also refers to the incorrect rule.
In its argument, however, PinnOak opines that the circuit court's grant of summary judgment and subsequent denial of the motion to alter or amend should be upheld regardless of the standard of review applied by this Court.
The relevant provisions in the Settlement Agreement, in the order listed by the
circuit court's order, state as follows:
10. This agreement constitutes the entire agreement
between PinnOak, Insurers, and VeriClaim regarding the subject
matter hereof, and supercedes all other prior discussions,
agreements and understandings, both written and oral, with
respect thereto. This agreement shall not be amended, modified
or assigned except by express written agreement of PinnOak,
Insurers, and VeriClaim.
8. Insurers shall not, under any legal theory, seek
reimbursement of, or contribution toward, the advances and sum
to be paid to PinnOak described in Paragraph 1 of “Agreements”
above, from any other insurer or from any other present or
former party to the Coverage Action, except with respect to the
rights that Insurers may have with respect to reinsurers pursuant
to reinsurance agreements, contracts or relationships.
4. In consideration of the agreements set forth herein,
each of the Insurers and Vericlaim and their respective
investors, shareholders, general and limited partners, parents,
subsidiaries, successors and assigns (the “Insurer Releasors”)
hereby releases and discharges PinnOak as well as PinnOak's
officers, directors, stockholders, parents, subsidiaries, attorneys,
successors and assigns, from all actions, or causes of action
whether in contract or tort (each including but not limited to
statutory or common law claims, claims for attorneys fees,
unfair or improper practices or methods of competition,
consumer protection acts or bad fath), suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialities,
covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions,
claims, and demands whatsoever, in law, admiralty or equity,
which the Insurer Releasors ever had, now have or hereafter can,
shall or may have, for, upon or by reason of the Loss.
Necessarily, the release and discharge contained in this
paragraph does not apply to any loss other than the Loss.
7. Each of the Insurers, and VeriClaim, shall protect,
indemnify, and save PinnOak, its officers, directors,
subsidiaries, affiliates, successors, assigns, stockholders,
directors, officers, employees and agents, by policy number
only, harmless from and against any and all claims, demands,
liabilities and causes of actions of every kind and character
brought by any party purporting to or attempting to assert any
claim by, through, or on behalf of any of the Insurers or
VeriClaim, growing out of, or resulting directly or indirectly
from, the Loss; provided, however, that Insurers and VeriClaim
shall have no obligations with respect to any claim asserted by
another insurer or a reinsurer relating to the Loss.
This interpretation does not attempt to obscure the fact that PinnOak did pay $375,000.00 a year in premiums that was not contingent on receipt of the settlement monies. Thus, while the coverage was not free, it was much below the market value as evidenced by the original agreement terms with a premium of $5,000,000.00 for one year of coverage in Policy B0711.
While this opinion determines that PinnOak owes the premium under Policy B0711, this Court does not make a determination as to the actual amount owed and to whom. There is some evidence in the record that Lloyd's insured only a percentage of the risk. Thus, the premium owed to Lloyd's should be calculated accordingly on remand.