Cargill Inc. v. Ace Am. Ins.
(Court of Appeals of Minnesota, May 26, 2009)
The state of Oklahoma sued Cargill for losses arising out of Cargill’s waste disposal practices. Cargill sought defense and indemnity from 50 insurers covering the time frame the disposal occurred. An insurer providing the defense sought a neutral loan receipt agreement with the policyholder. The policyholder refused. The court held that if an insured in bad faith refuses to enter into a neutral loan receipt agreement, a court can protect an insurer by imposing a constructive loan receipt obligation.
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By Joanna M. Roberto and Brian R. Biggie