the Ahrens allegations liberally, the complaint alleges "medical incidents" that caused "bodily injury" within the meaning of the PHICO policy purchased by WOHA. Second Amended Complaint, Ahrens v. Pacific Gas & Electric Co., para. XI Eighth Cause of Action, para. V Ninth Cause of Action. Stip. Facts para. 20, 24, 25, 26. Thus, we find that PHICO has a duty to defend WOHA in Ahrens.
C. " Other Insurance" Clauses
Both the Twin City and PHICO insurance policies have "other insurance" clauses, purporting to make them excess carriers. Each company claims that they are the secondary carrier for WOHA, and that the other carrier should be declared the primary insurer responsible for WOHA's defense and indemnity.
Twin City's "Other Insurance" provision states the coverage to be "excess over any other valid and collectible insurance available to the insured, except insurance specifically arranged by the named insured to apply in excess of this insurance." Stip. Facts para. 16. PHICO's policy has a similar "Other Insurance" section providing that its coverage "shall be excess over any other valid and collectible insurance." In addition, PHICO will pay a pro rata portion of the liability "if this insurance and other insurance are both excess." Stip. Facts para. 22.
The excess clauses of both companies are mutually exclusive and irreconcilable, so ultimate liability must be apportioned between them under District of Columbia law. See Reliance Ins. Co. v. St. Paul Surplus Lines Ins. Co., 753 F.2d 1288, 1290 (4th Cir. 1985) (applying D.C. law); Jones v. Medox, 430 A.2d 488, 494 (D.C. 1981) (en banc). To hold otherwise would be to allow both insurers to avoid responsibility at WOHA's expense, since there would be no primary carrier. Instead, both Twin City and PHICO are obligated to defend and eventually to indemnify WOHA for the Ahrens claims covered by their respective insurance policies. They are both responsible as primary insurers to assume a pro rata share of the costs.
D. Attorneys' Fees and Costs
WOHA seeks the attorneys' fees and costs expended by it in this action, relying on Maryland case law for support. However, the law in the District of Columbia is that each party bears its own expenses, even in cases where an insured has to sue to establish its right to coverage. This so-called "American Rule" is generally applicable with certain exceptions, i.e., when the insurer has acted in bad faith, leaving its insured in an especially vulnerable position. Eureka Investment Corp., N.V. v. Chicago Title Ins. Co., 240 U.S. App. D.C. 88, 743 F.2d 932, 945-46 (D.C. Cir. 1984). There has been no such showing of bad faith here. Indeed, Twin City has been assuming the costs of defending WOHA after the first $ 10,000 deductible was taken, while reserving its rights to litigate the extent of the deductible. Stip. Facts para. 34. We see no reason to depart from the usual rule and therefore deny WOHA's request for attorney's fees and costs.
In conclusion, we interpret as a matter of law the Twin City policy to provide that the deductible of $ 10,000 shall apply to the claims of the Ahrens plaintiffs. We hold that PHICO has a duty to defend WOHA in the Ahrens litigation, sharing an equal responsibility with Twin City as co-primary insurers. Finally, we find that WOHA is not entitled to attorneys' fees, since there are no exceptional circumstances present that would justify such an award.
An order consistent with the foregoing has been entered this day.
Upon consideration of the parties' cross-motions for summary judgment, the supporting memoranda of points and authorities, and the entire record herein, and for reasons set out in the accompanying memorandum opinion, it is by the court this 29th day of January, 1987,
ORDERED that Washington Occupational Health Associates' motion for summary judgment is granted in part and denied in part, and it is
ORDERED that Twin City Fire Insurance Co.'s motion for summary judgment is granted in part and denied in part, and it is
ORDERED that Pennsylvania Casualty Company's motion for summary judgment is granted in part and denied in part; and it is
ORDERED that under the terms of the Twin City Fire Insurance Co. policy issued to Washington Occupational Health Services, plaintiff is liable for the first $ 10,000 of damages arising from each of the eighteen claims asserted against it in the case of Ahrens, et al v. Pacific Gas & Electric Co., No. 816843, Superior Court of California, City and County of San Francisco; and it is
ORDERED that under the terms of the Pennsylvania Casualty Company policy issued to Washington Occupational Health Services, defendant Pennsylvania Casualty Company shall provide a defense to plaintiff in the Ahrens, et al v. Pacific Gas & Electric Co. case, and it is
ORDERED that defendants are both primary insurers for plaintiff Washington Occupational Health Services in the Ahrens, et al v. Pacific Gas & Electric Co. case, and it is
FURTHER ORDERED that plaintiff's application for attorney's fees and other expenses in this action is denied.