North American is seeking to reverse a September 2020 ruling by an Illinois federal judge which partially granted Menard’s motion to dismiss, which found that a policyholder does not owe an excess carrier a duty to settle.
Although the court initially allowed North American to proceed with a breach of contract claim based on the implied covenant of good faith and fair dealing, the court later reversed course and found that since it did not find that there was a common law duty to settle, likewise there was no contractual duty to settle on the basis of their covenant.
In re North American Elite Insurance v. Menard Inc., case number 21-1813, in the U.S. Court of Appeals for the Seventh Circuit.
