Richard G. Loy, Plaintiff-Respondent-Petitioner v. Donna Bunderson, State Farm Mutual Automobile Insurance Company…

Summary

The court held that the proposed settlement and special release presented a justiciable controversy suitable for declaratory relief, even though the release had not yet been executed. It affirmed the circuit court's determination that the plaintiff could settle the primary insurer's policy-limit exposure while preserving claims against Travelers, which had duties to defend and pay covered liability above the primary limits. The court also held that Travelers could not assert a bad-faith claim against the primary insurer because the insurers had no contract with each other and the insureds suffered no uncompensated loss. Steinmetz, J., dissenting, would have found the proceeding advisory and would have applied the existing-facts rule to invalidate the declaratory judgment.