EQUALCONSIDERATIONARTICLE 009 Morris Agreements are sometimes threatened prior to, or during, a mediation in which the plaintiff has demanded an amount within policy limits, but there remains a large gap between the insurer’s and the plaintiff’s valuation of the claim. A claim may realistically have a value lower than the demand, but a plaintiff may use the threat in an attempt to pressure the insurer to pay more to avoid a stipulated judgment in excess of policy limits. This threat is usually accompanied by a specific demand by the insured to settle the claim at any amount within policy limits. This is understandable, as the insured usually does not take issue with the amount paid; the insured only wants settlement of the claim without risk of personal exposure. Although these situations pose difficult choices to insurers, they are also risky for plaintiffs because they become “all or nothing” propositions based on the ultimate issue of whether the insurer gave “equal consideration” to the demand. If it has, the insured will have breached the cooperation clause by entering the agreement, resulting in no coverage. This translates to a situation in which the plaintiff possesses a meaningless judgment and cannot execute against the policy limits. When an insurance carrier is given a “take it or leave it” demand accompanied with a threat of a Morris Agreement, it needs to analyze its consideration of the demand in light of the Pruett factors. If it has done so, and if the demand continues to be unreasonable, the insurer need not hastily agree to “overpay” in light of a Morris threat. If a plaintiff’s demand remains unreasonable, and equal consideration has been provided, it is the plaintiff who risks receiving nothing in pursuing a Morris Agreement that is ultimately deemed to be in violation of the policy’s cooperation clause. JSH RESOURCE ALERT! Reference Guide to AZ Law Our JSH Reference Guide is published each year and distributed to clients via print and/or electronic media. JSH updates The Guide each year to reflect recent changes in case law and statutes. It includes a detailed table of contents and case law, and covers most of the major issues that arise in personal injury cases, as well as a short explanation of Arizona law on each point. To receive a copy of our current Reference Guide, send an email to: firstname.lastname@example.org. ABOUT THE AUTHOR JEFF COLLINS Jeff Collins works with insurance carriers in matters involving insurance-related disputes including bad faith, breach of contract and declaratory judgments. He also handles matters involving coverage issues including policy interpretation for many insurance lines, including commercial, professional and personal. Contact Jeff at 602.263.7346 or email@example.com.