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Posts in Duty to Defend.
Posted in Duty to Defend

On July 13, 2023, the Eleventh Circuit issued a decision in Continental Casualty Co. v. Winder Laboratories, LLC, Case No. 21-11758, resolving an issue of first impression under Georgia law—whether an insurer can recoup defense costs it paid under a duty to defend policy upon a finding that the insurer has no duty to indemnify the insured.  The Court ruled that such recoupment is not permitted unless the policy expressly provides for it, explaining:   

As an initial matter, we disagree with the insurers’ argument that there is a clear “majority” rule favoring recoupment across ...

Posted in Duty to Defend

On March 31, 2023, Justice Cohen of the New York County Supreme Court, Commercial Division issued a decision in Liberty Ins. Underwriters Inc. v. Plaza Condominium, 2023 NY Slip Op 31035(U), granting an insurer’s motion to recoup defense expenses from the insured, after the Court found that there was no duty to indemnify.  The Court explained: 

Liberty established in its original summary judgment papers that it defended the Underlying Action subject to a reservation of rights, which included (implicitly at first, then explicitly) a right to recoup expenses if it were later ...

On January 9, 2023, Justice Lebovits of the New York County Supreme Court issued a decision in Peleus Ins. Co. v RCD Restorations Inc., 2023 NY Slip Op 50034(U), holding that an insurer could not recoup defense costs from its insured, without an express reservation of the right of recoupment.  The Court explained:

Although Peleus provided RCD with coverage in the underlying action/third-party action under a reservation of rights (see NYSCEF No. 17 [reservation of rights letter]), the letter notifying RCD of Peleus’s coverage position did not reserve the right "to recoup expenses ...

On December 30, 2020, the Second Department issued a decision in American W. Home Ins. Co. v. Gjonaj Realty & Mgt. Co., 2020 NY Slip Op 08027, ruling that an insurer was not entitled to recoup defense costs it paid, despite the court’s determination that the insurer had no duty to indemnify.

Under New York law, a liability insurer’s duty to defend is “exceedingly broad” and is triggered whenever there is a “reasonable possibility” of coverage.  Thus, "an insurer may be contractually bound to defend even though it may not ultimately be bound to pay, either because its insured is ...

On November 24, 2020, the First Department issued a decision in Wesco Ins. Co. v. Hellas Glass Works Corp., 2020 NY Slip Op 06975, holding that consideration of facts outside the complaint established an insurer’s duty to defend a personal injury action.

Affirming the motion court’s decision, which was previously discussed on this blog, the First Department explained:

Although the duty to defend is primarily determined by the complaint, wooden application of the “four corners of the complaint” rule would render the duty to defend narrower than the duty to indemnify.  Based ...

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