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Insurance Coverage – Duty to Defend

By: Derek Hawkins//March 22, 2017//

Insurance Coverage – Duty to Defend

By: Derek Hawkins//March 22, 2017//

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WI Court of Appeals – District IV

Case Name: Fun Services of Kansas City v. National Casualty Company

Case No.: 2015AP2367

Officials: Kloppenburg, P.J., Lundsten and Sherman, JJ.

Focus: Insurance Coverage – Duty to Defend

Fun Services of Kansas City sued National Casualty Company in Dane County Circuit Court, seeking payment of the unpaid amount of a Kansas judgment that incorporated a settlement reached between Fun Services and National Casualty’s insured, Hertz Equipment Rental Corporation, without National Casualty’s participation. The circuit court dismissed Fun Services’s complaint after reviewing cross motions for summary judgment. The court determined that the property damages exclusion in National Casualty’s policies precluded coverage. We affirm, but on a ground different from that of the circuit court, based on an interpretation of New Jersey law argued by National Casualty and unrefuted by Fun Services. According to that interpretation, one prerequisite for an insurer’s liability for the payment of a settlement reached by its insured without the insurer’s participation is the insurer’s wrongful refusal to defend. National Casualty did not wrongfully refuse to defend in the Kansas action because there is no evidence that Hertz requested a defense in the Kansas action under the policies under which Fun Services seeks payment in this action. Accordingly, having failed to establish a necessary prerequisite to payment, Fun Services fails to establish that it is entitled to payment of the Kansas settlement.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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