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