Duty to Defend- Indemnification

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WI Court of Appeals – District I

Case Name: Archie A. Talley v. Mustafa Mustafa

Case No.: 2015AP2356

Officials: Reilly, P.J., Gundrum and Hagedorn, JJ.

Focus: Duty to Defend- Indemnification

Archie Talley appeals from an order granting Auto Owners Insurance Company’s (Auto Owners’) motion for summary and declaratory judgment and dismissing Auto Owners from this action. The circuit court determined Auto Owners does not owe Mustafa Mustafa or the other named defendants a duty of defense or indemnification in relation to an alleged altercation at Mustafa’s business, Burleigh Food Market (the store), on July 24, 2009. According to the court, the complaint and factual record indicate that if defendant “John Doe”—an alleged “agent[], employee[], or representative[]” of Mustafa—struck Talley, it was done intentionally, and because the injury to Talley was caused by an intentional act, there is no coverage under Mustafa’s Auto Owners insurance policy. We conclude the circuit court erred in granting summary and declaratory judgment to Auto Owners and dismissing it from this action. Talley’s complaint alleged Mustafa negligently trained and supervised “John Doe,” who the parties subsequently identified as Keith Scott. Based upon the language of the policy at issue, a reasonable insured in the position of Mustafa would expect to be covered for such a claim, whether founded upon a negligent or intentional underlying act by Scott. On a related matter addressed by the parties, we conclude there is a genuine issue of material fact as to whether Scott was an employee of Mustafa or otherwise had a special relationship with him such that Mustafa had a duty to train and supervise Scott with due care. We reverse and remand for further proceedings.

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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.