Duty to Defend and Reasonable Defense Fees

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7^th Circuit Court of Appeals

Case Name: Mary Haley, et al. v. Fireman’s Fund Insurance Co.,

Case No.: 16-3563; 16-3648

Officials: FLAUM, KANNE, and HAMILTON, Circuit Judges.

Focus: Duty to Defend and Reasonable Defense Fees

In 2014, Mary Haley and others filed a putative class action against Kolbe & Kolbe Millwork Company, claiming that windows purchased from Kolbe were defective and had allowed air and water to leak into (and damage) the plaintiffs’ homes. Kolbe tendered the defense of the defective‐product claims to several insurance companies, and two of them—United States Fire Insurance Company and Fireman’s Fund Insurance Company—sought and obtained permission to intervene in the case. United States Fire later filed a motion for summary judgment, arguing that a recent decision of the Wisconsin Supreme Court, Wisconsin Pharmacal Co., LLC v. Nebraska Cultures of California, Inc., 876 N.W.2d 72 (Wis. 2016), absolved the insurers of their duty to defend Kolbe in the underlying suit. The district court granted United States Fire’s motion (and sua sponte awarded judgment to Fireman’s Fund)—a decision that Kolbe now appeals. United States Fire appeals the court’s decision not to require Kolbe to reimburse that insurer for any post‐Pharmacal defense fees, and asks that we remand the case for a determination of whether all pre‐Pharmacal defense fees were reasonable. We reverse the judgment that the insurance companies had no duty to defend, but otherwise affirm the decisions of the district court.

Reversed and Remanded in part and Affirmed in part

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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.