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Home / Case Digests / 01-1275 Lockwood International v. Volm Bag Company, Inc.

01-1275 Lockwood International v. Volm Bag Company, Inc.

“No case that has been cited to us or that our own research has uncovered authorizes so convoluted a mode of proceeding. To recapitulate: North River had every right to settle the claims that gave rise to its duty to defend in the first place – the covered claims and the potentially covered claims in Lockwood’s suit – in order to avoid having to defend the claims in the same suit that were not actually or potentially covered. But that is not what North River did. The duty to defend turns on the facts alleged rather than on the theories pleaded; and even after its deal with North River, Lockwood was alleging facts that could well, depending on the course of trial, describe a covered claim. Thus North River did not leave behind only clearly uncovered claims when it tried to shuck off its contractual responsibility to pay for its insured’s defense.”

Reversed and remanded.

Appeal from the United States District Court for the Eastern District of Wisconsin, Randa, J., Posner, J.

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