Wisconsin Court of Appeals
Insurance — duty to defend
An insurer does not have a continuing duty to defend an insured after the only arguably covered claim in a lawsuit against the insured was settled and dismissed, leaving only non-covered claims.
“The duty to defend extends to the ‘entire suit’ against an insured, even if only one claim in the suit is covered. See, e.g., Fireman’s Fund, 261 Wis. 2d 4, ¶21; Doyle v. Engelke, 219 Wis. 2d 277, 285 n.4, 580 N.W.2d 245 (1998). Consistent with this rule, once all covered (and arguably covered) claims have been settled and dismissed, there is no longer even one covered claim in the suit. We note that Bodart points to no Wisconsin case or analogous case from any other jurisdiction applying the ‘entire suit’ rule after all covered claims have been settled and dismissed.”
“Further, the general rule is consistent with the oft-stated principle that we do not construe insurance policies to cover risks that the insurer did not contemplate and for which the insurer has not received a premium. See, e.g., Estate of Sustache, 311 Wis. 2d 548, ¶19; American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65. Adopting Bodart’s position here would establish a rule that requires insurers to continue to defend insureds even when it has become clear that there could not possibly be coverage for any remaining allegations. As the Minnesota Supreme Court explains in Meadowbrook: ‘To require an insurer who undertakes a defense on the basis of arguably covered claims to remain in the litigation even after those claims have been resolved, is to force the insurer to defend claims not arguably covered by the policy.’ Meadowbrook, 559 N.W.2d at 416.”
Recommended for publication in the official reports.
2010AP2442 Society Insurance v. Bodart
Dist. II, Waukesha County, Davis, Snyder, JJ., Blanchard, J.
Attorneys: For Appellant: Guerard, Jeffrey J., Milwaukee; For Respondent: Mohr, James W., Jr., Hartford