The duty to defend under a policy of liability insurance is determined by two tests in this country. One is to compare the four corners of the compaint filed against the insured with the four corners of the insurance policy. The other test is to also consider the facts known to the liability insurance company outside of or "extrinsic to" the four corners of the underlying complaint and compare those, too, with the four corners of the insurance policy. Some courts apply both tests.
Both tests were very recently applied under Minnesota law by the Federal Eighth Circuit Court of Appeals in Download travelers_property_casualty_co. v. General Casualty Insurance Cos. (8th Cir. Case No. 05-3863 Opinion Filed October 13, 2006)..pdf. The person claiming Insurance Coverage there, namely a duty to defend him, is a Mr. Paine, who is a golf professional and a member at all times of the Professional Golfers' Association of America ("PGA"). A student allegedly injured in a phys-ed class sued the golf professional for negligence. Regent Insurance, which has changed its name to General Casualty, issued a liability policy to the PGA which insures Mr. Paine. Before the final round in the appellate court, the trial judge took pains to consider many links of Minnesota Insurance Law. The District Court also fairly considered pertinent facts along the way, i.e., the facts and lay of the land known and presented to the liability insurance company.
In a long opinion, the Eighth Circuit reviewed the tour of Minnesota Insurance Law taken by the District Judge and pronounced the District Judge's decision as a master. That Federal Appellate Court affirmed the Federal Trial Court's entry of summary judgment for the liability insurance company, "finding it had no duty to defend". One Circuit Judge dissented, thereby perhaps either lending credibility to the commonly held but unsupported belief that every golf outing has a kibitzer, or providing support to the less widely held but totally supportable belief that Insurance Coverage Questions are not always as straight of a shot as they may seem to be.
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.
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