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Insurance Law: Duty to Defend vs Duty to Indemnify

Steve Lombardi
Iowa personal injury, workers' compensation, motorcycle, quadriplegic, paraplegic, brain injury, death

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5/20/2013
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In METROPOLITAN PROP. & CAS. INS. CO. v. COWIE, the Court discusses an insurance company’s duty to defend and to indemnify when it involves the motor-vehicle exclusion under a homeowner’s policy. In this instance the negligent act involved two claims, one being non-vehicular in nature. And the non-vehicular negligence claim is the one that creates a duty to defend and to possibly indemnify. Those two duties are distinct from each other, with the duty to defend being very broad and the terms of the policy being liberally interpreted. Unless the vehicle-related negligence is the sole proximate cause of the injuries the insurance company will have to indemnify.

At the end of the day it still matters how you plead the case and prepare your client for his/her deposition. The tractor turned over, the one farmer helping was badly hurt and the guy driving may or may not be negligent. The theory you plead is important which is why we do so much work on a referral basis with lawyers from around the state. A little help can go a long way because at the end of the case some is always better than none. 

No. 12-1945. [3-273] METROPOLITAN PROP. & CAS. INS. CO. v. COWIE

Appeal from the Iowa District Court for Warren County, Paul R. Huscher, Judge. AFFIRMED ON APPEAL; AFFIRMED WITH DIRECTIONS ON CROSS-APPEAL. Heard by Doyle, P.J., and Danilson and Mullins, JJ. Opinion by Danilson, J. (11 pages)

This is an appeal from a ruling on the parties' motions for summary judgment concerning the applicability of an exclusion in a homeowner's insurance policy. John McCarty attempted to free a tractor, which was stuck in the mud in his backyard, by attaching a chain and towing it with his truck. The tractor overturned, injuring his neighbor, Douglas Cowie. Cowie filed a personal injury action against the McCartys, who assigned their right to recover from their homeowner's insurance policy to the Cowies. Metropolitan Property and Casualty Insurance Company (Metropolitan) disclaims a duty to defend and indemnify its insured, John and Leesa McCarty, pursuant to a motor-vehicle exclusion in the policy. OPINION HOLDS: Because both claims of non-vehicular negligence and vehicular negligence exist, the district court correctly denied Metropolitan's motion for summary judgment. However, to the extent that the district court ruling could be interpreted to limit Metropolitan's liability to indemnify its insured for only those damages proximately caused by non-vehicle negligence, we require Metropolitan to both defend and indemnify for all damages caused by the insured's negligence unless the vehicle-related negligence is the sole proximate cause of Cowies' injuries. 



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