Duty to defend not triggered

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Appellants-defendants Allianz Insurance Company (Allianz) and others (the Excess Insurers) (collectively, the Insurers) appeal the trial court’s orders (1) granting partial summary judgment in favor of appellees-plaintiffs Guidant Corporation (Guidant) and others (collectively, the Policyholders) on the Policyholders’ claim that the Insurers breached their duty to defend; and (2) striking an affidavit and attached exhibits supporting the Insurers’ opposition to summary judgment. Additionally, the Policyholders cross-appeal the trial court’s order denying their motion for judgment on the pleadings on Allianz’s affirmative defense of fraud. They argue that inasmuch as Allianz has elected not to rescind the contract and has retained all premiums paid pursuant to the insurance policy at issue, it has waived an argument that the policy is void due to alleged fraud.
Conclusion (slip op. at 31):  In sum, we find that the Insurers are precluded from raising a fraud defense, inasmuch as they have retained all premiums and seek to affirm a portion of the Policy. Thus, the trial court should have granted the Policyholders’ motion for judgment on the pleadings. Furthermore, the trial court properly concluded that the mere act of filing a declaratory action does not suspend an insurer’s duty to defend. Finally, because the Dear Doctor letters do not constitute advisory memoranda within the meaning of the Batch Clause, the SIR has not been exhausted for Year One. Thus, the trial court erroneously granted partial summary judgment in the Policyholders’ favor on the duty to defend. The judgment of the trial court is reversed and remanded for further proceedings consistent with this opinion.

About Bose McKinney & Evans LLP

Bose McKinney & Evans LLP is a business law firm, headquartered in Indianapolis, Indiana, serving both publicly held and privately held businesses, governmental entities and high-growth industries. Our clients include Fortune 100 companies, international manufacturers, national and regional financial institutions, agribusinesses, sports teams, university-incubated start-ups, media, utilities, cities and schools, to name a few. We strive to build strong relationships with our clients as key business advisors, to exceed expectations in the quality of our work, to be knowledgeable about our clients’ businesses and sectors, to be responsive to service needs and to continually seek to improve the delivery of client services. Our ultimate focus is on our clients.
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