Meadowbrook's insurer, Tower, defended the entire case under a reservation of rights. Meadowbrook obtained summary judgment on the defamation claim. The insurer then withdrew the defense. The supreme court held the withdrawal of the defense was premature, because a partial summary judgment that does not contain the final judgment language of Minn. R. Civ. P. 54.02 is not appealable and, therefore, the defamation claim had not been dismissed with finality.
Finality occurs only after appellate rights are exhausted.
Had the insurer done nothing more at that point, it would have been required to defend the entire suit through final judgment and the appellate process. Instead, to get the appellate process started early, the insurer asked the trial court to revise its order to include the final judgment language of Rule 54.02. The trial court, in its discretion, refused. The insurer then approached the plaintiff and settled the defamation claim. The supreme court held that the settlement resolved the only covered claim with finality.