Opinion ID: 1930145
Heading Depth: 2
Heading Rank: 1

Heading: Continental's Duty to Defend

Text: The District Court erred in granting a summary judgment in favor of Continental on the issue of its duty to defend Daniels against the underlying tort claim. We have recently reiterated that the obligation of a liability insurance company to defend an action brought against an insured by a third party is determined by comparing the provisions of the insurance contract with the allegations in the underlying complaint. If there is any legal or factual basis that could be developed at trial, which would obligate the insurer to pay under the policy, the insured is entitled to a defense. The correct test is whether a potential for liability within the coverage appears from whatever allegations are made. Lavoie v. Dorchester Mut. Fire Ins. Co., 560 A.2d 570, 571 (Me.1989) (emphasis in original) (citations omitted). In short, an insurer's duty to defend should be decided summarily and in favor of the insured if there exists any legal or factual basis, which could be developed at trial, that would obligate the insurer to pay under the policy. United States Fidelity & Guaranty Co. v. Rosso, 521 A.2d 301, 303 (Me. 1987). In applying the comparison test to the present facts, we examine the tort plaintiff's complaint to determine whether there exists any possibility that Continental would be held to indemnify Daniels. The complaint alleges that on December 23, 1988, Daniels' negligent operation of his motor vehicle caused the tort plaintiff to suffer property damages. Under that pleading, it might well be developed at trial that the collision occurred at a time when Daniels was operating his vehicle in connection with [QuickCare's] business. In that circumstance Daniels would be covered under the policy's nonowned auto provision. Accordingly, we vacate the District Court's summary judgment in favor of Continental on the issue of its duty to defend Daniels and on that issue direct entry instead of a summary judgment in favor of third-party plaintiff Daniels.