Opinion ID: 4194164
Heading Depth: 2
Heading Rank: 2

Heading: United States Fire’s Cross‐Appeal

Text: While United States Fire’s (renewed) motion for summary judgment on the duty‐to‐defend issue was still pending in the district court, the court dismissed all of the plaintiffs’ remain‐ ing claims in the underlying suit and ordered the insurance company to show cause why, in light of that dismissal, the pending motion should not be denied as moot. United States Fire responded that the motion should still be resolved be‐ cause, in the event the plaintiffs filed an appeal, the insurers would have a continuing duty to defend Kolbe throughout 4 We note, however, that if the integrated‐system rule applied in this case as it did in Pharmacal, then the “your product” exclusion would in‐ deed extinguish coverage, as the insurance companies urge. See 876 N.W.2d at 90 n.14. 14 Nos. 16‐3563 & 16‐3648 the appellate process unless the district court decided other‐ wise. In addition, should the court determine that the duty to defend had been extinguished, United States Fire asked that the court order Kolbe to reimburse its insurer for all monies paid toward Kolbe’s defense since the duty had ended. The insurance company also suggested that it planned to chal‐ lenge the reasonableness of the defense fees already charged by Kolbe’s counsel. Although the district court agreed with United States Fire that the insurers no longer had a duty to defend, the court declined to order the reimbursement of any fees, as United States Fire had not asked for that kind of relief in its pleading, and it was too late in the litigation to allow an amendment. The court then entered judgment in the insurers’ favor on their duty‐to‐defend claims, and terminated the case. United States Fire appeals the denial of its request for re‐ imbursement, but as we have concluded that the insurer owed a continuing duty to defend, we do not reach that issue: It is moot. As to the reasonableness of Kolbe’s defense fees gener‐ ally, the insurance company never made a formal request for the recoupment of excessive charges. Having resolved all out‐ standing motions and causes of action, it was not inappropri‐ ate for the district court to terminate the case. If, on remand, the district court wishes to entertain a motion for recoupment, however, the court certainly has the discretion to do so.