Opinion ID: 2633561
Heading Depth: 3
Heading Rank: 2

Heading: The Current Lawsuit

Text: On March 15, 2002 the Brannons filed a superior court complaint against Continental that was nearly identical to their unserved 1999 complaint. Continental moved for summary judgment, asserting the statute of limitations, the doctrine of unclean hands, and policy exclusions; it also moved for partial summary judgment on damages. The Brannons moved for partial summary judgment on their claim that Continental had breached its duty to defend Pfleiger. After oral argument on the summary judgment motions, the superior court held that [t]he statute of limitations for the breach of the duty to defend, when the insurance contract excludes coverage, should begin to run on the date the insurance company refuses to defend. It concluded that because Continental had denied Pfleiger a defense on August 13, 1997, the three-year statute of limitations began to run on that day. [3] Because the Brannons did not file their complaint until March 15, 2002, more than three years later, the superior court granted Continental's motion for summary judgment on statute of limitations grounds. The superior court also held that Continental did not have a duty to indemnify Pfleiger under the terms of the insurance contract. The superior court stated that it is uncontroverted that Pfleiger had a direct 10% interest in the profits and losses of the Johnny Rockets investment. . . . Accordingly, Exclusion N of the policy applies and there was no coverage for the alleged loss under the terms of the policy. But the court left open the possibility that Continental could be estopped to deny coverage if it was found to have breached the duty to defend. The superior court expressly stated that it was not ruling on the other pending motions, including the parties' motions for summary judgment on the question whether there was a breach of the duty to defend, Continental's motion for summary judgment on damages, and Continental's motion for summary judgment on the issue of unclean hands. The Brannons appeal the ruling that their complaint against Continental was untimely.