Court Opinion

ID: 5733629
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:29:38.62331+00
Date Added: 2024-06-11T08:40:55.485312
License: Public Domain

Nevertheless, we conclude that plaintiff waived its right to disclaim coverage with respect to the underlying action inasmuch as it implicitly conceded coverage by its conduct in the underlying action, i.e., by participating in the binding arbitration, defending T.C. Concrete in the arbitration, and indemnifying T.C. Concrete in accordance with the determination in the arbitration (see Government Empls. Ins. Co. v Cusi, 163 AD2d 918 [1990]; see generally Meutsch v Travelers Ins. Co., 206 AD2d 953, 955 [1993]). It is well settled that “an insurer’s responsibility to defend reaches the defense of any actions arising out of the occurrence,” and defense expenses are recoverable by the insured, including those incurred in defending against an insurer seeking to avoid coverage for a particular claim (Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21 [1979]; see U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 *1323NY3d 592, 597-598 [2004]; United States Fid. & Guar. Co. v New York, Susquehanna & W. Ry. Corp., 277 AD2d 1026; U.S. Liab. Ins. Co. v Staten Is. Hosp., 162 AD2d 445, 447 [1990]). An insurer’s obligation to pay attorneys’ fees and costs in connection with a declaratory judgment action is incidental to the insurer’s contractual duty to defend (see U.S. Underwriters Ins. Co., 3 NY3d 592, 597-598 [2004]; see also Mighty Midgets, 47 NY2d at 21; United States Fid. & Guar. Co., Ill AD2d 1026).
We thus conclude that, based upon plaintiffs implied concession of coverage, defendants are entitled to recover on their counterclaim seeking reimbursement for their attorneys’ fees and costs incurred in their defense of this action. We therefore modify the judgment accordingly, and we remit the matter to Supreme Court to determine the amount of reasonable attorneys’ fees and costs incurred. Present—Scudder, P.J., Martoche, Lunn, Peradotto and Green, JJ.