Court Opinion

ID: 6759791
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:19.988575+00
Date Added: 2024-06-11T16:02:33.891620
License: Public Domain

Douglas, J.,
concurring in part and dissenting in part. I agree that the appellant insurer has no duty to indemnify appellee Wedge Products in the event of an adverse judgment. However, I emphatically disagree with the majority’s holding that appellant has no duty to defend under these facts. In my view, this holding directly conflicts with our very recent decision in Preferred Risk Ins. Co. v. Gill (1987), 30 Ohio St. 3d 108, 30 OBR 424, 507 N.E. 2d 1118. We held therein that:
“Where the insurer does not agree to defend groundless, false or fraudulent claims, an insurer’s duty to defend does not depend solely on the allegations of the underlying tort complaint. Absent such an agreement, the insurer has no duty to defend or indemnify its insured where the insurer demonstrates in good faith in the declaratory judgment action that *69the act of the insured was intentional and therefore outside the policy-coverage.” (Emphasis added.) Id. at paragraph two of the syllabus.
It is clear from the foregoing that the insurer will be relieved of its duty to defend upon a showing that the conduct complained of was outside coverage only where the insurer has not agreed to defend groundless, false or fraudulent claims. However, if the insurer has agreed to defend such groundless claims, it follows that the insurer cannot avoid its obligation to defend by showing that the conduct was outside coverage. In such a case, the insurer has represented to its insured that it will undertake the defense of any claim regardless of the true facts.
An examination of the relevant insurance policy in the instant cause brings forth the following provision:
“[T]he company [appellant] shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property .damage, even if any of the allegations of the suit are groundless, false or fraudulent * * *. ” (Emphasis added.)
Appellant agreed by this provision to assume the defense of any unfounded claim asserted against its insured. Appellee’s insurance premiums no doubt reflected the cost of obtaining such a promise from appellant. To release appellant from its duty to defend in this case is not only fundamentally unfair, it is contrary to the language of the policy and to our holding in Preferred Risk, supra.
Accordingly, I concur in the reversal of the judgment of the court of appeals to the extent that it imposed on appellant a duty to indemnify appellee in the event of an adverse judgment. However, I would affirm the appellate court’s holding that appellant has an obligation to defend appellee on both claims.