Court Opinion

ID: 6755043
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:26:17.118912+00
Date Added: 2024-06-11T16:02:24.310298
License: Public Domain

Paul W. Brown, J.,
dissenting in part. I concur with paragraphs one and two of the syllabus. I dissent from paragraphs three and four of the syllabus and from that part of the judgment which permits the award of attorney fees. The facts do not indicate that the insurer sought to excuse itself from the duty to defend. The facts indicate that the insurer sought consent to defend under reservation of right. Generally, the insurer waives policy defenses if it defends without notifying the insured of its reservation of rights. 7A Appleman Insurance Law and Practice 515. Nor may the insurer reserve its rights and be entitled to defend under such circumstances without the acquiescence or consent of the insured. 38 A. L. R. 2d 1142, at 1176, 1177. Schmidt v. Natl. Auto. & Cas. Ins. Co. (1953), 207 F. 2d 301, 38 A. L. R. 2d 1142.
The majority opinion herein states:
“* * * Finally, on November 23, after demanding that Motorists defend, and informing it that it would be held liable for attorney fees, expenses and possible judgment, the Trainors’ private counsel undertook the defense of the negligence action.”
That statement fails to include the fact that the demand was that Motorists defend without reservation.
I conclude that neither the request that the insured indicate its consent to the defense by the plaintiff nor the action for declaratory judgment under these circumstanc*49es constitutes a breach of the contractual provisions of the policy requiring the insurer to defend the action.
That is to say, the insurer in such cases has an option to defend, without reservation, thus waiving any claimed coverage defense, or to notify the insured of its willingness to defend under a reservation of rights. In the latter event, the insured has an option to acquiesce, to indicate express consent to defend under a reservation of rights, or to deny consent. Here, the insured sought to make consent dependent upon withdrawal of the reservation of rights, thus conditionally refusing consent.
That position denies the insurer the right recognized by this court in paragraph one of the syllabus herein.. It follows, on the admitted facts, that the majority wrongly bottoms its affirmance on a determination that the insurer has “wrongfully refused to defend.” In my opinion, it is clear from the record that not only did the insurer not refuse to defend, but that the insured simply refused to permit that defense under a reservation of rights.
Under all the circumstances, I see no legal entitlement to an award of attorney fees at this point. This declaratory judgment action does not differ from other such actions which seek to define rights and duties under other contracts of insurance. In those cases, fees are not allowed. The majority opinion cites as authority for the allowance of attorney fees an annotation in 49 A. L. R. 2d 694. That annotation, at page 698, expressly excludes from its scope cases involving the question whether the action of the insurer constitutes a refusal to defend and points out that a further limitation of the scope of the annotation is that its cases concern only “absolute and unequivocal refusal.”
I concur in that part of the judgment which reverses the finding of the Court of Appeals that a patent conflict of interest exists disqualifying the insured from its right to defend the negligence action.