Court Opinion

ID: 8917748
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:47:17.420507+00
Date Added: 2024-06-11T17:09:09.045789
License: Public Domain

FARRIS, Circuit Judge,
dissenting:
I respectfully dissent. Amfac Distribution Corporation has interposed a defense *1313which, if successful, will cause Miller to suffer a legal determination that he is not entitled to collect certain debts. This differs from a “legal obligation to pay damages.” In the absence of supervening statutes, the insurer’s obligation to defend Miller is defined by the plain language of the contract. Navajo Freight Lines v. Liberty Mutual Insurance Co., 12 Ariz.App. 424, 471 P.2d 309, 316 (1970). If Amfac’s defense were a true counterclaim, it would, if successful, impose “a legal obligation to pay damages” and would therefore obligate the carrier to defend, since Amfac’s defense would then be a “suit against the insured for damages.”
The majority focuses on the effect of the defense, if successful. I understand but disagree with their approach. We are not deciding whether there is a duty to indemnify but whether there is a duty to defend. Miller can be indemnified if the trier of fact treats the defense as a counterclaim, but where, as here, it clearly appears from the pleadings that there is no obligation to indemnify, there is no obligation to defend. This is true even if subsequent events at trial reveal the obligation to indemnify. Paulin v. Fireman’s Fund Insurance Co., 1 Ariz.App. 408, 403 P.2d 555, 558 (1965); 7C J. Appleman, Insurance Law and Practice § 4683 (1979); Annot. 50 A.L.R.2d 461, 475 (1956).
I would not “interpret” the plain language of the policy to create an obligation to defend this cause of action. Although the language defining the limits of the insurer’s liability could have specified those limits with greater certainty, the failure to do so is not fatal where, as here, the intent is sufficiently clear to define the coverage provided.
I would affirm.