Court Opinion

ID: 9714900
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:48:40.486255+00
Date Added: 2024-06-11T18:23:29.572532
License: Public Domain

SULLIVAN, Judge,
dissenting.
MEMORANDUM DECISION
The policy issued by Cincinnati Insurance Company (Cincinnati) to Frame Designs was a multiperil policy divided into two distinct coverage sections. Section I, relating to Property Coverage, specifically excludes loss or damage caused by mysterious disappearance. Section II, relating to Liability Coverage, specifically excludes property damage where the property is on the insured’s premises “for the purpose of having operations performed on such property by or on behalf of the insured.” The majority holds that the trial court failed to give proper consideration to these exclusions and accordingly reverses and remands the case to the trial court on that issue.
While I concur in that result, I would nevertheless affirm that portion of the trial court judgment dealing with the issue of Cincinnati’s duty to defend Frame Designs. In one renowned insurance treatise, it is said that the duty to defend is separate and distinct from the duty to pay:
“[T]he duty [to defend] has nothing to do with the merits of the claim and is not dependent upon liability because the insurer agrees to defend ‘even if any of the allegations of the suit are groundless, false or fraudulent’. Therefore an insurer is obligated to provide a defense whenever the allegations state facts, which if true, are within the ambits of the protection promised to the policyholder.” 7C Appleman, Insurance Law & Practice § 4682, pp. 22-23.
The duty to defend is determined at the time the suit is brought, not at the conclusion of the litigation. Id. at § 4684, p. 85. Thus it has been held that the obligation to defend matures when the action is brought and it is immaterial whether the trial re-suits favorably or unfavorably to the insured. Employers’ Liability Assurance Corp. v. Youghiogheny & Ohio Coal Co. (8th Cir. 1954) 214 F.2d 418, 422. See also 44 Am.Jur.2d Insurance, § 1539, pp. 420-21.
Cincinnati was faced with the following complaint:
“COMPLAINT FOR DAMAGES
Comes now the Plaintiff, Harrison Ei-teljorg, by counsel, and for his cause of action says:
1. Defendants are residents of Marion County, Indianapolis, Indiana.
2. That on or about July 14, 1974, Plaintiff delivered to Defendants twenty-two (22) paintings by Leon Gaspard to be framed.
3. That on or about August 15, 1974, Plaintiff received from Defendants twenty -one (21) of the twenty-two (22) paintings delivered to Defendants for framing.
4. Defendants were unable to locate and deliver to Plaintiff the last remaining painting by Leon Gaspard entitled “Russian Fair”.
5. Plaintiff several times has demanded from the Defendants the return of the painting by Leon Gaspard entitled “Russian Fair”, and Defendants have been unable to deliver said painting to Plaintiff.
6. That said painting “Russian Fair” by Leon Gaspard is valued at $10,000.00.
WHEREOF, Plaintiff prays for a judgment against the Defendants, and each of them, in the amount of $10,000.00, costs of this action, and for all other relief just and proper in the premises.”
This complaint does not appear to set forth any specific theory of recovery nor does it attribute the loss of the painting to any one cause. In Indiana, it is well settled that an insurer’s duty to defend is determined by the allegations of the complaint coupled with those facts known to or ascertainable by the insurer after a reasonable investigation.1 American States Insurance Co. v. *1107Aetna Life & Casualty Co. (3d Dist. 1978) Ind.App., 379 N.E.2d 510. Unless non-coverage appears, the insurer’s duty to defend is triggered. This duty was elucidated in G. Couch, 14 Cyclopedia of Insurance Law § 51:45, p. 538 (2d ed. R. Anderson 1965):
“the insurer’s duty to defend against a claim coming within the policy coverage is not discharged by the fact that the plaintiff’s pleading is not perfect: that is, the insurer’s obligation is not merely to defend in cases of perfect declarations, but also where by any reasonable intendment of the pleadings liability of the insured can be inferred, and neither ambiguity, inconsistency, nor duplicity in the plaintiff’s complaint or declaration can justify escape of the insurer from its obligation to defend.” (Emphasis supplied.)
Even if the insurer knows the allegations to be untrue, the obligation to defend even groundless suits compels the insurer to defend unless the claim is clearly shown to be excluded by the policy. Loftin v. U. S. Fire Insurance Co. (1962) 106 Ga.App. 287, 127 S.E.2d 53. As an Ohio Court noted:
“There is but one question for this court to determine. It is: Did the pleadings bring this action within the coverage of the policy? If they did, the insurance company was required to defend, regardless of its ultimate liability to the insured.” (Citations omitted.) First National Bank of Akron v. Ohio Casualty Insurance Co. (1953) 101 Ohio App. 37, 137 N.E.2d 770.
In my opinion, the trial court correctly determined that Cincinnati breached its duty to defend. I would affirm the portion of the trial court judgment which awarded the insured, Frame Designs, costs and expenses to be incurred in defending the claim.

. It may be noted that Cincinnati refused to defend Frame Designs without regard to the policy exclusions. As the majority notes, the trial court made the following finding of fact:
*1107“10. That Jan Deemer, adjuster for Cincinnati, did not review or examine Frame Designs’ insurance policy prior to the denying of the claim of Harrison Eiteljorg and the Third-Party Plaintiffs coverage under the insurance policy, and did not know what riders or endorsements were included in the policy of Frame Designs.”
This merely reinforces my view that not only is the duty to defend a separate duty from the duty to indemnify the insured under the coverage of the policy, but that Cincinnati so considered it.