Court Opinion

ID: 9738742
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:01:44.937709+00
Date Added: 2024-06-11T07:24:08.197737
License: Public Domain

Cynar, P.J.
(concurring). In concurring in the decision to affirm, I deem it necessary to write separately. While the trial court, as well as my brother, opine that the contract to defend the insured is not dependent upon the good or bad faith of the insurer, they stray toward well-founded, although not applicable, decisions concerned with acts of bad faith by an insurer in failing to settle. The issue in Jones v National Emblem Ins Co, 436 F Supp 1119, 1124-1125 (ED Mich, 1977), concerned bad faith in failing to settle. The court gave heed to follow standards which have long been recognized and followed after insurers assume the defense of their insured. All the same, the insurer in this case owed something more to Jamison, its insured, than the barren letter which was sent to him on July 8, 1971.
Was the defendant under obligation to defend the suit against Jamison? The contract of insurance states:
"* * * and the company 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”.
*545In City Poultry & Egg Co v Hawkeye Casualty Co, 297 Mich 509, 512; 298 NW 114 (1941), the Court said in answer to the question of whether defendant was under an obligation to defend the suit:
"The answer to this question depends upon whether the undertaking to defend suits against the insured alleging personal injuries is independent and severable from the obligation to pay a judgment — or independent from the exception stipulating that the insurance company was not obliged to pay a judgment if the injured person was being transported at the time by the truck.
"We are of the opinion that the undertaking to defend and the undertaking for payment of damages were severable and independent.”
To the same effect see Zurich Ins Co v Rombough, 384 Mich 228; 180 NW2d 775 (1970), and Dochod v Central Mutual Ins Co, 81 Mich App 63; 264 NW2d 122 (1978).
The duty to defend is distinguishable from, and in some ways broader than, the duty to indemnify. Ins Co of North America v Forty-Eight Insulations, Inc, 451 F Supp 1230 (ED Mich, 1978), citing Sprayregen v American Indemnity Co, 105 Ill App 2d 318; 245 NE2d 556 (1969), McFadyen v North River Ins Co, 62 Ill App 2d 164; 209 NE2d 833 (1965).
In Maryland Casualty Co v Peppers, 64 Ill 2d 187; 355 NE2d 24 (1976), the Illinois Supreme Court stated:
"In determining whether the insurer owes a duty to the insured to defend an action brought against him, it is the general rule that the allegations of the complaint determine the duty. If the complaint alleges facts within the coverage of the policy or potentially within the coverage of the policy the duty to defend has been established. (Citations omitted.)
*546"This duty to defend extends to cases where the complaint alleges several causes of action or theories of recovery against an insured, one of which is within the coverage of a policy while others may not be.”
Faced with a similar situation, the Federal Court of Appeals for the Seventh Circuit forcefully stated:
"[I]t has been universally recognized that an insurer has a duty to defend under a defense clause if there is doubt whether the claim comes within the coverage of the policy.” Carboline Co v Home Indemnity Co, 522 F2d 363 (CA 7, 1975).
In this case, as it ultimately turned out, the Wayne County Circuit Court determined that Jamison was entitled to coverage under the insurance contract. The Michigan Supreme Court affirmed the circuit court. However, even prior to the circuit court judgment, there was at least a doubtful or potential claim against Jamison, to which he was entitled to a defense. The letter written to Jamison, dated July 8, 1971, was insufficient to negate the insurer’s duty to defend its insured. The insured as well as the insurer would have been protected had the insurer undertaken to defend the insured, while reserving the right to refuse to pay under the policy.
Based on the facts in this case, because there was an absolute duty to defend, I agree to affirm the judgment of the trial court.