General Accident Insurance v. West American Insurance

General Accident Insurance Company filed a declaratory relief action against Aetna Casualty & Surety Company and West American Insurance Company, seeking a declaration of coverage and reimbursement for defense and settlement costs it incurred while defending a complaint tendered to all three insurers. Aetna and West American refused the tender of defense of the underlying complaint. General Accident not only accepted the tender from its insured, but agreed to defend the insureds of Aetna and West American under an assignment of their rights against their insurers; it also contributed to the settlement on behalf of the insureds of all three carriers. Summary judgment on the declaratory relief action was granted in favor of Aetna and West American, and General Accident appeals on the duty to defend issue only. We find a duty to defend as a matter of law and reverse.

On April 11, 1989, Donald Owens filed a complaint for damages against, among others, Sportsman Associates, Inc. (SAI), Hall & Powell Insurance Services, Inc. (H&P), and Sportsman, Hall and Powell, Inc. (SHP). Owens alleged that in 1983, he was president and part owner of an insurance agency known as the…