Risely

I.

INTRODUCTION

The trial court granted an insurer’s motion for summary judgment on the ground that, as a matter of law, the insurer’s refusal to defend and indemnify its insured against an injured party’s claim of false imprisonment had not caused the insured to suffer any damages. The trial court concluded that the insurer’s refusal to defend the claim under a homeowners policy was “of no consequence” to the insured because the insurer provided the insured a defense pursuant to a separate automobile policy.

We conclude that the mere fact that the insurer provided its insured with a defense under one policy does not necessarily insulate the insurer from liability for its alleged breach of the duty to defend and settle under a second policy. In this case, the insurer has not established that its refusal to defend under the homeowners policy was of “no consequence” to the insured, as the trial court found. On the contrary, the insurer’s refusal to defend under the homeowners policy potentially increased the insured’s exposure to personal liability. The trial court therefore erred in concluding that, as a matter of law, the insured suffered no damages from the insurer’s…