Hartford Accident & Indemnity Co. v. Superior Court

This petition for writ of mandate presents an issue of first impression in California: does a primary insurer’s duty to defend continue after a dispute arises over exhaustion of policy limits but before the insurer has established in court that its coverage limits have been exhausted? The superior court ruled that the duty to defend continues until the insurer proves in a coverage action that the policy limits have been exhausted. We conclude the court correctly applied Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076 [ 17 Cal.Rptr.2d 210 , 846 P.2d 792 ] and anticipated Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287 [ 24 Cal.Rptr.2d 467 , 861 P.2d 1153 ] (Montrose). We further conclude, however, that the duty existing during this interim period should be considered contingent. A primary insurer which ultimately proves earlier exhaustion of limits may obtain reimbursement for expenses for which other insurers are obligated. We deny the petition.

Facts and Procedure

In an attempt to make our analysis clear, we simplify a complex, multiparty insurance coverage case. Real parties in interest Syntex Corporation, Syntex (U.S.A.) Inc., Syntex…