American Home Assurance Company, a New York Corporation v. Leslie L. Miller, and Kathleen Miller, Husband and Wife Leslie L. Miller, P.C., a Professional Corporation, Leslie L. Miller, Counterclaimants v. American Home Assurance Company, Counterdefendants

717 F.2d 1310 AMERICAN HOME ASSURANCE COMPANY, a New York corporation, Plaintiff-Appellee, v. Leslie L. MILLER, and Kathleen Miller, husband and wife; Leslie L. Miller, P.C., a professional corporation, Defendants-Appellants. Leslie L. MILLER, et al., Counterclaimants, v. AMERICAN HOME ASSURANCE COMPANY, Counterdefendants. No. 82-5820. United States Court of Appeals, Ninth Circuit. Argued and Submitted March 16, 1983. Decided Oct. 6, 1983. M. Byron Lewis, Jennings, Strouss & Salmon, Phoenix, Ariz., for plaintiff-appellee. Amil J. Ajamie, Ajamie, Fay & Webb, Phoenix, Ariz., for defendants-appellants. Appeal from the United States District Court for the District of Arizona. Before FAIRCHILD * , HUG, and FARRIS, Circuit Judges. HUG, Circuit Judge: 1 The issue presented in this case is whether an insurer is obligated under a malpractice policy to represent an insured where, in a collection action, a debtor of the insured claims an offset by reason of the insured's malpractice on a matter unrelated to the debt. The district court held that the insurer is not obligated to represent the insured. We reverse. 2 * American Home Assurance brought this declaratory relief action to…