Nevada Vtn, a Nevada Corporation, Dba Vtn Nevada v. General Insurance Company of America

Nevada VTN appeals the district court’s grant of summary judgment for Nevada VTN’s insurance carrier, General Insurance Company of America (Safeco). Nevada VTN claims that Safeco breached its duty to defend two suits filed against VTN and Safeco to overturn a stipulated judgment on the basis of fraud. Finding that the litigation that gave rise to the stipulated judgment created a duty to defend under the insurance agreement, and that the duty to defend extends to challenges to the stipulated judgment, we reverse the district court.

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In 1970, a small plane owned by the Voorhees-Trindle Flying Club crashed upon return from a bachelor party. All those aboard were killed. The passengers were the President of Nevada VTN, two members of the flying club not employed by Nevada VTN, and three clients of Nevada VTN. The families of the VTN clients brought suit in Nevada and California against VTN for wrongful death.

The complaints alleged that several defendants were liable for the deaths. The most important allegations for purposes of this action were that VTN had negligently supervised its corporate employees, and negligently entrusted them with various responsibilities, thus…