Frake

*571 Opinion

INTRODUCTION

After consuming several beers, respondent Patrick Frake struck his friend, respondent John King, in the groin, causing significant injuries. King filed a complaint against Frake for negligence, assault and battery and intentional infliction of emotional distress. Frake tendered the case to appellant State Farm General Insurance Company under a renter’s policy that provided coverage for bodily injury “caused by an occurrence,” which the policy defined as “an accident.” Frake told State Farm he struck King as part of a consensual game and that he did not intend to injure King. Although State Farm did not believe Frake’s conduct qualified as “an accident,” it agreed to defend the action with a full reservation of its rights. The King case proceeded to trial and the jury awarded King over $400,000.

State Farm then filed a declaratory relief action alleging that it had no duty to defend or indemnify Frake because his conduct did not qualify as an accident within the meaning of his insurance policy. Frake and King each filed cross-complaints alleging breach of contract and the covenant of good faith and fair dealing.

Several months later, the parties filed…