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Makarka v. Great American Insurance Co.12/22/2000
hat are "not anticipated" are insured. As a modifier, rather than a triggering event, "caused by an accident" is unambiguous.
Here, it is undisputed that Makarka's injuries were caused by an "accident." The problem is that the accident causing these bodily injuries occurred long after Callihan performed his faulty work on Voliva's brakes and long after the Great American policy was canceled. And Makarka fares no better if Callihan's negligent work is viewed as an "accident," since the property damage caused by that "accident" is not the damage at issue in Makarka's complaint.
Thus, unlike the language contained in the policies in Sam Harris and the other cases cited by Makarka, the language of the Great American policy is not ambiguous. Since the date of policy cancellation and the date of Makarka's accident were not disputed, a reasonable insured would not expect coverage for that accident under this policy. The superior court appropriately ordered summary judgment on the coverage question.
C. Duty to Defend
Makarka contends that Callihan's tender of the lawsuit defense to Great American created a reasonable expectation of coverage that required Great American to provide a defense. Our duty-to-defend cases have established that where "vagaries law and fact" are sufficient to create the potential that an insured will incur covered liability, the insurer must defend and that failure to defend gives rise to an indemnity remedy, even if it could later be proved that no coverage was due. The potential for coverage may be shown either on the face of the complaint or through facts the insurer knew or could have reasonably ascertained that would bring an otherwise uncovered complaint within the policy's coverage.
Here, Makarka's complaint presents no factual ambiguity regarding coverage, nor does Makarka point to facts outside the complaint that could have formed a factual basis for coverage. The complaint alleged negligent repair of Voliva's brakes during the policy term and an accident, due in part to brake failure, outside the policy term. No claim was made for damage to Voliva's brakes. Thus, Gerik tendered a claim to Great American for bodily injury that occurred after Gerik had canceled the Great American policy. Further, Makarka points to no extrinsic fact outside the complaint that would have brought Makarka's claim under the policy. He does claim that there was ambiguity about the "degree of property damage" to Voliva's brakes, but since Makarka made no claim for property damage to Voliva's brakes, any dispute over that fact is immaterial to the issue of coverage.
A duty to defend may also exist where the resolution of a contested legal question may lead to covered liability against the insured. But a duty to defend does not arise whenever an insurer and an insured have a dispute over coverage. In O'Neill Investigations, Inc. v. Illinois Employers Insurance of Wausau, we heard a case of first impression regarding an insurer's duty to defend the insured against the state's suit for injunctive relief, civil penalties, and an order "for restoration to individuals of monies or property acquired by defendants as the result of conduct complained of" under the Consumer Protection Act. Because the state's complaint did "not allege a 'negligent act, error, or omission' or 'seek damages,'" the insurer refused to provide O'Neill with a full defense. O'Neill, on the other hand, argued that there was "an ambiguity as to whether restitutionary relief such as that sought by the state constitutes 'damages' within the intended coverage of the policy."
In O'Neill, as here, we considered the policy language and the undisputed facts
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