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Prichard v. Liberty Mutual Insurance Co.11/8/2000
cation obligation but like defense costs), are independent of actual coverage.
The trial court was thus well within the bounds of reason to grant a new trial as to the cost issue. We need not comment further on the issues that might be part of any new trial.
There is, finally, the question of the standing of certain of the Prichard parties at the retrial, though it is probably only an academic matter. Only two of the Prichard entities, Prichard himself and La Carona Foods, were sued on the one potentially covered cause of action, defamation. From this it follows that only they were owed a defense, and from that we must conclude that only they have a claim for the "costs taxed" in the underlying action. As a housekeeping matter, then, the plaintiffs on retrial will only be Prichard and La Carona. (The new trial order, then, is technically reversed insofar as it applies to any other plaintiffs than Prichard and La Carona, but is affirmed as to them.)
VI. DISPOSITIONS
To recap our conclusions: Liberty defended the underlying action, and did not breach its duty to defend. Ergo, Liberty did not breach the contract in bad faith, and therefore was not estopped to assert a policy period defense. The merits of that defense must be tried on remand. Likewise, because the insurance contract obligated Liberty to pay all costs in any lawsuit it defends, Prichard certainly may have a new trial in which to seek the costs assessed him in the underlying action.
The judgment and new trial order are affirmed in part and reversed and remanded with directions in part, in accord with the summary provided at the beginning of this opinion. Given the split decision, each side will bear its costs in this appeal.
WE CONCUR:
CROSBY, J.
BEDSWORTH, J.
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