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Elliott v. Hanover Insurance Co.6/4/1998
otential basis for recovery, the insurer must defend the insured regardless of the actual facts on which the insured's ultimate liability may be based." Gibson v. Farm Family Mut. Ins. Co., 673 A.2d 1350, 1352 (Me. 1996).
Hanover urges us to create an exception to the pleading comparison test for situations in which undisputed facts show that the injury in question was not covered by the policy. We have, however, repeatedly used the pleading comparison test when determining if an insurer has a duty to defend, see, e.g., Penney v. Capitol City Transfer, Inc., 1998 ME 44, 5-7, 707 A.2d 387, 388-89; Patrons Oxford Mut. Ins. Co. v. Garcia, 1998 ME 38, 5-9, 707 A.2d 384, 385-86; Commercial Union Ins. Co. v. Royal Ins. Co., 658 A.2d 1081, 1082-83 (Me. 1995), and have explained our rationale for the rule as follows:
If we were to look beyond the complaint and engage in proof of actual facts, then the separate declaratory judgment actions ... would become independent trials of the facts which the [insured] would have to carry on at his expense. ... We see no reason why the insured, whose insurer is obligated by contract to defend him, should have to try the facts in a suit against his insurer in order to obtain a defense.
Travelers Indem. Co. v. Dingwell, 414 A.2d 220, 227 (Me. 1980). In Patrons Oxford we declined an insurer's invitation to create an exception to the general rule in situations where the insurer asserts that the applicability of a coverage exclusion is undisputed. Patrons Oxford, 1998 ME 38 at 9, 707 A.2d at 386. In doing so, we noted that such an exception would require the court to make a factual inquiry regarding the applicability of a coverage exclusion and would require the insured to engage in the litigation of at least some aspects of the injured party's claim. Id. This result would be inconsistent with the principles enunciated in Dingwell. An insured should not be required to litigate the underlying facts of a claim in order to obtain a defense to the litigation when he has already obligated an insurer by contract to defend him. Confining our review to an examination of the complaint and the policy, we conclude that there is a potential that the facts ultimately proved may come within the coverage. We therefore affirm the trial court's grant of a summary judgment in favor of Elliott on this issue.
III.
Hanover next asserts that regardless whether it had a duty to defend Castonguay, it did not forfeit any right it may have to argue the issue of indemnification and that we did not intend our decision in Marston v. Merchants Mut. Ins. Co., 319 A.2d 111 (Me. 1974), to preclude an insurer who fails to provide a defense to the underlying action from asserting the defense of noncoverage in a subsequent action brought by the insured or the insured's assignee. We agree.
In Marston we stated:
It is ... well established that an insurer who had reasonable notice of the pendency of an action by the injured person against the insured and was requested to assume its defense but declined to do so[,] electing to disclaim coverage, is bound by the judgment in that action as to issues which were or might have been litigated therein in a subsequent suit by the injured person for recourse to the policy.
Id. at 114. Elliott argues that the language quoted above precludes Hanover from raising noncoverage as a defense in his action against Hanover. We did not intend, however, that our decision in Marston have such a broad connotation.
Many courts have grappled with the issue whether an insurer who wrongfully refuses to defend a complaint that alleges facts within coverage is estopped from
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