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Soo Line Railroad Co. v. Brown's Crew Car of Wyoming4/5/2005
authority exists to support such recovery. SCSC Corp.,536 N.W.2d at 319 (citing Morrison v. Swenson, 274 Minn. 127, 137-38, 142 N.W.2d 640, 647 (1966)). In the insurance context, attorney fees are recoverable when an insurer breaches its duty to defend. In Re Silicone Implant Ins. Coverage Litigation, 667 N.W.2d 405, 422 (Minn. 2003). Progressive contends that it did not breach its duty to defend because it defended Brown's in the underlying action--i.e., in the third-party tort claims preceding the instant declaratory-judgment action.
Based on the record before the district court, the district court did not abuse its discretion in awarding Brown's attorney fees because Progressive breached its duty to defend. After Progressive refused Brown's tender of its defense in the declaratory-judgment action, Brown's filed a cross-claim against Progressive seeking to recover costs and expenses, including fees, in defending the instant action. It is undisputed that Brown's is an insured under Progressive's policy. Progressive's policy states that it has "the right and duty to defend any 'insured' against a 'suit' asking for [damages because of bodily injury ]." Because, as noted above, the term damages under the policy can reasonably be interpreted to include legal expenses and fees incurred in defending a tort claim, Progressive had a duty to defend Brown's in the instant declaratory-judgment action where Soo Line sought reimbursement for damages. Cf. Jostens, Inc. v. Mission Ins. Co., 387 N.W.2d 161, 165-66 (Minn. 1986) (ruling that the duty to defend a claim against an insured arises when any part of the claim is arguably within the scope of the policy's coverage).
DECISION
Because we hold that a general indemnity agreement including an assumption of tort liability constitutes an insured contract, the district court did not err by concluding that Progressive must reimburse Brown's for Soo Line's legal expenses and attorney fees arising from the third-party tort claims. In addition, the district court did not abuse its discretion by awarding Brown's attorney fees for defending in the instant declaratory-judgment action.
Affirmed.
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