Insurance: Insurer Agreeing To Indemnify/Defend For Damages Does Not Have To Defend Insured Against Third Party Seeking Only Injunctive Relief

 

Local Santa Ana Appellate Court So Holds.

     Acting Presiding Justice Rylaarsdam, in San Miguel Community Assn. v. State Farm General Ins. Co., Case No. G047738 (4th Dist., Div. 3 Oct. 1, 2013) (unpublished) on behalf of a 3-0 panel, framed the issue in this case and answered it as follows:

     “Question: When an insurance company issues a liability policy, agreeing to indemnify its insured against a third party claim for damages covered under the policy, and to defend the insured against any such claim, does the insurer have a duty to defend the insured against a third party lawsuit seeking injunctive relief but no compensatory damages? Answer: No. The third party‟s failure to seek compensatory damages against the insured means the dispute is not a claim for damages under the policy. The insurer‟s defense obligation requires it to provide the insured with a defense against a claim seeking damages potentially payable under the policy, not to defend the insured‟s honor or otherwise assist it in resolving a nonmonetary dispute.”