Does an insurer's defense of its insured under one policy
excuse its breach of the duty to defend under another? A California
Court of Appeal recently concluded: Not if the insured is
potentially liable for an amount in excess of the policy limits.
Risely v. Interins. Exch. of the Auto. Club, 183 Cal. App.
4th 196 (2010).
In Risely, the insurer (Auto Club) issued its insured
(Turner) two policies: (1) an automobile policy with a limit of
$50,000; and (2) a homeowner's policy with a limit of $300,000.
Turner was sued for false imprisonment, among other claims, after
he refused to allow the plaintiff (Risely) out of his car. Turner
tendered the defense of the action to Auto Club. Auto Club defended
Turner under the auto policy, which did not cover claims for false
imprisonment. But Auto Club denied coverage and refused to defend
under the homeowner's policy, even though that policy expressly
covered claims for false imprisonment.
