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Illinois Union Insurance Company v. Assurance Company of America

New York Court of Appeals


June 28, 2012

ILLINOIS UNION INSURANCE COMPANY, RESPONDENT,
v.
ASSURANCE COMPANY OF AMERICA, APPELLANT.

This memorandum is uncorrected and subject to revision before publication in the New York Reports.

MEMORANDUM:

The order of the Appellate Division should be modified, without costs, by granting judgment declaring in accordance with this memorandum and, as so modified, affirmed. The certified question should be answered in the negative.

In this insurance coverage dispute, to which California law applies, plaintiff Illinois Union Insurance Company had a duty to defend the insured in the underlying action because Illinois Union did not "eliminate the possibility that the insured's conduct falls within the coverage of the policy" (Montrose Chem. Corp. v Superior Court, 6 Cal 4th 287, 301, 861 P2d 1153, 1161 [1993]). Under the circumstances of this case, however, we agree with Illinois Union that pursuant to equitable contribution principles, it is entitled to reimbursement from defendant Assurance Company of America for an equal share of the costs associated with Illinois Union's defense of the claims in the underlying action.

On review of submissions pursuant to section 500.11 of the Rules, order modified, without costs, by granting judgment declaring in accordance with the memorandum herein and, as so modified, affirmed and the certified question answered in the negative, in a memorandum.

Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.

20120628

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