{"id":898112,"date":"2020-10-20T14:53:10","date_gmt":"2020-10-20T20:53:10","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898112"},"modified":"2020-10-20T14:53:14","modified_gmt":"2020-10-20T20:53:14","slug":"duty-to-defend-connecticut","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/duty-to-defend-connecticut\/","title":{"rendered":"Connecticut Supreme Court Finds Duty to Defend When Case Law is Uncertain"},"content":{"rendered":"\n

Eric B. Hermanson and Austin D. Moody | White and Williams<\/a><\/p>\n\n\n\n

The Connecticut Supreme Court recently addressed whether an insurer has a duty to defend<\/a> when faced with legal uncertainty as to whether coverage is owed: for example, when there is no Connecticut case law on point, and courts outside of the state have reached conflicting decisions.<\/p>\n\n\n\n

The Court suggested that an insurer, in these circumstances, should defend the insured, and should seek a declaratory judgment from a court as to whether coverage is owed.<\/p>\n\n\n\n

The issue in Nash St., LLC v. Main St. Am. Assurance Co.<\/em>,[1]<\/a> arose out of a home collapse in Milford, Connecticut. The owner of the home (Nash) hired a contractor (New Beginnings) to renovate the home. New Beginnings, in turn, retained a subcontractor to lift the house and to do concrete work on the foundation. While the subcontractor was lifting the house, the house shifted off the supporting cribbing and collapsed.<\/p>\n\n\n\n

Nash sued New Beginnings, which tendered to its insurer (Main Street), which denied coverage. Main Street based its coverage denial on two exclusions in its policy. The first exclusion barred coverage for property damage to \u201c[t]hat particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the \u2018property damage\u2019 arises out of those operations . . . .\u201d. The second exclusion barred coverage for property damage to \u201c[t]hat particular part of any property that must be restored, repaired or replaced because \u2018your work\u2019 was incorrectly performed on it.\u201d[2]<\/a><\/p>\n\n\n\n

Following Main Street\u2019s refusal to defend, Nash obtained a default judgment against New Beginnings. When the judgment went unsatisfied, Nash brought a lawsuit against Main Street directly. The trial court \u2013 agreeing with Main Street\u2019s position \u2013 found the exclusions barred any duty to defend. But, on appeal, the Connecticut Supreme Court reversed, and found a duty to defend had been owed.<\/p>\n\n\n\n

In so ruling, the Court made clear that it was not opining on whether the exclusions actually precluded coverage. Indeed, the Court stated that it was not required \u201cto determine conclusively what those exclusions mean.\u201d Instead, the Court noted that New Beginnings\u2019 tender gave rise to uncertainty as to coverage under Connecticut law; and it said this legal uncertainty was sufficient to trigger Main Street\u2019s duty to defend.<\/p>\n\n\n\n

Discussing the issue further, the Court noted that uncertainties as to coverage can be either factual or legal. A factual uncertainty exists when it is unclear from the face of a complaint whether the allegations fall within coverage. A legal uncertainty commonly occurs when policy language is ambiguous in application to the specific factual scenario at issue. But, extending this principle, the Court found legal uncertainty also exists in a second scenario: when there is a split of authority in other jurisdictions as to the meaning of a particular policy provision, and there is no relevant appellate authority within Connecticut.<\/p>\n\n\n\n

This case presented a legal uncertainty of this type:<\/p>\n\n\n\n