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Maine Reaffirms Broad Duty to Defend

Blogs, Insurance Coverage

The Supreme Judicial Court of Maine recently vacated a lower court judgment in favor of a homeowner’s insurer and reaffirmed Maine’s broad application of the duty to defend. Howe, et al, v. MMG Ins. Co., Yor-13-529 (M.E. 2014).

Plaintiffs Janet Howe and Rajesh Mandekar (collectively “Howe”) were sued by their condominium association, River Knoll Farms Condominium Association (“Association”), on allegations of nuisance, negligence and for violations of a statute prohibiting the keeping of a dangerous dog. Howe sought a defense under his homeowner’s policy (“Policy”) issued by MMG Insurance Company (“MMG”). MMG declined to defend Howe on grounds that the Association’s complaint alleged that Howe’s dog was a nuisance, not that it caused “bodily injury” or “property damage,” and therefore the complaint sought only equitable relief not covered by the Policy.

Thereafter, Howe brought a declaratory judgment action against MMG, seeking a declaration that MMG had a duty to defend. MMG answered with a general denial and Howe filed a motion for judgment on the pleadings. Following oral argument, the trial court entered judgment for MMG, based on the following findings: 1) the nuisance count of the Association’s complaint sought only injunctive relief not covered by Howe’s policy; 2) the negligence count made no claim that Howe’s dog caused bodily injury or property damage and therefore failed to allege the elements of the tort, and 3) no private right of action is provided by Maine’s “keeping a dangerous dog” statute.

On appeal, Maine’s highest court vacated the judgment, reaffirming that the duty to defend is broad and is triggered if the complaint tendered contains any allegations that, if proven, could fall within the coverage provided by the policy. The Court explained that if a complaint reveals “a mere potential that the facts may come within coverage, then the duty to defend exists.” Further, where the events giving rise to the complaint may be shown at trial to fall within the policy coverage, an insurer must provide a defense. The Court went on to note that an insurer may have a duty to defend even against a complaint that could not survive a motion to dismiss. Moreover, given that Maine is a notice pleading state, a complaint need only give fair notice of the cause of action by providing a short and plain statement of the claim showing that the pleader is entitled to relief.

With this legal backdrop in mind, the Court evaluated the Association’s complaint and found that facts could be developed at trial which would support claims potentially falling within the coverage grant. Thus, MMG had a duty to defend.

To read a copy of the court’s decision click here