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The Wisconsin Court Of Appeals Holds That An Insurer's Duty To Defend Ends After All At Least Arguably Covered Claims Are Dismissed

In Society Ins. v. Bodart, 2012 WL 2036037 (Wis. Ct. App. June 7, 2012), the Wisconsin Court of Appeals held that an insurer did not have a duty to defend its insured after the only arguably covered claim in a lawsuit against the insured was dismissed, leaving only non-covered claims. The underlying lawsuit included five claims against the insured who submitted the claims to his insurer to defend. The insurer next brought a separate declaratory judgment action asking the trial court to determine whether the insurer had a duty to defend the insured. The trial court found the insurance policy provided at least arguable coverage for only one of the five claims. Therefore, the court ordered that the insurer had a duty to defend the entire action. After the court's order, the insurer assumed the defense and settled three of the five claims, including the one claim the court had concluded was at least arguably covered. Accordingly, the insurer withdrew its defense of the remaining two claims. The insured then filed a contempt motion arguing its insurer violated the court's duty to defend order and should defend the remaining two claims. The trial court denied the motion and this appeal followed.

In a case of first impression in Wisconsin, the issue before the court of appeals was whether the insurer had a continuing duty to defend its insured after the only arguably covered claim against its insured was dismissed, leaving only non-covered claims. After reviewing the insurance policy, case law from other jurisdictions, and treatises, the court of appeals held that an insurer's duty to defend ends after all at least arguably covered claims are settled and dismissed. The court also ruled that the insurer was not required to first seek the court's permission to withdraw after the only arguably covered claim was dismissed.

Society Ins. v. Bodart, 2012 WL 2036037 (Wis. Ct. App. June 7, 2012).

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About this Author

Heidi Vogt, von Briesen Roper Law Firm, Milwaukee, Insurance and Litigation Law Attorney

Heidi Vogt is a Shareholder and Co-Chair of the Litigation and Risk Management Practice Group as well as the Chair of the Insurance Coverage and Risk Management Section. Her practice focuses on insurance coverage litigation, commercial disputes, constitutional law, and complex litigation. She has represented insurance companies in Wisconsin and across the country in both state and federal courts in complex insurance coverage matters for more than 20 years.

She represents and counsels insurance clients on a wide variety of...

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Nick Castronovo, Von Briesen Roper Law Firm, Milwaukee, Corporate, Health and Litigation Law Attorney

Nick Castronovo is a member of the Litigation and Risk Management Practice Group. His practice focuses on commercial and business litigation including contract and lease disputes, construction and property damage claims, OSHA counseling and citation defense, and general civil litigation matters.

Nick helps clients understand the different strategies and potential outcomes available at the beginning of each dispute, appreciates and strongly advocates his clients’ interests at each stage of the litigation, and recognizes creative and positive resolutions to meet his clients’ goals. For example, Nick utilizes this approach when he assists with the handling of a national transportation company’s common carrier claims and accident investigation situations.

Prior to joining von Briesen, Nick worked in all three branches of government. He served as an intern for the Wisconsin Governor’s Office of Legal Counsel, for Justice David Prosser of the Wisconsin Supreme Court and for United States Congressman James Sensenbrenner. His experience relative to government affairs includes analyzing state constitutional law, evaluating disclosures pursuant to Wisconsin’s open records law, assessing compliance with Wisconsin’s open meeting law, assisting with the state administrative rulemaking process, and analyzing legislative history.

During law school, Nick interned at the Wisconsin Department of Justice and was an active member of both the UW Law School’s Moot Court Board and Mock Trial Team.

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