Nationwide Property and Casualty Co. v. State Farm Fire and Casualty Co.

Declaratory judgment action arising out of a wrongful death lawsuit. Nationwide filed the action against State Farm alleging that the defendant had a duty to defend in the underlying suit under a commercial general liability policy and that it was entitled to indemnification. The circuit court concluded that there was no duty to defend because coverage was precluded by an automotive exclusion in the CGL policy. Nationwide argued on appeal that State Farm was estopped from raising policy defenses to coverage because it failed to either defend the underlying suit under a reservation of rights or to timely seek declaratory judgment on the question. The appellate court agreed with Nationwide that the underlying complaint alleged facts outside of the automotive exclusion that fell within or potentially within the CGL policy and reversed the portion of the lower court’s judgment holding there was no duty to defend. The court also found State Farm was estopped from raising policy defenses and that Nationwide was entitled to indemnification. The court affirmed all other aspects of the circuit court’s judgment. (FITZGERALD SMITH and COBBS, concurring).