Willoughby Hills v. Cincinnati Ins. Co.

Willoughby Hills v. Cincinnati Ins. Co.

Opinion

 [**557]   In Motorists Mut. v.. Trainor (1973), 33 Ohio St. 2d 41 [62 O.O.2d 402], this court held at paragraphs one and two of the syllabus:

"1. An insurance company, which by contract is obligated to defend its insured in a negligence action, may defend in good faith without waiving its right to assert at a later time the policy defenses it believes it has, provided that it gives its insured notice of any reservation of rights.

"2. The test of the duty of an insurance company, under a policy of  [*179]  liability insurance, to defend an action against an insured, is the scope of the allegations of the complaint in the action against the insured, and where the complaint [***6]  brings the action within the coverage of the policy the insurer is required to make a defense, regardless of the ultimate outcome of the action or its liability to the insured. ( Socony-Vacuum Oil Co. v.. Continental Cas. Co., 144 Ohio St. 382 [29 O.O. 563], approved and followed.)"

The question presented in this appeal is whether the determination of the duty to defend is limited solely to an examination of the pleadings in the action against the insured. The resolution of this question necessitates that we define the term "scope of allegations" as it is used in Motorists Mut., supra. 

Our decisions in Motorists Mut., supra, and Socony-Vacuum, supra, clearly stand for the rule that ] the duty to defend may arise from the complaint alone if the allegations in the complaint unequivocally bring the action within the policy coverage. Appellee suggests that the converse must also be true, i.e., where the pleadings do not establish a claim within the policy coverage, no duty to defend arises.  However convenient appellee's suggestion may be, we feel that ] the duty to defend need not arise solely from the allegations in the complaint but may arise at a point subsequent [***7]  to the filing of the complaint. Milliken v.. Fidelity & Cas. Co. of N.Y. (C.A. 10, 1964), 338 F. 2d 35; Spruill Motors, Inc. v.. Universal Underwriters Ins. Co. (1973), 212 Kan. 681, 512 P. 2d 403; Pendleton v.. Pan American Fire & Cas. Co. (C.A. 10, 1963), 317 F. 2d 96, 100; Employers Mut. Liability Ins. Co. v.. Puryear Wood Products Co. (1969), 247 Ark. 673, 676, 447 S.W. 2d 139, 141. For instance, in Allen v.. Standard Oil Co. (1982), 2 Ohio St. 3d 122, this court held that, in the context of an indemnification agreement, the duty to defend could attach at some later stage in the litigation despite the fact that the pleadings did not conclusively establish the duty.

The rationale for the rule was stated in Milliken, supra, at page 40, as follows:

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