Bethel, II, et al. v. Darwin Select Ins. Co., No. 12-3528 (8th Cir. 2013)
Annotate this CasePlaintiffs filed suit against Darwin alleging that the insurance company breached its duty to defend and its implied duties of good faith and fair dealing under the policy at issue. On appeal, plaintiffs challenged the district court's grant of summary judgment in favor of Darwin. The court concluded that Darwin owed no duty to defend plaintiffs because all of the claims at issue fell within the Customer Funds Exclusion; the district court's interpretation of the Customer Funds Exclusion did not violate the illusory coverage doctrine; and the reasonable expectations doctrine did not apply in this case. The court also concluded that the innocent insured doctrine did not obligate Darwin to defend plaintiffs and the district court did not err in granting summary judgment on plaintiffs' claim for breach of the implied contractual duties of good faith and fair dealing. Accordingly, the court affirmed the district court's judgment.
Court Description: Civil case - Insurance. District court did not err in determining defendant had no duty to defend a claim against plaintiffs as the claim fell within the "Customer Funds Exclusion" in the policy; the district court's interpretation of the exclusion did not violate the "illusory coverage" doctrine, the "reasonable expectations" doctrine or the "innocent insured" doctrine; since the defendant insurer had no duty to defend, the district court did not err in granting the insurer summary judgment on plaintiffs' claims for breach of the implied contractual duties of good faith and fair dealing.
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