Illinois Union Ins. Co. v Assurance Co. of Am., 19 NY3d at 943 (2012)

2012 NY Slip Op 05201 [19 NY3d 942]
June 28, 2012
Court of Appeals

[*1]

In the Matter of Illinois Union Insurance Company, Respondent,
v
Assurance Company of America, Appellant.

Decided June 28, 2012

Illinois Union Ins. Co. v Assurance Co. of Am., 86 AD3d 501, modified.

{**19 NY3d at 943} OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be modified, without costs, by granting judgment declaring in accordance with this memorandum and, as so modified, affirmed. [*2]The certified question should be answered in the negative.

In this insurance coverage dispute, to which California law applies, plaintiff Illinois Union Insurance Company had a duty to defend the insured in the underlying action because Illinois Union did not “eliminate the possibility that the insured’s conduct falls within the coverage of the policy” (Montrose Chem. Corp. v Superior Ct., 6 Cal 4th 287, 301, 861 P2d 1153, 1161 [1993]). Under the circumstances of this case, however, we agree with Illinois Union that pursuant to equitable contribution principles, it is entitled to reimbursement from defendant Assurance Company of America for an equal share of the costs associated with Illinois Union’s defense of the claims in the underlying action.

Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur in memorandum.

On review of submissions pursuant to section 500.11 of the Rules of the Court of Appeals (22 NYCRR 500.11), order modified, etc.