Allstate Insurance Company v. Webb ( 1971 )

Chief Judge Mallard

dissenting.

Plaintiff, by its policy, contracted with the insured to do two things. First, it contracted to pay on behalf of the insured all sums for the payment of which the insured became legally liable, because of bodily injuries sustained by any person arising out of the use of an automobile described therein, to the extent that its liability did not exceed the limit fixed by its policy. Secondly, plaintiff contracted to defend, at its expense, on behalf of its insured, any suit, even though groundless, brought against him, alleging bodily injury and seeking damages payable under the terms of the policy. Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E. 2d 513 (1967).

The second obligation assumed by plaintiff in its policy is absolute and does not depend upon the liability of its insured. It is my opinion that plaintiff had the duty to defend the claim under the express terms of the policy and that it may not recover from plaintiff expenses incurred with respect to investigating, adjusting or settling the claim. It is my further opinion that the portion of the policy wherein the insured agrees to reimburse the company for any payment made by. the company which it would not have been obligated to make under the terms of the policy except for the Financial Responsibility Act, refers only to payments in satisfaction of insured’s liability. I do not interpret the language to include also the right to recover incidental expenses incurred in connection with the defense or settlement of such claim. If that is not the meaning of the language in the policy, the language is ambiguous and it is elementary that provisions of an insurance policy, if ambiguous, are to be construed in favor of the insured. Insurance Co. v. Insurance Co., supra; Anderson v. Insurance Co., 266 N.C. 309, 145 S.E. 2d 845 (1966); Walsh v. Insurance Co., 265 N.C. 634, 144 S.E. 2d 817 (1965).

For the reasons herein stated, I feel the portion of the judgment which allows recovery of expenses paid to the adjusting firm and to the attorney should be reversed.