Court of Appeals Extends the Breadth of the Duty to Defend

In late January, 2011, the Georgia Court of Appeals entered its opinion in the case of Landmark American Insurance Company v. Kahn (2011).  This recent opinion supports the argument that insurers have a duty to defend based on plaintiff’s pleading in their complaint.  Kahn involved a case in which a bar employee shot Kahn in the back six times.  The bar’s general liability policy had an intentional/criminal act exclusion with an exception for an employee acting to protect person or property.

Despite the absence of any evidence the employee acted to protect person or property, the trial court held there was a duty to defend, and entered summary judgment for the insured.

In affirming the trial court, the Court of Appeals held the allegations contained in the complaint, liberally construed, could be covered under the policy.  The grant of summary judgment was on the duty to defend only.  It appears from the opinion the Court was critical of the insurer for not using the safe harbor for coverage.

An application for certiorari has been filed with the Georgia Supreme Court.  It is common for plaintiff’s attorney to draft complaints broadly in a way that may bring the claim within coverage.  If Kahn is upheld, insurers in Georgia have to think even harder about denying coverage outright.