When Only Injunction Is Requested, No Duty To Defend.

In the early stages of litigation, a third party brought an action against an insured for injunctive relief only, plus a claim for punitive damages. Later, the third party prayed for compensatory damages as well as injunctive relief. At that point, the insurance company agreed to assume a defense under its Duty to Defend, but refused to reimburse for any defense costs incurred prior to the amendment of the third party’s pleading. In the present action, the insured sues the insurer alleging it breached obligations to them under its liability policy by refusing to reimburse for the cost of defending the early stages of the lawsuit brought by the third party. The trial court entered summary judgment in favor of the insurance company. In affirming, the appellate court stated: “In the abstract, it is irrelevant that the third party might have suffered harm that could give rise to a claim for damages covered under the insured’s policy. What matters is whether the third party sought to recover damages from the insured.” (San Miguel Community Association v. State Farm General Insurance Company (Cal. App. Fourth Dist., Div. 3;  October 17, 2013) 220 Cal.App.4th 798.