The Massachusetts Appeals Court reversed the dismissal of claims against an insurance company after it admitted it had a duty to defend its insured in an underlying matter but refused to do so, remanding its insured’s allegations of breach of contract and unfair or deceptive practices.
In addition, this case has brought forth a larger legal question in Massachusetts of whether an insurance company, and under what circumstances, has a right to recoup defense costs provided to an insured. The appellate court noted it was up to the Massachusetts Supreme Judicial Court to determine if a right to recoup was recognized, according to the opinion filed March 31.
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