Voorhees v. Preferred Mutual Insurance Co.3/20/1991
mise is to defeat or pay a claim within the policy coverage" and that " he duty exists only as to counts stating a theory of recovery for which coverage is provided, but not as to counts not covered." Id. at 470, 557 A.2d 693. See also City Council of Elizabeth v. Fumero, 143 N.J. Super. 275, 288-289, 362 A.2d 1279 (Law Div.1976). However, there is language in other cases suggestive of a contrary result. In Mount Hope Inn v. Travelers Indemnity Company, 157 N.J. Super. 431, 384 A.2d 1159 (Law Div.1978), Judge Polow wrote that the "duty [to defend] remains even though ambiguity may result based upon other language charged in other parts of the complaint or other allegations are made which do not come within the provisions of the policy." Id. at 437, 384 A.2d 1159. The judge went on to say that " f the claim is stated in two conflicting theories, one which requires coverage and the other which does not, the carrier has no choice. It must defend." Id. at 440, 384 A.2d 1159. In none of these decisions, however, was the question of apportionment raised.
Elsewhere, the courts have held that an insurer must bear the entire cost of defense when there is no reasonable means of prorating the expenses incurred between covered and non-covered claims. See, e.g., Burlington Drug Co., Inc. v. Royal Globe Ins. Co., 616 F. Supp. 481, 485 (D.Vt.1985); Crist v. Insurance Co. of North America, 529 F. Supp. 601, 604 (D.Utah 1982); Tampa Electric Co. v. Stone & Webster Engineering Corp., 367 F. Supp. 27, 31 (M.D.Fla.1973); Hogan v. Midland Nat'l Insurance Co., 3 Cal. 3d 553, 91 Cal.Rptr. 153, 476 P. 2d 825 (1970); Jostens, Inc. v. CNA Ins./Continental Cas., 403 N.W. 2d 625 (Minn.1987); Home Insurance Co. v. Pinske Bros., Inc., 160 Mont. 219, 500 P. 2d 945 (1972); National Steel Construction Co. v. National Union Fire Insurance Co., 14 Wash.App. 573, 543 P. 2d 642 (1975). A different rule has been applied where defense costs can be readily apportioned. See Equal Employment Opportunity Comm'n v. Southern Publishing Co., Inc., 894 F.2d 785, 791 (5th Cir.1990); Budd Company v. Travelers Indemnity Company, 820 F.2d 787, 790 (6th Cir.1987); Insurance Co. of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212, 1224-1225 (6th Cir.1980), cert. den. 454 U.S. 1109, 102 S. Ct. 686, 70 L. Ed. 2d 650 (1981); Waite v. Aetna Casualty and Surety Company, 77 Wash. 2d 850, 467 P. 2d 847, 852 (1970) (en banc).
Against this backdrop, we perceive no sound basis to remand for a hearing on apportionment of defense costs. Instead, we are convinced that in its pragmatic aspect any precise allocation of expenses would be impossible. It appears likely that a great deal of the defense costs was incurred in general preparation and cannot be separated by distinct claims or time periods. Moreover, requiring Preferred to bear responsibility for defense costs is consonant with the strong public policy in favor of requiring the provision of a defense where coverage is at least arguable. In this case, Preferred breached its contractual duty to defend when it refused coverage without taking any steps to investigate Sisto's claim or otherwise seek clarification. As we stressed previously, Voorhees was left to fend for
herself. Under these circumstances, Preferred should be required to reimburse Voorhees for the full amount of the defense costs.
Reversed and remanded for entry of judgment in favor of plaintiff.
DEIGHAN, J.A.D. (dissenting).
I respectfu
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