Mighty Midgets

Farm Family Cas. Ins. Co. v Habitat Revival, LLC, 2012 NY Slip Op 00749 (2nd Dept., 2012)

"[A]n insured who is cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations,' and who prevails on the merits, may recover an attorney's fee incurred in defending against the insurer's action" (Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 84 AD3d 1168, 1171, quoting U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 598 [internal quotation marks omitted]; see Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21; Johnson v General Mut. Ins. Co., 24 NY2d 42). " It is well settled that [*3]an insurer's responsibility to defend reaches the defense of any actions arising out of the occurrence, and defense expenses are recoverable by the insured, including those incurred in defending against an insurer seeking to avoid coverage for a particular claim'" (RLI Ins. Co. v Smiedala, 77 AD3d 1293, 1294-1295, quoting National Grange Mut. Ins. Co. v T.C. Concrete Constr., Inc., 43 AD3d 1321, 1322 [internal quotation marks omitted]). "Moreover, an insured who prevails in an action brought by an insurance company seeking a declaratory judgment that it has no duty to defend or indemnify the insured may recover attorneys' fees regardless of whether the insurer provided a defense to the insured'" (RLI Ins. Co. v Smiedala, 77 AD3d at 1295, quoting U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d at 598 ).

Since the defendants are entitled to a declaration that the plaintiff is obligated to defend and indemnify Habitat and Pintado in the underlying action, they may recover attorneys' fees incurred in defending this action (see Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 84 AD3d at 1171). Accordingly, the Supreme Court should have granted that branch of the defendants' motion which was for a hearing on the issue of attorneys' fees, and we remit the matter to the Supreme Court, Putnam County, for a hearing to determine the amount of the award of the attorneys' fees.

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