Shoshone First Bank v. Pacific Employers Insurance Company
Supreme Court of Wyoming
2 P.3d 510 (2000)
After a former director sued Shoshone First Bank and its parent company (defendants) alleging five causes of action including invasion of privacy, the defendants' general-liability insurer, Pacific Employers Insurance (plaintiff), initially delayed responding and later agreed to defend under a reservation of rights, since its liability specialist believed the invasion-of-privacy claim might be covered; Pacific spent $215,000 defending the suit (which settled), while the defendants separately incurred $40,000 in their own legal costs before Pacific took over. Pacific then sued the defendants seeking to recover the portion of its defense costs attributable to the uncovered causes of action, and the case was certified to the Wyoming Supreme Court.
Whether an insurer can allocate and recover costs attributable to the defense of claims not covered by the insurance policy where at least one of the claims alleged is covered by the insurance policy.