Background
Jawad Khan appealed adverse summary judgment decisions from the United States District Court for the District of Minnesota. The district court had ruled that State Farm Fire and Casualty Company policies did not entitle Khan to a defense or indemnification in two underlying actions.
The court’s reasoning
The court reviewed the grant of summary judgment de novo and applied Minnesota law to interpret the insurance policy. It concluded that the underlying claims, including those for negligent infliction of emotional distress, were inextricably linked to excluded intentional acts. Citing Minnesota precedent, the court found that the insurer owed no duty to defend claims inextricably linked with alleged intentional acts. Because there was no duty to defend, the insurer also owed no duty to indemnify.
What it means going forward
The decision reinforces that insurers are not required to defend or indemnify insureds when the underlying allegations are inextricably linked to intentional acts excluded from coverage.