Case Briefs

In Auto Europe LLC v. Connecticut Indemnity Co., 321 F.3d 60 (1st Cir. 2003); a panel of the First Circuit Court of Appeals concluded that a liability insurer has an obligation to defend its insured against a suit alleging violations of Maine's consumer protection statute. The insured was sued by customers of its auto rental service who claimed in pleadings that the insured had intentionally defrauded and misled consumers regarding additional fees for auto rentals. The customers alleged that these actions had violated various state and federal laws, including Maine's consumer protection statute. The insured's insurance contract provided coverage for “any negligent act, error or omission,” but excluded “liability arising out of any act, error or omission which is willfully dishonest, fraudulent or malicious, or in willful violation of any penal or criminal statute or ordinances, and is committed (or omitted) by or with the knowledge or consent of the 'insured'.” Id. at 63. Citing this exclusion, the insurer argued that it did not have a duty to defend the insured in the underlying action.