Local Santa Ana Appellate Court So Holds.
Acting Presiding Justice Rylaarsdam, in San Miguel Community Assn. v. State Farm General Ins. Co., Case No. G047738 (4th Dist., Div. 3 Oct. 1, 2013) (unpublished) on behalf of a 3-0 panel, framed the issue in this case and answered it as follows:
“Question: When an insurance company issues a liability policy, agreeing to indemnify its insured against a third party claim for damages covered under the policy, and to defend the insured against any such claim, does the insurer have a duty to defend the insured against a third party lawsuit seeking injunctive relief but no compensatory damages? Answer: No. The third party‟s failure to seek compensatory damages against the insured means the dispute is not a claim for damages under the policy. The insurer‟s defense obligation requires it to provide the insured with a defense against a claim seeking damages potentially payable under the policy, not to defend the insured‟s honor or otherwise assist it in resolving a nonmonetary dispute.”