Karen Elliott, Plaintiff v. Michael G. Donahue, Defendant-Appellant-Petitioner

Summary

The court held that an insured may recover reasonable attorney fees incurred in successfully establishing insurance coverage when the insurer denies coverage and thereby forces the insured to litigate. Although the insurer's initial denial was not a breach because coverage was fairly debatable and the insurer assumed the defense once coverage was established, the insurer failed to stay the liability proceedings and was liable for fees attributable to that defense. The court also held that supplemental relief under the declaratory-judgment statute permits recovery of fees based on equitable principles.