Federated Mutual Insurance v. State Farm Mutual Automobile Insurance

Defendant, State Farm Mutual Automobile Insurance Company (State Farm), appeals the trial court’s order granting summary judgment for plaintiff, Federated Mutual Insurance Company (Federated). State Farm contends that the trial court erred because active tender by an unschooled layperson is not necessary to trigger an insurer’s duty to defend when the insurer has actual notice of the suit. We reverse and remand.

On December 31, 1991, Federated issued an insurance policy to Whitney Volkswagen, Inc. (Whitney), a car dealer. The policy covered a fleet of automobiles that Whitney allowed its…