Westchester Fire Insurance v. Wallerich

SMITH, Circuit Judge.

In this insurance coverage dispute, Westchester Fire Insurance Company (“Westchester”) filed a declaratory judgment action against Douglas Wallerich, Patrick Lowther, and Sharon O’Reilly (collectively “Insureds”), seeking a determination whether it must provide coverage to the Insureds in defending an underlying lawsuit. Additionally, Westchester sought reimbursement of its expenses paid thus far in defending the underlying lawsuit. In response, the Insureds counterclaimed for coverage fees for Westchester’s initial denial of coverage and for attorneys’ fees in defending…