Firemen's Insurance Company of Newark v. Bauer Dental Studio, Inc. And Dailey Dental, Inc.

Firemen’s Insurance Company of Newark filed this diversity action seeking a declaration of no coverage with regard to the claims of Dailey Dental, Inc., asserted in South Dakota state court against Firemen’s insured, Bauer Dental Studio. The district court held that the state court claims were covered under the terms of the insurance policy, Firemen’s Ins. Co. v. Bauer Dental Studio, 623 F.Supp. 84 (D.S.D.1985) (Firemen’s I), and assessed attorney fees against Firemen’s under South Dakota insurance law governing vexatious refusals to pay. Firemen’s Ins. Co. v. Bauer Dental Studio, 626 F.Supp.…