VT Mut.Ins. Co. v. Maguire
During a fight in a bar, the insured hit an individual with a glass mug, resulting in emergency surgery and permanent scars. The parties negotiated a settlement of civil liability that included the injured party's promise not to pursue criminal charges. The homeowner's insurance policy at issue covers only accidental injuries and prohibits the insured from making voluntary payments. The company invoked the voluntary payment clause and refused to pay the settlement or attorney fees. The district court ruled in favor of the company. The First Circuit affirmed, finding that, even if there was a duty to defend, the company did not breach that duty. The company had investigated the claim, as required, and the actions of the parties' efforts to avoid criminal prosecutions prevented its participation in negotiations.