Insurer that Refused to Defend in Underlying Mold Action May Not Raise Causation Defenses in Garnishment Proceeding

ST. PAUL, Minn. - An appeals court recently ruled that an insurer, which refused to defend its insured in an underlying action concerning mold contamination allegedly due to defective roof work, is not permitted to raise causation defenses in the subsequent garnishment proceeding. Anthony Parr, et al., Judgment Creditors/Appellants, v. Federico Gonzalez, Judgment Debtor/Respondent, Zurich American Insurance Co., Garnishee/Respondent, No. A03-72 (Minn. App. Ct.).

According to the Sept. 30 opinion filed by Minnesota's appeals court in the garnishment proceeding, because the default judgment in the underlying action established the insured's liability for the mold damage, the insurer is not permitted …