'Neutral' Complaint Invokes Insurer's Duty to Defend Drywall Supplier

SACRAMENTO, Calif. - A federal judge has ruled that a "neutral" complaint accusing a contractor of installing mold-contaminated drywall requires an insurer to provide a legal defense. McGranahan v. The Insurance Corporation of New York, No. S:07-65 FCD KJM (E.D. Calif.).

Judge Frank C. Damrell Jr. of the U.S. District Court for the Eastern District of California granted a motion for summary judgment on the defense issue on Feb. 13, while denying similar motions by both sides on the insurer's duty to indemnify.

The case is currently scheduled for trial in September, but the parties have agreed to submit Settlement …