First Bank of Turley, Plaintiff v. Fidelity and Deposit Insurance Company of Maryland, Defendant

Summary

The court answered three certified questions concerning an insurer's duty to defend and an insured's failure to provide post-denial information. It held that inadequate notice is not independently actionable, but may operate as a contractual defense that completely bars or proportionally reduces recovery depending on its effect on the insurer's ability to perform. The court rejected comparative bad faith as a tort or comparative-fault defense and left application of these rules to the certifying federal court.