St. Paul Fire and Marine Insurance Company sought a declaratory judgment that it had no duty to defend the Town of Gurley from the claims and damages asserted in underlying litigation between the and M & N Materials, Inc.
M & N sued the Town for inverse condemnation and other causes of action after the Town annexed property on which M & N had planned to operate a rock quarry and subsequently implemented regulations prohibiting this use.
St. Paul had issued a Public Entity Composite Policy to the Town. The Policy contained Public Entity Management Liability Protection (“PEML”) and Public Entity General Liability Protection (“PEGL”).
The court held that St. Paul had a duty to defend the Town against M & N’s claims. The court reserved the issue of indemnification, pending the outcome of the trial.