Page:Scottsdale Insurance Co. v. Morrow Valley Land Co.pdf/3

 Washington County Circuit Court, which it amended on January 5, 2010, adding Scottsdale's insurance agent, Regions Insurance, Inc. (Regions), and seeking damages for breach-of-contract claims against Scottsdale and Regions. Scottsdale filed an amended and substituted answer to appellee's second amended petition on July 9, 2010.

On June 8, 2010, appellee moved for summary judgment. Scottsdale filed a response to appellee's motion for summary judgment on August 13, 2010. The circuit court conducted a hearing on the motion on October 1, 2010. On April 6, 2011, the court granted partial summary judgment to appellee on the duty-to-defend claim. In granting partial summary judgment in favor of appellee, the circuit court, citing to Crisler v. Unum Insurance Company of America, 366 Ark. 130, 233 S.W.3d 658 (2006), found "that Arkansas has the 'most significant relationship' to the issues at hand; therefore, Arkansas law governs the insurance contract entered into by the parties." Relying on Anderson Gas & Propane, Inc. v. Westport Insurance Corporation, 84 Ark. App. 310, 318, 140 S.W.3d 504, 509 (2004), the court also found that the meaning of the phrase "pollution exclusion" was fairly susceptible to more than one reasonable interpretation and, thus, is ambiguous' under Arkansas law." The court stated that the duty to defend, therefore, arose because a possibility of coverage existed due to the ambiguity in the policy concerning whether the "pollution exclusion" covered the activities claimed in the underlying lawsuit. Thus, the court concluded that there was no genuine issue of material fact as to whether Scottsdale had a duty to defend the underlying suit on behalf of appellee because the pollution exclusion was ambiguous under Arkansas law. The court denied appellee's motion for summary judgment on the claims that Scottsdale had