In a brief decision analyzing Oregon law, the Ninth Circuit determined that once an insurer breaches its duty to defend, it must indemnify. See Desrosiers v. Hudson Speciality Ins. Co., 2011 U.S. App. LEXIS 12591 (9th CIr. June 21, 2011).

   The victim secured a judgment against the insured after he was beaten by another patron outside the insured's bar. Hudson Speciality Insurance refused to defend the insured, claiming the injury arose from an assault and battery, which excluded coverage. The personal injury suit settled and the insured bar assigned its claim to the victim. When the victim sued the insurer, the district court granted summary judgment to Hudson, concluding there was neither a duty to defend nor a duty to indemnify the insured bar.

   The Ninth Circuit reversed. Hudson had a duty to defend because the underlying complaint alleged alternative theories. First, the victim's injuries were caused by the negligence of both the patron and the bar. Second, the patron intentionally attacked the victim. Merely because the complaint described the incident as an "assault" was not determinative. The negligence allegations triggered Hudson's duty to defend.

   Hudson conceded that once an insurer breached its duty to defend, it could not later argue it had no duty to indemnify.