Defendant insurance company appeals from an order granting partial summary judgment to plaintiff policy holder finding a duty to defend and indemnify. The trial court found that defendant had unreasonably withheld consent to settle in the underlying actions and was precluded by the Supreme Court's holding in Fireman's Fund Insurance Co. v. Security Ins. Co. of Hartford, 72 N.J 63 (1976), from declining coverage pursuant to the policy's capacity exclusion.
The court first concluded that on the undisputed facts in the record, defendant's conduct was not unreasonable, and that the facts were distinguishable from Fireman's Fund. After engaging in de novo review of the record, including the policy, the court concluded the capacity exclusion applied to bar coverage.