New York's highest court recently held oral argument in one of the most closely-watched cases to come out of New York in some time. The case, K2 Investment Group, LLC v. American Guarantee & Liability Insurance Co., resulted in a prior June 2013 ruling by the New York Court of Appeals that garnered significant attention nationwide. In the 2013 ruling, the court held that "when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him." K2 Inv. Grp. LLC v. Am. Guarantee & Liab. Ins. Co., 21 N.Y.3d 384, 387 (N.Y. 2013).
In an unusual move, the Court of Appeals subsequently granted the insurer's petition for rehearing, and oral argument was held on January 7, 2014. While it is impossible to tell how the court ultimately will rule, the transcript is an interesting read and includes enough material to buoy the hopes of those on both sides of the debate.
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