California, United States of America
The following excerpt is from Foster-Gardner, Inc. v. National Union Fire Ins. Co., 18 Cal.4th 857, 77 Cal.Rptr.2d 107, 959 P.2d 265 (Cal. 1998):
Finally, Foster-Gardner relies on Taranow v. Brokstein (1982) 135 Cal.App.3d 662, 185 Cal.Rptr. 532, in which the court held that the word "suit" included arbitration proceedings. In Taranow, however, the partnership contract at issue required all controversies and claims arising out of the agreement to be arbitrated. (Id. at p. 664, 185 Cal.Rptr. 532.) It also provided for attorney fees " '[s]hould any partner be forced to bring suit to enforce the terms of this partnership agreement.' " (Ibid.) The court therefore reasonably concluded that for the attorney fee provision to have any effect, the term "suit" would have to be interpreted to include arbitration proceedings. (Id. at pp. 667-668, 185 Cal.Rptr. 532.) That is not the situation here. Interpreting "suit" to include only actions commenced by the filing of a complaint does not render the insurer's promise to defend meaningless. Moreover, post-1985 policies generally include arbitration proceedings in the definition of "suit." (See ante, fn. 3.)
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