In March of this year, we noted that whether an insurer can seek reimbursement of defense costs paid, where it is later determined there was no duty to defend, is an open issue in Washington. While the issue has still not been addressed by the Washington Supreme Court, in National Surety Corp. v. Immunex, 2011 Wash.App. Lexis 1695 (2011), Division I of the Court of Appeals held that where an insurer defends under a reservation of rights, and even reserves the right to seek reimbursement of defense costs in the event a court decides there is no duty to defend, the insurer is still responsible for defense costs incurred up to the time the court rules there is no duty to defend. There is no right to reimbursement absent a provision in the insurance policy that allows such reimbursement.
Many have debated whether the following language from Kirk v. M
