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The case of P.J.P. Mechanical Corp. v. Commerce and Industry Ins. Co.,—N.Y.S.2d—, 2009 WL 1687773 (1st Dept., June 18, 2009), presents a controversial issue of first impression in New York. It addresses the question “does an insurer have a duty either to fund or to reimburse for separate litigation commenced by its insured, where the responsive pleadings raise an affirmative defense based on a claim of offset?” The First Department affirmed the decision of Judge Karla Moskowitz that no such duty exists.

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