Although the duty to defend is broader than the duty to indemnify, it "is not the duty to commit hari kari" and limitations exist as to the extent of the duty in all phases of a lawsuit, including appeals.  West Haven v. Commercial Union Ins., 894 F.2d 540, 544-45 (D.Conn 1990) (citations omitted).  The duty to defend is said to last "until the state of proceedings is reached when it is clear that no element of the subject matter of the suit is within the scope of the policy."  Id. at 545 (citations and internal quotations omitted); see also Leo Martinez, New Applemen Insurance Law Practice Guide § 11A.28 (2010) (stating generally "an insurer's duty to defend continues until it is determined that there is no liability coverage.") 

Courts differ, however, as to where the line is drawn extinguishing the duty to defend.  In West Haven, the court extended the duty to defend to the appellate process, but not without limitation.  Where reasonable grounds for an appeal exist, the duty to defend ordinarily continues through prosecution of the appeal.  West Haven, 894 F.2d at 545.  The court, considering a disputed limitations period and the reopening of prior judgments, determined that the insurer's duty was limited in scope to an appeal originating from the original award.  Id. at 546 (finding "the insurer is under no duty to defend subsequent collateral attacks on the judgment that might render it newly liable on the policy.")  The court reasoned that the insurer is only bound by the duty where the pending appeal, "raises issues invoking liability under an insurance policy."  Id. at 545-46; see also Sachs v. St. Paul Fire & Marine Ins. Co., 303 F. Supp. 1339, 1341 (D.D.C. 1969) (finding the duty to defend "lasts until a state of the proceedings is reached at which it is clear that no element of the subject matter of the suit is within the scope of the policy"); Leo Martinez, supra, § 11A.28 ("In situations involving an adverse judgment against the insured, a majority of courts hold that the duty to defend includes the duty to prosecute an appeal from the judgment where there are reasonable grounds for appeal.")

Conversely, the insurer's duty has been held to terminate where claims for money damages have reached a final judgment, but claims demanding equitable relief, and therefore non-covered claims, remain in controversy.  Compare Reller v. Hartford Ins. Co., 765 So.2d 87, 88 (Fla. Dist. Ct. App. 2000) (finding the insurer, having obtained full satisfaction of the only covered claim, no longer had a duty to defend); with Lockwood Int'l, B.V. v. Volm Bag Co., 273 F.3d 741, 745 (7th Cir. Wis. 2001) (holding an insurer may not, in good faith, enter into a settlement requiring that the injured party convert some of the covered claims to non-covered claims to avoid the insurer's duty to defend.)   

In Conway Chevrolet- Buick, Inc. v. Travelers Indemnity Co., 136 F.3d 210, 214 (1st Cir. 1998), the insurer initially provided a defense to the insured in an action that was mixed with arguably covered claims and non-covered claims.  When the trial court dismissed all covered claims by grant of summary judgment, the insurer revoked its defense.  Id.  The insurer's withdrawal was upheld, because, "the court's grant of partial summary judgment . . . left no basis for coverage."  Id.

In contrast, other jurisdictions have found the duty to defend survives until all possibility of appeal as to the covered claims has been extinguished.   Meadowbrook v. Tower Ins. Co., 559 N.W.2d 411, 416 (Minn. 1997).  In Meadowbrook, the court held "that an insurer who undertakes an insured's defense under a reservation of rights can withdraw its defense once all arguably covered claims have been dismissed with finality."  The duty to defend was found to continue until there existed, as a matter of law, "no basis on which the insurer may be obligated to indemnify the insured."  Id.  The duty was not extinguished by the dismissal of some claims, including all claims arguably covered under the policy, because the plaintiffs were not permitted to appeal the decision until the remaining non-covered claims were adjudicated.  Id. at 416-17.  The court, adopting a hard line approach, held the "insurer cannot withdraw from a defense until its duty to defend all arguably covered claims has been completely extinguished – in other words, when no further rights to appeal those arguably covered claims exists."  Id. at 417 (finding the duty terminated upon a settlement of all arguably covered claims where the plaintiff no longer retained the right to appeal those claims).

As a result of the procedural and fact specific nature of the duty to defend, the scope within the context of appeals must be carefully analyzed on a case-by-case basis.  If the possibility of an appeal exists in an action mixed with arguably covered and uncovered claims, it must be determined whether, under the specific circumstances, a continuing duty to defend exists.