Under Massachusetts law, an insurance company's duty to defend is broad and encompasses the prosecution of a policyholder's counterclaims. UP reminded the court that the rule in Massachusetts is "in for one, in for all." By including counterclaims that are "inextricably intertwined" which the litigation for which the defense is sought, policyholders may be able to minimize or eliminate liability. UP reminded the court that the Massachusetts Rules of Civil Procedure specify certain compulsory counterclaims, including the ones here for which insurance is sought, so it is logical that they fall within the broad duty to defend. Further, liability insurance policy language, like the language at issue in this case, contemplates the prosecution of compulsory counterclaims. Finally, UP urged the court to find a right to independent counsel in scenarios where the insurance company may have an incentive to devalue or impair a policyholder's counterclaim.
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