Illusion Hair Designers, Inc. v. Commercial Union Insurance

— Order, Supreme Court, New York County (Harold Baer, Jr., J.), entered on or about November 25, 1990, which, insofar as appealed from, granted plaintiff’s cross motion for summary judgment, and referred the issue of legal fees to a Referee to hear and report, unanimously affirmed, with costs.

When an insurer brings a declaratory judgment action to determine its duty to defend and indemnify which is unsuccessful, it must pay the insured for the defense of both the underlying action and the declaratory judgment action (Colon v Aetna Life & Cas. Ins. Co., 66 NY2d 6). Furthermore, since a judgment has yet to be entered in this action, defendant has not been prejudiced by any of the proceedings, and the order should therefore stand. Concur — Rosenberger, J. P., Ellerin, Wallach, Smith and Rubin, JJ.