In Amato v. Mercury Casualty Co. (1993) 18 Cal.App.4th 1784, the policyholder was sued by his mother-in-law for injuries arising out of an auto accident in which the policyholder was driving and the mother-in-law was a passenger. Application of a certain exclusion depended on whether the policyholder resided with his mother-in-law. The Amato court noted the insurance company "possessed information which, if true, indicated that he was residing at locations other than the home of" his mother-in-law. (Id. at p. 1789.) Despite that knowledge, the insurance company refused to defend or, after a default judgment against the policyholder, indemnify. As it turned out, though, in a subsequent bad faith action, the jury found that the policyholder did, indeed, live with his mother-in-law. (Ibid.) That fact, however, did not exonerate the insurance company. At the time of the coverage decision, the insurance company had facts in its possession, albeit extrinsic to the mother-in-law's complaint against the policyholder, which created a potential that the exclusion did not apply, ergo there was a potential for indemnification, ergo there was definitely a duty to defend. It made no difference that a jury ultimately found that those extrinsic facts were ultimately disproven at trial.