In Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189 (CPS), a security firm sued the insurance company that provided its comprehensive general liability policy, claiming the insurer breached its duty to defend and indemnify against a setoff claim. The setoff claim was asserted as an affirmative defense in a lawsuit the security firm brought against one of its customers for unpaid services. The customer alleged that the security firm was legally responsible for fire damages that occurred at its construction site and, thus, it was entitled to setoff the fire damages against the amounts owed for security services. (Id. at p. 193.) In CPS, the trial court sustained the insurance company's demurrer without leave to amend based upon its conclusion that a liability insurer's duty to defend does not extend to affirmative defenses raised in response to a lawsuit initiated by the insured. (CPS, supra, 29 Cal.4th at p. 194.) The California Supreme Court held that "the Court of Appeal was correct to reverse the trial court's order sustaining the demurrer." (Id. at p. 198.) The Supreme Court concluded that, despite the omission of a copy of the insurance policy from the complaint, the allegations were sufficient to allege that the setoff claim fell within the scope of the contractual obligation to defend against suits seeking damages. (Id. at p. 199.) The Supreme Court left open the question whether the duty would extend to the setoff claim once the precise language of the policy was known. (Ibid.) In Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) the issue was whether a CGL policy that obligates an insurer to defend and indemnify its insured against suits seeking damages thereby obligates the insurer to defend and indemnify the insured against a setoff claim asserted under Code of Civil Procedure section 431.70 (section 431.70); defendant in a suit for money may assert an otherwise time-barred cross-demand for money as an affirmative defense. ( CPS, at p. 192.) Because of the procedural posture of that case--an appeal from the sustaining of a demurrer--the court in CPS did not resolve the issue. Observing that, for accounting purposes, a monetary recovery on a suit for damages was no different than a setoff against another debt, the court expressly declined to answer whether a setoff claim should therefore be treated as a suit for damages. Instead, it held that "CPS's complaint adequately stated a prima facie right to relief ... . In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language. ... CPS's complaint satisfactorily alleged (1) that the insurance policy obligated the insurer to defend and indemnify CPS against suits seeking damages, and (2) that under the terms of the policy, the contractor's setoff claim fell within the scope of that contractual obligation. Whether CPS can prove these allegations (that is, whether its interpretation of the applicable contractual language is correct in light of what we have said here) remains to be seen, but the allegations are sufficient to establish a prima facie right to relief. The insurer may move for judgment on the pleadings or summary judgment, raising the same arguments it raised in its demurrer, and in support of its motion it may provide the court with a copy of the insurance policy in question." ( Id. at pp. 198-199.) In CPS, the insured was hired by a general contractor to provide security services at a construction site. During the course of construction, a fire broke out at the site, which caused damage to the contractor's work. When the contractor refused to pay CPS for its services, CPS brought suit against the contractor. The contractor asserted as an affirmative defense that CPS was responsible for the damages arising out of the fire and that the contractor was therefore entitled to set off the fire damages against any amount it owed CPS. CPS tendered defense of the setoff claim to its insurer, which refused the tender. After resolving the dispute with the contractor, CPS brought suit against its insurer for breach of contract and of the covenant of good faith and fair dealing. The trial court sustained the insurer's demurrer to the complaint, reasoning that an insurer does not have a duty to defend against affirmative defenses raised in response to an insured's complaint against another party. The court of appeal reversed. The Supreme Court affirmed the judgment of the court of appeal, but for different reasons. ( CPS, supra, 29 Cal.4th at pp. 193-194.) The California Supreme Court expressed its agreement with the proposition that "in an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language." (Id. at pp. 198-199.) The court further stated that "though the complaint could have been clearer, it satisfactorily alleged (1) that the insurance policy obligated the insurer to defend and indemnify the plaintiff against suits seeking damages, and (2) that under the terms of the policy, a third party's setoff claim fell within the scope of that contractual obligation. Whether the plaintiff can prove these allegations . . . remains to be seen, but the allegations are sufficient to establish a prima facie right to relief." (Ibid.)