LexisNexis® Legal Newsroom
Insurer's Suit Against Insured's Defense Counsel Barred by Insured's Settlement

By William T. Barker, Partner, SNR Denton In American National Property & Casualty Co. v. Ensz & Jester, P.C., American National sued the defense counsel it had retained to defend its insured for malpractice. Allegedly that malpractice resulted in an excess judgment and a bad faith claim that...

New Appleman Insurance Bad Faith Litigation, Second Edition - § 3.06: Duties of Insurer-Selected Defense Counsel in Partial Coverage or Excess Exposure Cases, and § 3.07: Insurer Liability for Improper Defense

New Appleman Insurance Bad Faith Litigation, Second Edition is a one-volume law and practice guide that discusses the duties and obligations of insurers to their insureds, and the consequences of the insurer's breach of its duty of good faith and fair dealing. It discusses both first party and third...

Treatment of Insurance Proceeds and the Stafford Act’s Public Assistance Grant Program

By Brent W. Huber and Susan Charles, Partners, Ice Miller LLP In their article appearing in the November/December 2011 issue of Coverage , "Treatment of Insurance Proceeds and the Stafford Act's Public Assistance Grant Program," Brent W. Huber and Susan Charles of Ice Miller LLP, observe...

SNR Denton on DeMarco v. Travelers Insurance Co.: Insurer Faced with Multiple Claims Exceeding Policy Limits Must Seek to Minimize Insured’s Financial Exposure

By William T. Barker, Partner, SNR Denton DeMarco v. Travelers Insurance Co. applied Rhode Island's unique standard for an insurer's duty to settle to multiple claims exceeding limits. In doing so, it adopted the minority rule that such an insurer must seek to minimize insured's financial...

Duty to Settle Requires a Willing Plaintiff – No “Bad Faith” Failure to Settle

By Barry Zalma, Attorney and Consultant In March I posted an article on the need to put a stake through the heart of the tort of bad faith . The post that follows deals with a case that supports the position I took in that post and makes me wonder why more courts don't recognize the inequity...

Perkins Coie LLP on Second Circuit Decision Not Precluding Excess Insurance When Settlement Is Below Policy Limits

The commentary "Perkins Coie LLP on Second Circuit Requires Payment of Underlying Losses to Trigger Excess Coverage Based on Policy Provisions," by Les Brown and Norton Cutler, analyzes the much discussed recent decision of Ali v. Fed. Ins. Co ., 2013 U.S. App. LEXIS 11384 (2d Cir. June 4,...

California Court Holds § 998 Offer Exceeding Policy Limits Made In Good Faith

In its recent decision in Aguilar v. Gostischef , 2013 Cal.App. LEXIS 816 (Cal. App. 2d Dist. Oct. 11, 2013) [ enhanced version available to lexis.com subscribers ], a California appellate court had occasion to consider whether a claimant’s statutory settlement offer under California Code of Civil...

Settlements With Underlying Layers Satisfy Exhaustion Conditions in Excess Policies

In his commentary, "Settlements With Underlying Layers Satisfy Exhaustion Conditions in Excess Policies," Michael T. Sharkey of Perkins Coie LLP analyzes the recent decision of Quellos Group LLC v. Federal Insurance Co. , No. 68478-7-1, 2013 Wash. App. LEXIS 2626 (Nov. 12, 2013) [ enhanced...

Separating Fact From Fiction: Strategies For Contesting The Excess Consent Judgment

By Brian Webb I. Introduction Few legal maneuvers generate greater skepticism–among courts and insurers–than the excess consent judgment, an increasingly common settlement device used in liability cases. An excess consent judgment is a type of judgment entered by agreement between...

Washington Appellate Court Enforces Strict Exhaustion Language in Excess Directors and Officers Liability Policies

By Leslie S. Ahari and Gabriela A. Richeimer The State of Washington has joined the growing list of jurisdictions that have enforced strict exhaustion language in an excess policy’s insuring agreement in favor of the excess carrier in situations where the insured has settled with the underlying...

Ten Most Significant Insurance Coverage Decisions Of 2013 – Alaska Supreme Court: Demand To Settle For Limits, But Not For All Insureds, Insurer Between A Rock And A Hard Case

It is the proverbial “damned if you do and damned if you don’t” situation for insurers. An insurer is presented with a policy limits demand to settle for one insured – and it should be accepted based on liability and damages considerations -- but the settlement offered will not...

Ten Most Significant Insurance Coverage Decisions Of 2013 – California Appeals Court: No Bad Faith For Insurer’s Failure To Attempt To Settle When There Is No Demand

Talk of bad faith among coverage folks often centers around whether an insurer’s interpretation of a policy could constitute bad faith. However, given how high the burden is for an insured to prove bad faith, it is usually very difficult to do so. Even if the insurer were wrong, even really wrong...

Prejudgment Interest: It’s Not Discretionary! Insurers Should Pay Up

By Jill Berkeley , Partner, Neal, Gerber & Eisenberg LLP Who has not heard in the first round of mediation, insurers say, “prejudgment interest and extracontractual damages are off the table.” That’s just wrong. In the last three months alone, policyholders have won prejudgment...

Excess Carrier Could Not Seek Reimbursement from the Primary Insurer Based On Its Rejection of a Claimant’s Settlement Offer Within Its Primary Limits Because There Was Not a Final Excess Judgment

In RSUI Indemnity Co. v. Discover P&C Insurance Co [ enhanced version available to lexis.com subscribers ], the primary insurer issued the insured a commercial automobile liability policy with a $1 million limit per-occurrence and in the aggregate, while an excess insurer issued the insured a policy...

Another Item For Your Checklist: The Bad Faith Concerns Related To Overreaching Proposed Releases

By David A. Mercer A common scenario: claimant's counsel issues a time limit demand for policy limits and the insurer decides to accept the demand and tender the limits. Once the decision is made to accept the demand, the insurer should go through its checklist of concerns to make sure that each...

Insured Entitled To Independent Counsel Even When Being Defended WITHOUT A Reservation Of Rights (Court Rejects ALI Draft Principle)

When it comes to an insured’s right to retain independent counsel, when being defended by its insurer under a reservation of rights, there are some general rules of the road. In a few states a defense provided under a reservation of rights automatically entitles the insured to independent counsel...

"Non-Trivial Probability" of Excess Judgment Obligates Insurer to Pay for Independent Defense Counsel

The court in Perma-Pipe, Inc. v. Liberty Surplus Insurance Corporation , Case No. 13 C 2989, 2014 U.S. Dist. LEXIS 54867 (N.D. Ill. April 21, 2014), [ enhanced version available to lexis.com subscribers ], held that a CGL insurer breached its duty to defend by refusing to pay for independent defense...

Dentons on Taylor v. Allstate Insurance Co.: When Is a Texas Liability Insurer Liable for Inadequate Defense of a Case?

In Taylor v. Allstate Insurance Co.,[1] a Texas court of appeals held that the only common-law tort causes of action available against a liability insurer for allegedly inadequate defense of its insured are breach of contract and a Stowers[2] (failure to settle) claim, but that a contract claim might...

Wall Of Confusion: GEICO General Insurance Company v. Bottini And Its Ill-Begotten Progeny

By Julius F. "Rick" Parker III A three-judge panel of Florida's Second District Court of Appeal has released what, on its face, appears to be a relatively innocuous opinion in Geico General Insurance Company v. Bottini.1 The Bottini appeal arose as a result of Geico's appeal of a...

Insurer’s Duty to Defend Did Not Arise until Insurer Was Provided with All Necessary Information to Determine the Existence of Coverage

Carrier’s Right to Control the Defense Includes the Right to Appoint Counsel of Its Choosing and to Settle Claims without the Participation of the Insured Travelers Prop. Cas. Co. of Am. v. Kaufman & Broad Monterey Bay, Inc ., 2015 U.S. Dist. LEXIS 16952 (N.D. Cal. Feb. 11, 2015) [subscribers...

What Could Have Been: Court Holds That Policy With Eroding Limits Does Not Violate Public Policy

Westport Insurance Company v. Mylonas, No. 14-5760 (E.D. Pa. July 15, 2015), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ], is one of those cases involving a very interesting issue -- but that will likely go by the wayside with nary a peep ever to heard from...

Federal Court Refuses to Confuse Issue of Insurance Limits – Declaratory Relief Action Without Insured Fails

Insurance coverage disputes can be resolved by the seeking a court’s order in a declaratory relief action. Both state and federal courts have procedures available for resolving such disputes. However, to provide a useful declaration it is necessary that both parties to the insurance contract are...

Mississippi Court Holds Defense Costs Outside of Limits

In its recent decision in Federal Ins. Co. v. Singing River Health System , 2015 U.S. Dist. LEXIS 134814 (S.D. Miss. October 2, 2015), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ], the United States District Court for the Southern District of Mississippi issued...

Insurer Between a Rock and a Hard Case: Limits Demand That Does Not Release All Insureds

It is the proverbial “damned if you do and damned if you don’t” situation for insurers. An insurer is presented with a policy limits demand to settle for one insured – and it should be accepted based on liability and damages considerations -- but the settlement offered will not...

Insured Not Required to Plead Existence of a Within-Limits Settlement Demand in Order to State a Claim for Bad Faith Failure to Settle

In Aspen Specialty Ins. Co. v. Willis Allen Real Estate , the district court denied a liability carrier’s motion to dismiss an insured’s bad faith claim for failure to effectuate a settlement within policy limits despite the fact that the complaint failed to allege a within-limits demand...