We hope you, your families and friends are safe from the fires raging in various northern San Francisco Bay counties right now. The devastation can feel overwhelming to those who are personally affected by the fires. We want you to know that we’re thinking of you and our community during this difficult time. We’ll post again later in the week as the situation develops and when those affected are able to begin thinking about recovery.
On May 5, the California Supreme Court will hear argument in a case that has the potential to profoundly change the relationship between the insurer, its insured and the insured’s independent defense counsel under Civil Code section 2860. The case is Hartford Casualty Insurance Company v. J.R. Marketing, LLC, Case No. S211645. If Hartford convinces the Supreme Court to reverse the dismissal of its case, independent defense counsel may be exposed to claims for reimbursement of defense costs they’ve been paid by their client’s insurers. This would be a very unfortunate outcome, both for law firms and Section 2860’s independent counsel regime.
In J.R. Marketing, Hartford refused to defend its insureds against several lawsuits. The insureds hired their own defense counsel and sued Hartford for breaching its duty to defend. Hartford then agreed to defend, albeit partially, and continued to insist that certain defense costs were not covered and that it was not required to provide independent counsel under Section 2860. The court ruled that Hartford was wrong on both scores and indicated that, after the underlying litigation concluded, Hartford could seek reimbursement of any defense costs it paid that it believed were solely attributable to uncovered claims or parties. Helpful to insureds, the trial court and Court of Appeal added to a growing line of cases holding that an insurer, after having breached its duty to defend, is not entitled to the billing rate limitations of Section 2860.
After paying $15 million in defense costs through the conclusion of the underlying litigation, Hartford sued for reimbursement. And Hartford took a very unusual step. In addition to suing the insured, Hartford also sued its insured’s defense counsel for reimbursement, alleging a novel quasi-contractual theory. According to Hartford, the law firm that the insured hired (after Hartford initially refused to defend) was unjustly enriched by Hartford’s court-ordered defense cost payments relating to uncovered claims, so the law firm naturally should pay it back.
Mary McCutcheon, a partner at Farella Braun + Martel LLP, was selected to be a founding member of the Board of Regents of the American College of Coverage and Extracontractual Counsel. The newly formed organization was created by leading lawyers in the U.S. and Canada to improve the quality of the practice of insurance law.
We’re thrilled to announce that the Policyholder Perspective blog was selected as one of the Top Insurance Blogs for 2011 by the LexisNexis Insurance Law Community (ILC). Here’s a link to the announcement. Thank you to our readers, the LexisNexis staff and its Insurance Law Community Advisory Board.
The blog team at Farella is delighted to announced that the Policyholder Perspective blog has been included in the initial list of nominees for the LexisNexis Insurance Law Community’s Top 50 Insurance Blogs for 2011 campaign. The Policyholder Perspective blog is dedicated to providing comments and insights on issues of importance to anyone interested in commercial insurance coverage. We hope that you will support our efforts to be interesting and informative by voting now. The ILC is accepting votes and comments now through September 30, 2011. Click here to add a comment about the Policyholder Perspective blog.
We are pleased to report that the LexisNexis Insurance Law Community has ranked our Policyholder Perspective blog as one of the Top 50 Insurance Blogs for 2009. Click here to view the article.
We hope that you will continue active involvement in our community of readers and commentators.
Thanks for your readership.
Farella Braun + Martel Insurance Coverage Group
The blog team at Farella is delighted to announced that the Policyholder Perspective blog has been included in the initial list of nominees for the LexisNexis Insurance Law Center’s Top 50 Insurance Blogs for 2009 campaign. The Policyholder Perspective blog is dedicated to providing comments and insights on issues of importance to anyone interested in commercial insurance coverage. We hope that you will support our efforts to be interesting and informative by voting now. The ILC is accepting input on the nominees now through June 30, 2010. Click here to add a comment about the Policyholder Perspective blog.
Farella Braun + Martel’s Insurance Coverage Group was recognized among the best in California in the 2010 edition of Chambers USA.
According to Chambers USA, Farella’s insurance coverage group “represents policyholders in a wide variety of coverage disputes including corporate D&O and E&O claims, construction delay and defects claims, environmental and products liability litigation and securities fraud.” Sources said “The lawyers are very helpful and quickly get to grips with clients' needs.” William Friedrich was noted for having “made a name for himself in multi-party, complex civil litigation work.” Mary McCutcheon was described as “a very good counselor: thoughtful, balanced, and a strong advocate for her clients.”
Chambers USA ranks both law firms and attorneys. Qualities on which the rankings are assessed include technical legal ability, professional conduct, client service, commercial awareness/astuteness, diligence, commitment, and other qualities most valued by the client. The rankings are derived from surveys and interviews with in-house counsel.
Other practices receiving Chambers USA rankings were the firm’s Construction, Environmental, Commercial Litigation, Food & Beverages (Alcohol) and White Collar Crime & Government Investigations practices. For the complete 2010 Chambers USA listing of Farella Braun + Martel practices and attorneys, please visit the Chambers & Partners website.
Policyholder Perspective is very pleased to report that Tyler Gerking, one of our frequent contributors and a valued member of Farella Braun + Martel's Insurance Coverage Practice Group was elevated to partner at Farella January 1, 2010. (Click here to see the full announcement.) Tyler has been involved in a number of high profile D&O liability claims including the Broadcom derivative litigation and various other stock option backdating cases, as well as claims under CGL, professional liability, technology E&O and first-party property policies. He has also handled claims and other issues in connection with insurer insolvencies.
Tyler will continue to be a regular contributor to Policyholder Perspective, including upcoming pieces on D&O coverage and updates on global warming issues.
Welcome! This is the first post of our blog on insurance issues. This blog is dedicated to providing comments and insights on issues of importance to anyone interested in commercial insurance coverage. Our firm represents policyholders and claimants in insurance coverage disputes with insurers, and we will look at the issues from that perspective. We won’t claim to be neutral in that respect, but we hope that everyone — policyholders, risk management professionals, and insurer-side counsel alike—will find our take on these issues to be interesting and informative.
I’m John Green and I have been representing policyholders in insurance disputes for over 20 years. I am joined in writing this blog by Erica Villanueva and Tyler Gerking, who practice with me in our firm’s Insurance Practice Group.
There has been a steady stream of insurance cases decided lately both in California and across the country. Some of these cases are surprising decisions and troubling from the policyholder perspective. In upcoming posts, we will talk briefly about some of these cases, and some practical ideas about how to deal with them. We don’t intend this blog to be a stuffy “Reported Decisions” compilation– we want to alert you in a brief and accessible way to new cases, to practical problems we all encounter, and to industry developments and provide practical guidance on the issues you are grappling with on a daily basis, just as we are.