Insurer's General Reservation of Rights Does Not Entitle Insured to Cumis Counsel

Posted in: Commercial General Liability Insurance, Directors & Officers Insurance, Duty to Defend, Policy Interpretation, Property & Casualty Insurance September 05, 2013

In a recent ruling, the California Court of Appeal held that an insurer’s general reservation of rights to deny coverage of damages outside its policy does not create a conflict of interest with the insured, such that the insured in entitled to Cumis counsel.  The decision in Federal Insurance Co. v. MBL, Inc. __ Cal. App. 4th __,  2013 Cal. App. LEXIS 679, 2013 WL 4506149 (August 26, 2013) follows California precedent denying insureds the right to select independent counsel at the insurer’s expense absent an actual conflict of interest.

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Ninth Circuit Affirms Use of Genuine Dispute Doctrine in D&O Coverage Cases

Posted in: Case Updates, Directors & Officers Insurance, Insurance Bad Faith, News January 14, 2010

The genuine dispute doctrine has received much attention recently by the California courts.  Although the doctrine first arose in the Ninth Circuit Court of Appeals, there has not been much recent activity by the Ninth Circuit or the federal district courts located in California relative to this doctrine.  The Ninth Circuit jumped backed in the frey with its decision in  S.J. Amoroso Const. Co., Inc. v. Executive Risk Indem., Inc., 325 Fed. Appx. 548, 2009 WL 1154202 (9th Cir. 2009).  In S.J. Amoroso Const. Co., the Ninth Circuit upheld a district court decision dismissing a claim of bad faith against an insurer for denying coverage under a Directors & Officers insurance policy (“D&O policy”). Paul Mason was an officer of S.J. Amoroso Construction Company (“Amoroso”) and a covered individual under the D&O Policy issued by Executive Risk Indemnity Inc. (“Executive Risk”).  Mason entered into a construction contract with Mauna Kea Properties, who later alleged negligent or intentional misrepresentation in connection with that contract.  Litigation eventually ensued between the parties and a claim was made under the D&O policy.  Executive Risk argued that Amoroso was not entitled to coverage under the D&O policy because coverage was excluded for claims arising from a contract or written agreement.  Executive…

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