"Stay Cool" Response Does Not Reject Carrier's Proposed Defense Arrangement

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In Endurance American Specialty Co. v. Lance-Kashian & Co., 2011 WL 5417103 (E.D.Cal. Nov. 8, 2011), the District Court held that an insurer properly allocated defense costs and set reasonable defense counsel rates.

Endurance American Specialty Company issued a "Professional, Management, Employment Practices, and Fiduciary Liability Insurance Policy" to Lance-Kashian & Company. In an underlying action, Lance-Kashian, its directors and officers, and Lance-Kashian's sister company, River Rock Properties III (RRP III), were sued by Gottschalks Inc. Gottschalks essentially alleged that the defendants had "wrongfully interfered with Gottschalks' efforts to assign its limited partnership and leasehold interests[,]" among other things. The insureds tendered the underlying action to Endurance for a defense and indemnity and requested Endurance's permission to use Cozen O'Connor to defend the suit. RRP III was not an insured under the Endurance policy.

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