Reservation of Rights

News & Analysis as of

Submitting Your Defense Bills to Insurers Could Mean Waiving Privilege

Recently, the California Court of Appeal decided County of Los Angeles Board of Supervisors v. Superior Court, 235 Cal. App. 4th 1154 (2015), a case considering whether the Los Angeles County Sheriff's Department could be...more

Conclusory Allegations Held Insufficient to Support Declaratory Relief on Right to Independent Counsel or Allocation of Defense...

In Centex Homes v. St. Paul Fire & Marine Ins. Co. (No. E060057, filed 5/22/15), a California Court of Appeal held that a developer’s declaratory relief lawsuit seeking a declaration of the right to independent counsel was...more

Insurer Declaratory Action: To Stay or Not to Stay?

This month’s edition of For the Defense magazine focuses on insurance law. That makes sense. It is difficult to do much defending without bumping against insurance issues. Our torts professor constantly emphasized the...more

Is That Covered? Reservation of Rights

If a policyholder is sued, she can tender the defense of that suit to her insurance company. If the insurance company believes that there may not be coverage, but cannot make a clear determination based upon the complaint...more

Sorry, But Your Reservation Has Been Cancelled: How an Insurance Company’s Failure To Give Proper Notice of Its Reservation of...

Most courts hold that an insurance company will not be estopped from denying coverage, even if the insurance company participates in the defense, provided it gives timely notice to the policyholder through a reservation of...more

Real Property, Financial Services & Title Insurance Update: Week Ending April 3, 2015

REAL PROPERTY UPDATE - Judgment: amount awarded in judgment of foreclosure must be supported by competent evidence and lender not entitled to award of interest or fees when only statement in evidence reflected...more

A mere reservation or rights by an insurer does not require the insurer to supply independent counsel to its insured

A bill recently introduced in the Illinois State Senate known as the Insureds Independent Counsel Act, while, if enacted, will only apply in that State, is instructive as to when an insurance company must supply independent...more

Insurance Recovery Law - March 2015

New York Federal Court Rejects Insurer’s Request for Recoupment - Why it matters: The federal court, applying New York law, held that an energy drink manufacturer’s advertising coverage claim—arising from underlying...more

A Delayed Defense is a Waiver of Civil Code Section 2860

When presented with a lawsuit potentially seeking covered damages, a liability insurer owes a duty to defend and is faced with three options:1) tender the defense unconditionally and therefore control the defense, including...more

Court Confirms Insurer Permitted to Choose Counsel in Discharging Duty to Defend

An insurer’s duty to defend and how that duty gets discharged may be one of the most frequently litigated coverage issues. Although typical policies afford insurers the right to control their insureds’ defense, insureds...more

Insurance Recovery Law -- January 2015

Insured v. Insured Exclusion Ambiguous When Applied to FDIC, 11th Circuit Rules - Why it matters: In the continuing split among courts considering insured v. insured exclusions, the Eleventh U.S. Circuit Court...more

“Equal Consideration" Does Not Require Overpayment

In Arizona, options are available to insureds when an insurer does not unconditionally agree to defend without issuing a reservation of rights letter, or denies coverage altogether. These circumstances give rise to Morris and...more

Recent Decisions Reinforce the Value of Quality over Quantity in a Reservation of Rights Letter

In two recent cases, Advantage Builders & Exteriors v. Mid-Continent Casualty Co. No. WD 76880 (Mo. Ct. App. Sept. 2, 2014) and EAN Services, LLC v. Brunson, No. 2-14-118 (Ill. Ct. App. September 8, 2014), the courts remind...more

IBM Corp. v. United States—A Study in the Risks and Rewards of Including a Reservation of Rights in an Offer

Including a reservation of rights in a proposal is a delicate matter. On the one hand, it is in the contractor’s best interest to identify clearly the assumptions on which its proposal is based....more

Delay Strikes Down Another Plaintiff

Why am I always reporting on plaintiffs who wait too long to file their lawsuit? In the latest Texas case, Trahan v. Mettlen, the Trahans sued in 2010 on a 2006 warranty deed....more

Is that Covered? Reservation of Rights Letter

If your client is sued, one immediate task is to determine if there is insurance coverage for the claim(s). If you submit the claim to an insurance company, Pennsylvania law requires that it acknowledge receipt of the claim...more

Insurance Recovery Law - September 2014 #2

D&Os Entitled to Unfettered Access to Bankrupt Company’s Policy Proceeds to Fund Defense Costs: Why it matters - In an important victory for directors and officers of a bankrupt company, a New York court...more

Calling a Letter a “Reservation of Rights” Does Not Necessarily Make It So

Many insurers are in the habit of sending perfunctory “reservation of rights” letters to their insureds throughout the lifetime of a claim. The reason they do so is not a very well-guarded secret in the insurance industry. An...more

Eleventh Circuit Dials Back The Specificity Required In An Insurer’s Reservation of Rights—Will Georgia Courts Agree?

The U.S. Court of Appeals for the Eleventh Circuit recently held under Georgia law that an insurance company does not waive a coverage defense by defending the policyholder in an underlying case without reserving its rights...more

"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), held that a CGL insurer breached its duty to defend by refusing to pay for...more

Insurance Recovery Law - May 2014

Policyholder Entitled to Select Counsel, Even Where Insurer Withdrew Reservation of Rights - Why it matters: An insured dissatisfied with counsel selected by its insurer was entitled to select counsel of its...more

Debate Over the ALI’s “Principles of the Law of Liability Insurance” Continues – Advisers Slated to Discuss Contentious Portions

At its 2013 annual meeting, the American Law Institute (ALI) voted to adopt sections 1 through 15 of its “Principles of the Law of Liability Insurance.” However, extensive criticism during the floor debate prevented the ALI...more

Policy Observer - December 2013

Time for a Change? California Revisits Henkel on Coverage for Contractually Acquired Liabilities - The California Supreme Court’s unexpected decision earlier this year to accept review of Fluor Corp. v. Superior Court,...more

Insurance Recovery Law -- Dec 11, 2013

FEMA Clarifies Time Extension for Victims of Sandy - Why it matters: Given the unprecedented meteorological event known colloquially as “Superstorm Sandy,” the Federal Emergency Management Agency granted multiple...more

Everyone Can Find Reasons to Give Thanks for 2013 California Coverage Opinions

Thanksgiving is one day when the whole family gets together and sets aside petty differences to give thanks to the Almighty for the bounty we enjoy. California’s insurance coverage family is often a dysfunctional one. To...more

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