Will the Real Counsel for the Insured Please Rise?
Michael A. Berch
Arizona State University (ASU) - Sandra Day O'Connor College of Law
Arizona State Law Journal, Vol. 19, No. 27, 1987
Imagine that you are a defendant in an action for damages arising out of an automobile collision. The complaint predicates liability on alternative bases - negligence and intentional tort. Your automobile insurance policy covers negligent conduct but not intentional conduct. Your insurance company agrees to defend you in the lawsuit, pursuant to policy provisions, but sends a 'reservation of rights' letter to you, purporting to preserve its right to litigate the coverage question at a later date. What are your rights under the policy? Must you accept the insurer's selection of your attorneys? May you select your own attorney to protect your interests? If so, at whose expense? Who does the attorney eventually retained in the matter truly represent? What ethical problems will the attorney face in the representation? These questions have plagued the courts, the bar, and the insurance industry.
This article examines the circumstances in which an insured should be permitted to select an attorney at the insurer's expense. It analyzes and critiques San Diego Navy Federal Credit Union v. Cumis Insurance Society, Inc., 162 Cal. App. 3d 358, 208 Cal. Rptr. 494 (1984), and the principles upon which it is based, reviews the attorney's obligations to the insured under the rules of professional responsibility, and suggests various devices insurers may employ to avoid or mitigate the impact of the Cumis rule. Finally, this article examines the law of Arizona and concludes that Arizona should adopt a Cumis-type rule.
Number of Pages in PDF File: 24
Keywords: Insurance law, ethics, conflict of interest
Date posted: May 29, 2009
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