Hartford Cas. Ins. Co. v. J.R. Marketing, LLC

A commercial general liability insurer initially refused to defend its insured against a third-party lawsuit but subsequently provided independent counsel under a reservation of rights (so-called Cumis counsel) to defend its insured in the third party suit. A court order required the insurer to pay defense costs but expressly preserved the insurer’s right to later challenge and recover payments for “unreasonable and unnecessary” charges by counsel. The insurer sought reimbursement, alleging that independent counsel “padded” their bills by charging fees that were, in part, excessive unreasonable and unnecessary. The trial court concluded that the insurer’s right to reimbursement, if any, was from its insureds, not directly from Cumis counsel. The Court of Appeal affirmed, concluding that reimbursement could not be obtained directly from Cumis counsel. The Supreme Court reversed, holding that, under the circumstances of this case, the insurer could seek reimbursement directly from Cumis counsel. View "Hartford Cas. Ins. Co. v. J.R. Marketing, LLC" on Justia Law