Harsh Result In Dispute Over Appointed Counsel
6/6/2011 Articles
Even when carriers agree to defend an insured, policyholders and carriers can still get locked into disputes about who will provide such a defense. Policyholders often want to choose their own counsel while a carrier has its own idea about who should defend the case. The dispute in Travelers Property v. Centex Homes, C10-02757 (N.D. Cal. April 1, 2011) illustrates this problem and shows how a dispute over defense counsel can potentially lead the carrier to argue that the policyholder has breached its duty to cooperate and that such a breach relieves the carrier of both its duty to defend and indemnify under the policy.
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