Cumis Counsel: Not Required After Cumis-Triggering Event Withdrawn

  An insurer agrees to provide a defense with a reservation of rights and approves independent counsel selected by the insured to represent the insured in an underlying tort action, pursuant to Civil Code section 2860 and San Diego Federal Credit Union v. Cumis Ins. Society, Inc. The insurer subsequently withdraws all reservations of rights and coverage defenses that give rise to the insured’s right to Cumis counsel. Must the insurer continue to pay the insured’s Cumis counsel after the insurer’s withdrawal of the Cumis-triggering reservations eliminated the conflict that created the need for Cumis counsel?  The answer to this question is no, pursuant to Swanson v. State Farm General Insurance.

  Michael Daymude consults with clients and accepts cases involving disputes with insurance companies, including disputes related to a defense under reservation of rights and the right to Cumis counsel. For other types of cases accepted, please scroll the Home and My Practice pages. If you are seeking a legal consultation or representation, call Michael at 818.971.9409.

Defense Under Reservation of Rights: The Right to Independent Cumis Counsel

  Generally, when defense of a lawsuit is tendered to an insurer, the insurer has the right to appoint counsel for the insured and control the defense. In such circumstances, appointed counsel owes both the insured and the insurer a duty of care and allegiance. Where, however, there are “divergent interests” between the insurer and the insured, the insured is entitled to independent counsel paid for by the insurer. Continue reading