 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Prichard v. Liberty Mutual Insurance Co.11/8/2000
ears to be a sentence fragment ) on which the policyholders here appear to have predicated their characterization of Buss as saying that some sort of agreement is necessary. Here are those sentences: "Not only did Transamerica [the insurer in Buss] reserve all its rights, contractual and otherwise . But, receiving consideration, Buss agreed thereto." (Buss, supra, 16 Cal.4th at p. 61, fn. 27.)
This language comes nowhere close to saying that an agreement is necessary. It merely observes that the policyholder in Buss did impliedly agree to a reservation by virtue of receiving "consideration." And while the nature of that "consideration" was not specified by the high court in the footnote, a reader can gather from the main text that the court was referring to an insurer's providing a defense of claims for which the policyholder never bargained, which is the main theme of Buss's rationale: "With regard to defense costs for these claims, the insurer has not been paid premiums by the insured. It did not bargain to bear these costs. . . . [ ] Without a right of reimbursement, an insurer might be tempted to refuse to defend an action in any part --especially an action with many claims that are not even potentially covered and only a few that are -- lest the insurer give, and the insured get, more than they agreed." (Buss, supra, 16 Cal.4th at pp. 51-52.)
Indeed, the underlying rationale for the rule in Buss is one that goes hand in hand with an insurer's unilateral reservation of reimbursement rights. Essentially, the Buss court said: "What's good for the goose is good for the gander." That is, the well established duty of an insurer to defend the entirety of a "mixed action," i.e., one in which "some of the claims are at least potentially covered and the others are not" (see Buss, supra, 16 Cal.4th at p. 48) is not founded in the contractual agreement, but is itself imposed by law: "We cannot justify the insurer's duty to defend the entire 'mixed' action contractually, as an obligation arising out of the policy, and have never even attempted to do so. . . . [ ] That being said, we can, and do, justify the insurer's duty to defend the entire 'mixed' action prophylactically, as an obligation imposed by law in support of the policy." (Id. at pp. 48-49, emphasis added.) The insurer's reimbursement right merely balances out the insured's right to a defense of the entirety of a mixed action.
Prichard's use of the phrase "unlawfully conditioned" to describe Liberty's December 1, 1995 reservation of rights letter is thus not only inaccurate, but unfair, mangling the word "conditioned" beyond any meaningful recognition. Liberty did not say: "We won't defend this action unless you agree to let us seek reimbursement later." Rather, Liberty said: "We will defend you and we reserve the right to seek reimbursement."
Nor can Liberty's use of the phrase "all of the defense fees paid on behalf of the insured" somehow be contorted into a "conditioning" of a defense obligation it rightfully owed. Prichard makes much of the word "all," trying to make it seem as if Liberty were reserving the right to obtain reimbursement of the costs of defending even the potentially covered claims. But when the whole of the sentence is read in context it is clear that the reservation only refers to such fees as would not be owed under its duty to defend. The qualifying clause after the words "all . . . fees" which reads "from the date upon which the undisputed evidence adduced at the trial of the underlying action showed that there was no potential for coverage under the Liberty Mutual policies" shows the intention to limit the reimbursement claim to fees which Liberty never was obligated to pay in the first
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 California Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|