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Case Notes

Cumis Counsel on the Hook for Unreasonable Fees

Last month, we explained that a Cumis counsel is an attorney engaged directly by a defendant when there is liability insurance potentially covering the claim, but there is a conflict of interest between the insurance company and the insured defendant. We went on to discuss Hartford Casualty Insurance Company v. J.R. Marketing, L.L.C., California Supreme Court case no. 5211645.

In this recently decided case, Hartford contended it should be able to recoup the overbilled amounts directly from Cumis counsel. The Cumis counsel, Squire Sanders (US) LLP, argued that if Hartford had any rights at all to recover purportedly overbilled amounts, such rights run solely against Hartford's insured, J.R. Marketing. The latter argued that Hartford could assert no legal or equitable claim against Cumis counsel or any other non-insured because Hartford's right to reimbursement depends on the contractual relationship between Hartford and J.R. Marketing. The trial court in the coverage matter agreed with Squire Sanders and ruled that Hartford's right to reimbursement, if any, was limited to J.R. Marketing.

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