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Berger Kahn Wins Dismissal of Bad Faith Suit Berger Kahn recently took the lead for its client and a group of additional insured carriers in a bad faith lawsuit where the general contractor (GC) had been defended by its own general liability insurer. The GC's insurer appointed panel defense counsel and it also paid the GC's independent defense attorneys at a negotiated hourly rate under Civil Code section 2860. The GC's own insurer initiated an equitable contribution lawsuit against subcontractor insurers who had named the GC as an additional insured. The GC itself then sued many of those same additional insured carriers for alleged “bad faith” failure to defend. The GC alleged that it paid its independent attorneys at significantly higher hourly rates than the rate its general liability insurer agreed to pay under Civil Code section 2860. David B. Ezra, a partner in the Orange County office of Berger Kahn, took the lead for the defendants in opposing the GC's lawsuit, arguing that the GC had received one insurer-funded defense and that is all it was entitled to receive. Berger Kahn pointed out that the hourly rate differential could not be considered "damages" caused by any of the additional insured carrier defendants. In the case, Judge Ann Jones of the Superior Court of California, County of Los Angeles, ruled on the defendants' demurrer on Feb. 11 -- finding in favor of Berger Kahn's client and the other additional insured carriers. In its ruling, the trial court explained: "It is a well-established principle of California law that an insured is entitled to only one full defense. See San Gabriel Valley Water Company v. Hartford Accident & Indemnity Company, 82 Cal.App.4th 1230, 1241 (2000). As the presence of multiple insurance carriers with an alleged duty to defend does not increase the insured’s right to recover for the loss, or give the insured the right to recover more than once, defendants’ demurrer is sustained." Back |
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