Today the California Supreme Court issued its decision in Fluor Corporation v. Superior Court. In a unanimous decision, authored by the Chief Justice, the Court rejected the enforceability of “consent to assignment” clauses as a bar to coverage when the loss pre-dates the assignment, based on California Insurance Code section 520, and overruled its prior decision in Henkel Corp. v. Hartford Acc. & Indem. Co. (2003) 29 Cal.4th 934.
Yesterday, the California Supreme Court set two important and much anticipated insurance cases for May oral argument.
On May 26, 2015, the Court will hear argument in Fluor v. S.C. (Hartford Accident & Indemnity Company), No. S205889, which presents the following issue: Are the limitations on assignment of third party liability insurance policy benefits recognized in Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934 inconsistent with the provisions of Insurance Code section 520?
On May 28, 2015, the Court will hear argument in J.R. Marketing, L.L.C. v. Hartford Casualty Insurance, No. S211645, which presents a rare opportunity for guidance from the Supreme Court on independent Cumis counsel issues. The case present the following question: After an insured has secured a judgment requiring an insurer to provide independent counsel to the insured (see San Diego Fed. Credit Union v. Cumis Ins. Society Inc. (1984) 162 Cal.App.3d 358), can the insurer seek reimbursement of defense fees and costs it considers unreasonable and unnecessary by pursuing a reimbursement action against independent counsel or can the insurer seek reimbursement only from its insured?
Both matters will be heard in San Francisco on the 9:00 a.m. calendars. Under California rules, the Supreme Court must issue its decisions in the matters within 90 days after the argument.
On December 12, 2012, the California Supreme Court granted review in Fluor Corporation v. Superior Court (2012) 208 Cal.App.4th 1506, previously commented upon in this blog. The issue on review, as stated on the Supreme Court’s website, is: “Are the limitations on assignment of third party liability insurance policy benefits recognized in Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934 inconsistent with the provisions of Insurance Code section 520?”