California Court of Appeal Issues Ruling Regarding Attorney Fee Awards

A California Court of Appeal has affirmed the concept that a successful defendant who is entitled to an attorney fee award can seek an award which is greater than the fees actually billed by the insurance appointed defense counsel who represented the defendant.

In Syers Properties III, Inc. v. Ann Rankin et. al., 226 Cal.App.4th 69 (2014), defendants successfully obtained a judgment of nonsuit in a legal malpractice action. Defendants were entitled to attorney fees by reason of their fee agreement with the plaintiff which entitled the prevailing party to attorney fees. Defense counsel sought and successfully obtained an award of attorney fees which were not tied to the rates actually charged for the representation by presenting evidence to the trial court that a reasonable rate for the representation was actually higher than the rates charged. The court noted that the benchmark for a fee award is reasonableness and there is no requirement that the reasonable market rate mirror the actual rate billed. In concluding that a reasonable rate could exceed the actual rate billed, the court acknowledged that attorneys who do work for insurance companies often work at what are arguably below market rates (in part because of the volume of work). Thus, because counsel was able to convince the trial court that the skill, expertise and experience necessary to successfully litigate the case would reasonably have been charged at higher rates, the court of appeal concluded that the trial court was within its discretion in concluding that a higher rate was reasonable and justified.

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What I Tell You is Privileged and Protected From Discovery (Even if You Embrace It and Reiterate It to Your Insured)

Insurers often rely upon coverage counsel to advise them of their duties and obligations with respect to claims for coverage by their insureds and then take that advice and communicate it in whole or in part to their insureds. The expectation is that the advice of counsel is privileged even if it is thereafter embraced by the insurer and communicated to the insured. But is it? No, said a trial court in West Virginia, where an insured sought from coverage counsel for the insurer opinion letters the counsel had written to the insurer on similar claims (i.e., claims not involved in the litigation between the insured and the insurer). Continue reading “What I Tell You is Privileged and Protected From Discovery (Even if You Embrace It and Reiterate It to Your Insured)”

7th Circuit Upholds Prior Knowledge Provision in Claims-Made Policy

The Seventh Circuit Court of Appeals decided on April 2, 2013 that an Indiana law firm was not entitled to coverage for a claim made and reported in a second policy period where the insured reasonably had knowledge that a claim might be made during the first policy period. Koransky, Bouwer & Poracky v. The Bar Plan Mutual Insurance Co., No. 12-1579, 2013 U.S. App. LEXIS 6558 (7th Cir. Apr. 2, 2013). As the Court noted (in affirming a District Court decision to the same effect), “a reasonable attorney would have recognized that his failure [to deliver a contract during the first policy period] . . .was an omission that could reasonably be expected to be the basis of a malpractice claim.” Continue reading “7th Circuit Upholds Prior Knowledge Provision in Claims-Made Policy”

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