Procedural Posture: civil defense lawyer

Procedural Posture: civil defense lawyer

Plaintiffs and defendants appealed an order of the Superior Court of Los Angles County (California), in plaintiffs' suit for breach of contract and breach of implied covenant of good faith and fair dealing.

Overview

Suit was filed against plaintiffs alleging copyright and trademark infringement. Defendant was plaintiffs' insurance provider. Plaintiffs demanded independent counsel which defendant denied. Plaintiffs then selected independent counsel and a settlement was reached in the infringement suit. Plaintiffs brought suit against defendant alleging breach of contract, and breach of implied covenant of good faith and fair dealing. Defendant moved for summary adjudication stating the action was barred by plaintiffs' settlement of the underlying action. The trial court found that plaintiffs were not entitled to a presumption that the underlying claim was legitimate, but that lack of independent counsel prevented assertion of valid defenses. However, defendant was held to have a duty to defend. Both parties appealed. The court affirmed concerning the presumption but reversed as to the duty to provide legal counsel, as plaintiffs' mere possibility of conflict did not require independent counsel.

Outcome

Affirmed in part; plaintiffs were not entitled to presumption that they were liable and yet had a viable defense to the claim. Reversed in part; defendant did not have a duty to provide independent legal counsel merely based on the possibility of conflict.