 |
 |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|
|
|
|
Finley v. Home Insurance Company12/30/1998
ow the mandates of the HRPC. Assuming that the arrangement between the attorney and the insurer does not violate the HRPC, the retained attorney is sufficiently "independent" that we will not adopt a blanket rule based on the assumption that the attorney will slant his or her representation to the detriment of the insured. Indeed, there is absolutely no allegation in the instant case that MacLaren and Tom's representation of the Aaron Defendants was inadequate or violated their duties under the HRPC.
We note that insurers may foreseeably assert a contractual right to "control" the litigation. However, while the insurer may have a contractual right to select defense counsel, the insurer's desire to limit expenses must yield to the attorney's professional judgment and his or her responsibility to provide competent, ethical representation to the insured. "Whatever the rights and duties of the insurer and the insured under the insurance contract, that contract does not define the ethical responsibilities of the lawyer to his client." ABA Opinion (citing Rogers v. Robson, Masters, Ryan, Brumond and Belom, 407 N.E.2d 47, 49 (Ill. App. Ct.), aff'd, 407 N.E.2d 47 (Ill. 1980)).
When retained counsel, experienced in the handling of insurance defense matters, is allowed full rein to exercise professional judgment, the interests of the insured will be adequately safeguarded. If the insurer or retained counsel fail to meet the professional standards mandated by the HRPC, alternate remedies exist which can be utilized by the insured. See infra, section II.A.4. Moreover, we do not rule out the possibility that, during the pendency of the action, an actual conflict of interest could develop that would warrant the withdrawal or dismissal of retained counsel and the appointment of new counsel. However, in the instant case, no such conflict is alleged to have existed.
The Finleys assert that, in every case in which the insurer defends under a reservation of rights based on multiple claims within and without the scope of insurance coverage, there is an automatic conflict of interest which bars the attorney's representation of the insured without informed consent pursuant to HRPC Rule 1.7. The ICA accepted this proposition. Although it is incontrovertible that the insurer and the insured have divergent economic interests in the outcome of the litigation, HRPC Rule 1.7 bars the attorney's representation only if this conflict will "materially [limit]" the lawyer's representation of the insured. Because of the safeguards inherent in the HRPC, as well as alternate remedies existing in the case of misconduct, we disagree with the Finleys and with the ICA that HRPC Rule 1.7 bars an attorney retained by the insurer from representing the insured under these circumstances without the informed consent of the insured.
3. The insured's options upon tender of a defense by the insurer under a reservation of rights
Although we acknowledge the contractual right of an insurer to select counsel for the insured in the tender of a defense under a reservation of rights, it is well settled that the insured must have the right to reject this tender. See Rhodes v. Chicago Ins. Co., 719 F.2d 116, 120 (5th Cir. 1983) ("When a reservation of rights is made, however, the insured may properly refuse the tender of defense and pursue his own defense.") This right has previously been recognized by implication in this jurisdiction.
"Where the insured refuses to enter into an agreement permitting insurer to defend with reservations, and communicates to the insurer a denial of the latter's right to so defend with reservation . . . and thereafter the insurer fails to withdraw and continues to repr
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 Hawaii Employee Leasing Services
Employee Leasing Services
|
| |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|