Cumis Counsel Overview
One of the most powerful principles in California insurance law is the right to independent counsel pursuant to California Civil Code Section 2860. The right to independent counsel is predicated on the seminal Cumis decision of 1984, which holds that a policyholder has a right to choose independent counsel when an insurance company's reservation of rights creates a conflict of interest between the insurer and the insured. More commonly referred to as Cumis counsel, this critical principle was codified by the California Legislature pursuant to Civil Code Section 2860.
Callahan & Blaine is one of the top Cumis Firms in the Nation
Callahan & Blaine has extensive experience as Cumis counsel. Callahan & Blaine attorneys have acted as Cumis counsel in over 200 cases in the last 20 years alone. Edward Susolik, the chair of Callahan & Blaine's insurance department, has several decades of experience in successfully handling Cumis disputes. In addition to acting as Cumis counsel on hundreds of cases, Mr. Susolik has an extensive expertise in the area of Cumis law. Mr. Susolik has written numerous articles in the area of Cumis, has spoken extensively to lawyer and industry groups on the area of Cumis law, and is generally recognized as one of the top Cumis experts in the western United States.
Practice and Procedure for Cumis Counsel
There are numerous critical issues and principals that arise in the context of Cumis disputes. First, counsel must recognize the situations under which a policyholder is entitled to select independent counsel. Callahan & Blaine has extensive experience and expertise in identifying the specific situations and scenarios that trigger the right to independent counsel. The right to Cumis counsel depends on far more then simply reviewing a reservation of rights letter. The proper analysis requires a detailed examination of all aspects of the third party litigation, including allegations being made in pleadings, discovery or even outside of the litigation context. Counsel must compare the factual allegations of the claimant to the policy and statutory exclusions in order to determine whether Cumis counsel is required. It is a highly sophisticated and complex analysis but absolutely essential to proper analysis of a potential Cumis right.
Callahan & Blaine Aggressively Pursues the Right to Independent Counsel
Callahan & Blaine aggressively pursues the right to Cumis counsel on behalf of its clients. Callahan & Blaine has successfully made hundreds of Cumis demands and is able to utilize this extensive history in his past dealings to successfully represent its clients in future disputes.
In addition to comprehensive demand letters, Callahan & Blaine has many other aggressive ways of obtaining the right to Cumis counsel. These include directly confronting the lawyers appointed by insurance companies to handle third party claims despite a clear conflict of interest, and many other aggressive and creative ways of maximizing its clients rights. For example, Callahan & Blaine may conduct discovery against the plaintiff to obtain their true and accurate allegations.
To the extent that a carrier does not recognize the right to independent counsel pursuant to normal processes, Callahan & Blaine will frequently initiate bad faith litigation and file dispositive motions on the issue of independent counsel. Callahan & Blaine's long record of litigation success provides the foundation for these law and motion efforts. For example, Callahan & Blaine is frequently able to demonstrate the right to independent counsel after conducting discovery, depositions and other litigation activities, including obtaining the critical claims file, where carriers will frequently make admissions regarding conflicts with their policyholders.
Moreover, Callahan & Blaine has an extensive depository and archives of prior disputes that it has had in the over 1,000 bad faith lawsuits and claims that it has successfully handled on behalf of policyholders. For example, Callahan & Blaine has prosecuted approximately 50 bad faith lawsuits against the AIG insurance giant. Thus, Callahan & Blaine has built up an extensive archives of AIG related documents, depositions and other key information that it has obtained during the last 25 plus years. Callahan & Blaine has able to put this information to powerful use in current litigation on behalf of its clients.
After Callahan & Blaine has successfully obtained the right to Cumis counsel, the real work begins, as Callahan & Blaine acts as defense counsel for the lawsuit. Having defense counsel with the insurance law expertise of Callahan & Blaine is the very essence of the Cumis doctrine. It is critical to have expertise and understanding of all insurance issues in the case. The very reason that the law provides the policyholder the right to Cumis counsel is because of the conflict of interest between insurance company and insured with respect to insurance coverage issues. A client needs an insurance expert to act as its defense counsel to maximize the credibility of insurance. In this manner, Callahan & Blaine is able to provide an aggressive and comprehensive defense of the third party claims while at the same time maximizing the insurance benefits available to the client pursuant to the contract of insurance.
In addition to handling all aspects of the defense of the case, including pleadings, discovery, depositions, law and motion, expert witness issues, dispositive motions, pre-trial preparation, and trial, Callahan & Blaine also handles the critical mediation and settlement of the litigation. One of the most important responsibilities of Cumis counsel is using their defense and insurance expertise to successfully resolve lawsuits short of trial at mediation and other settlement conferences. Callahan & Blaine has decades of experience in successfully handling and resolving complex litigation disputes at mediation.
Callahan & Blaine attorneys use their expertise in insurance law to maximize the availability of insurance proceeds at mediation and settle cases successfully. This frequently requires Callahan & Blaine to handle what is essentially a tripartite mediation: the complex business litigation dispute is mediated simultaneously with the insurance coverage disputes that gave rise to the right to an independent counsel. It is absolutely essential that the mediator presiding over the settlement conference have expertise and insurance issues so that the case and the insurance dispute can be simultaneously settled to the clients benefit.
In summary, Callahan & Blaine has successfully acted as Cumis counsel on hundreds of complex litigation disputes. From identifying the right to independent counsel through litigation through a successful resolution of both the litigation and insurance dispute at mediation, Callahan & Blaine successfully handles all aspects of the Cumis counsel dispute.