Procedural Posture

Plaintiff insured petitioned for a writ of mandate seeking review of a decision of respondent Superior Court of Los Angeles County (California) that denied plaintiff's motion for summary judgment in an action between plaintiff and defendant insurer, regarding defendant's right to recover from plaintiff attorney's fees and costs expended to defend plaintiff from claims for which there was no coverage under the policy.

Overview: civil code 3343

Respondent lower court denied plaintiff insured's motion for summary judgment, in an action regarding the right of defendant insurer, the real party in interest, to recover from plaintiff the attorney's fees and costs expended to defend plaintiff from claims for which there was no coverage under the policy but were joined to a claim that was covered. Specifically, only one of the 27 counts alleged against plaintiff in the underlying action, a defamation claim, was potentially covered. Furthermore, the insurer had provided a defense to plaintiff insured under a reservation of rights. Plaintiff petitioned for a writ of mandate, which the court denied. It held that because defendant insurer provided a defense to the entire action under a clear reservation of rights, it could recover defense costs allocable solely to noncovered claims for which there never was a potential for coverage. Furthermore, plaintiff insurer's burden of proof to defeat summary judgment was no greater than a preponderance of the evidence, since it was not seeking to terminate its duty to defend, but was only seeking a recovery of costs expended on non-covered claims.

Outcome

Plaintiff's petition for a writ of mandate was denied in order to allow defendant insurer to prove that the defense costs it sought to recover were not reasonably related to any actually or potentially covered claims.

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