In Travelers Prop. Cas. Co. of Am. v. Centex,, 2013 U.S. Dist. LEXIS 50460, April 8, 2013, a U.S.D.C. case out of California, a developer (Centex) involved in a multiple construction defect suits, filed claims against its insured, Travelers, for its failure to provide a timely defense to the claims. Centex and Travelers filed for summary judgment on a number of issues. Of interest is the right to counsel of choice issue, either because of Travelers' alleged delay in assuming Centex's defense, or because an alleged conflict of interest entitled Centex to Cumis counsel (counsel appointed when the insurer has a conflict with its insured). Centex lost on both issues, with the court actually reversing a prior decision from the same court, holding it would be "manifest injustice" for Travelers to lose the right to choose defense counsel simply because of delay and since it effectively bore the risk of liability if Centex lost, unless it actually waived the right, it retained the right to appoint its own counsel.
The court also rejected Centex's argument for Cumis counsel, finding that the insurer's proceeding with the case under a reservation of rights was insufficient to raise a conflict of interest sufficient to justify appointment of independent counsel for the insurer.
