CBA Record January 2018

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defends the case, and the insurer pays all of your fees and expenses. Win-Win If and when you find the Peppers -trig- gering conflict between the defendant- client-insured and the defendant’s liability insurer, you should immediately contact the insurer, point out the conflict, invoke Maryland Casualty v. Peppers , and tell the insurer that the insured respectfully rejects the defense attorney they hired and wants you as her attorney. This may or may not have the desired effect. The insurer might also try to eliminate the conflict of interest by either waiving the non-coverage (i.e., by agreeing to indemnify on the non- covered counts) or by asking you to have the insured waive the conflict. Peppers, 64 Ill.2d at 198. Insurers do not like to waive non-coverage, and insureds do not like to waive the conflict. If you reach an agreement with the insurer, you will have created a win-win situation for your client: She gets the lawyer she wants representing her and she has someone else paying her legal defense bills. Richard Lee Stavins is a shareholder in the law firm of Robbins, Salomon & Patt, Ltd. in Chicago. He concentrates his practice in trial and appellate litigation. He is a member of the CBA Tort and Litigation Committees and serves on the editorial board of the CBA Record.

(1st Dist. 1985). The attorney’s fiduciary duty is to act in the defendant-client’s best interest and therefore to try to get all pumping up in our example to be on count I, the covered count, not on count II, the non-covered count. That’s all well and good, but the insurer- client wants things to go the other way around, and the insurer is the lawyer’s bread-and-butter. He or she will probably never again see this one defendant-client. So, the defense attorney has an intolerable conflict between loyalty to the client versus loyalty to his or her pocket, no matter how virtuous he might be. And this now brings us to Maryland Casualty v. Peppers. The Peppers Doctrine In Peppers, the Illinois Supreme Court rec- ognized the problem for insurance defense counsel that when defending a case with counts (or claims, or causes of action, or legal theories, or allegations or whatever they may be called) that are covered and counts that are not covered. The result is that under Peppers and its progeny, if there is a conflict of interest between the insured and its liability insurer, then the insured has the right to “reject the defense being offered by the insurer, select an attorney of its own choice, control the defense of the case, and recover its defense costs from the insurer.” Central Mutual Insurance Co. v. Tracy’s Treasurers, Inc., 2014 IL App (1st) 123339, ¶ 45; Thorton v. Paul, 74 Ill.2d 132, 152 (1978); Peppers, 64 Ill.2d at 198- 99. The insured’s personal attorney (you)

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