Tripartite Relationship: Roles and Duties of all the Players

Co-Authors

S. Alice Weeks, Associate
S. Alice Weeks is an attorney with Hunton Andrews Kurth LLP in the firm ’s Miami, Florida, office.

Lisa A. Szymanski, Partner
Lisa A. Szymanski is an attorney with Reed Smith in the firm ’s Philadelphia, Pennsylvania, office.

Avoid ethical dilemmas that may arise out of the tripartite relationship by understanding the roles and duties of all the players before engaging in the relationship.

The tripartite relationship is the relationship among the defense lawyer, the insurer, and the policyholder that is created when the defense lawyer is hired by an insurer to defend a suit against the policyholder. In some jurisdictions, like Minnesota and Alabama, the policyholder and the insurer have been considered dual clients. ¹ Other jurisdictions, like Arizona and California, consider the policyholder the “primary client,” implying that the lawyer at least has a secondary obligation to the insurer. ² In Texas, Montana, Michigan, and Connecticut, the law is clear that the policyholder is the only client. ³ This article provides guidance on how to handle the conﬂicts that will inevitably arise when an insurer hires staﬀ counsel or outside counsel to defend the insured, with a focus on Texas and Florida law. This article is not exhaustive, and an analysis of conﬂict issues in the tripartite relationship should be considered on a jurisdictional basis.

The Insurer’s Duties in the Tripartite Relationship

The players in the tripartite relationship can become somewhat of a dysfunctional family when the insurer agrees to defend the policyholder but does so under a reservation of rights. This becomes a problem when the potential exists for the defense lawyer to develop a case toward a result favorable on a coverage issue to either the insurer or the policyholder. For example, if an underlying complaint alleges mutually exclusive theories of recovery, such as negligence (covered) and intentional torts (not covered), both the carrier and the defense lawyer are put into diﬃcult positions with potential ethical pitfalls.

There are at least four main conﬂicts that may arise when there is a potential coverage dispute: (1) whether the insurer or the policyholder controls the defense, (2) whether the insurer or policyholder controls the ﬂow of information, (3) the reasonableness of attorney fees and expenses and attempts by an insurer to manage litigation costs, and (4) whether the insurer or policyholder controls settlement. One of the best ways to deal with and avoid ethical dilemmas that may arise out of the tripartite relationship is to understand the roles and duties of all the players before engaging in the relationship.

The Right to Control the Defense

Certain policy language grants the insurer the right and duty to defend. Several provisions in a liability insurance policy state that the insurer, and not the policyholder, has the right to control the defense—speciﬁcally the insuring agreement, the supplementary payments clause, the cooperation conditions, and the voluntary payments and obligations condition. ⁴Typical liability insurance contracts attempt to vest in the insurer broad control of the defense. Certain manuscript forms provide that the insurer has the right to select defense counsel. The availability of such language in the marketplace can provide policyholders the grounds to argue, in the event of a conﬂict of interest, that if such language is absent, it means that the right and duty to defend does not automatically include the unilateral right to control the appointment of defense counsel.

Absent coverage issues, the insurer’s right to control the defense is an essential part of the business of insurance because the insurer needs to be able to manage its risks under the policy and predict its potential exposure. ⁵ Moreover, when there are no coverage issues, the insurer, who will ultimately have to pay any judgment within the policy, has an economic incentive identical to that of the insured. The disadvantages to this arrangement surface, however, when the insurer tries to restrict the lawyer’s defense of the insured based on cost control or other considerations, such as when the insurer and insured are not in agreement regarding a settlement. Tensions may arise when the insurer is providing a defense under a reservation of rights to disclaim its coverage obligation. In that instance, the insurer’s motivation to establish that the claim does not fall within the policy’s coverage may be perceived as overriding or interfering with its incentive to minimize the policyholder’s liability.

The Right to Select Defense Counsel

Texas – An insurer’s “right to defend” a lawsuit “encompasses the authority to select the attorney who will defend that claim and to make other decisions that would normally be vested in the insured as the named party in the case.” ⁶ Not every reservation of rights creates a conﬂict of interest allowing an insured to select independent counsel. Rather, the existence of a conﬂict depends on the nature of the coverage issues as they relate to the underlying case. If the insurance policy gives the insurer the right to control the defense of a case, the insured cannot choose independent counsel and require the insurer to reimburse the expenses unless “the facts to be adjudicated in the liability lawsuit are the same facts upon which coverage depends.” ⁷

If the issue on which coverage turns is independent of the issues in the underlying case, counsel selected by the insured is not required. A true conﬂict of interest does not arise unless the outcome of the coverage issue can be controlled by counsel retained by the insurer for the defense of the underlying claim. This rule allows insurers to control costs while permitting insureds to protect themselves from an insurer-hired attorney who may be tempted to develop facts or a legal strategy that could ultimately support the insurer’s position that the underlying lawsuit ﬁts within a policy exclusion. ⁸

Florida – Conversely, Florida allows the policyholder to retain independent counsel under certain circumstances. However, unlike certain other jurisdictions that allow independent counsel where the insurer has reserved rights (e.g., California), Florida puts a great deal more onus on the policyholder to establish why the insurer’s counsel of choice is unacceptable. For example, a federal district court concluded that the policyholder must show actual prejudice, harm, or some equally compelling reason why the insurer’s appointed counsel was not agreeable. ⁹

Moreover, the policyholder must aﬃrmatively reject the carrier’s defense oﬀered under a reservation of rights before the policyholder can retain his or her own lawyer. ¹⁰ The insured’s right to independent counsel when the insurer has asserted a coverage defense is codiﬁed in Section 627.426 of the Florida Statutes.

Withdrawing a Defense

Texas – Pursuant to Texas law, when a defense is undertaken through a valid reservation of rights, the insurer may withdraw its defense when it becomes clear there is no coverage under the policy. ¹¹

Proper notice must be given by the insurer when it discovers a valid policy defense and intends to withdraw. ¹² An insurer withdrawing a defense should provide its insured with a detailed explanation of the insurer’s coverage position. Moreover, the insurer should allow the insured suﬃcient time to respond and provide the insurer with evidence the insured may have that it would like considered in the carrier’s coverage analysis.

Florida – Under Florida law, an insurer may withdraw a defense under a reservation of rights only when there are no longer any covered claims. ¹³

Control of Information

Once in litigation, additional diﬃculties can arise regarding the responsibilities of the insurer, the policyholder, and defense counsel with respect to information generated and accumulated as the litigation unfolds. Diﬃcult questions often arise concerning the duties of the policyholder and defense counsel to share with the insurer information discovered in the underlying action.

In Texas, the defense counsel has a duty to disclose to the insurer all information concerning the action relevant to the underlying lawsuit and to timely inform and consult with the insurer on all matters relating to the action. This duty does not, however, require disclosure of privileged or conﬁdential information pertaining to coverage to the insurer. ¹⁴ For example, Texas Civil Procedure Rule 192.4 speciﬁcally states that insurers are protected by the work-product doctrine. Status reports and other information prepared for the carrier by defense counsel may be privileged. ¹⁵

Other jurisdictions, however, hold that where an insurer has reserved its rights, the insurer does not share a common interest with the insured that entitles it to privileged defense material. For example, under Ohio law, if an insurance company is not funding a defense or where it has reserved its rights to deny coverage, no common interest exists. In Buckeye Corrugated, Inc. v. Cincinnati Insurance Co., the Court of Appeals of Ohio ruled that an insurance company that had reserved its rights to deny coverage could not use the common interest privilege to force the policyholder to surrender privileged materials from the underlying litigation. ¹⁶ In so holding, the court opined that the common interest exception should be narrowly construed and applies only where the “‘disclosures are made in the course of formulating a common legal strategy.’” ¹⁷ Because the policyholder had retained its own counsel in light of the insurer’s reservation of rights, no common interest existed. Indeed, courts across jurisdictions have rejected forcing policyholders to choose between losing coverage or compromising conﬁdentiality. ¹⁸

The Insurer’s Duty to Settle

Liability insurance contracts generally provide that the insurer may assume control over the settlement of any litigation against its insured. ¹⁹ When a settlement oﬀer is made that may favor one party’s interest over the other party’s interest, diﬃcult questions arise relating to the varying, and often conﬂicting, interests of the insurer, on the one hand, and those of the policyholder and defense counsel, on the other. ²⁰ Under the terms of most liability policies, when a settlement oﬀer is presented, the insurer has the right to receive all relevant information necessary to evaluate the settlement oﬀer in the context of the litigation. Some jurisdictions impose a duty on insurers to consider the policyholder’s interest at least equally with its own when considering a potential settlement. ²¹ Moreover, the insurer may be held liable for damages in excess of policy limits if it fails to accept a settlement within policy limits without making a diligent assessment of the issue.

Rule 1.2 of the Model Rules of Professional Conduct states that “[a] lawyer shall abide by a client’s decision whether to accept an oﬀer of settlement of a matter.” In most liability claims, the insurer has the right to settle a matter without the consent of the insured. The insured usually does not have a say in the matter except in the limited circumstances involving professional liability insurance. Even though the insurer does not require the insured’s consent before settlement, the defense attorney’s role is problematic especially in cases where (a) the relevant jurisdiction considers both the insured and the insurer to be clients of the attorney or (b) the insurer and the insured are not in agreement on whether or not to settle the matter. ²²

Although liability insurance contracts generally provide that the insurer may assume control over the settlement of any litigation against its insured, certain situations may arise that create questions as to whether the insurer or the policyholder should assume control over the settlement negotiations or decisions when a true coverage conﬂict exists. ²³ For example, if a policyholder has assumed control of its own defense because of a true coverage conﬂict with the insurer, it can be argued that the policyholder should also be vested with the authority over settlement decisions as well. On the other hand, it has been argued that, because the duty to defend is distinct from the duty to indemnify, the policyholder should not be aﬀorded the same control over settlement as it has over the defense.

Texas – Under the Stowers doctrine, the insurer must act with “that degree of care and diligence which an ordinarily prudent person would exercise in the management of his own business” in responding to settlement demands within policy limits. ²⁴ According to Stowers, the policyholder is exposed to the additional risk of an excess judgment when the insurer was presented with a reasonable opportunity to settle within policy limits but failed to do so. ²⁵ There are several other criteria relevant to the Stowers doctrine and whether a policy limit demand meets those criteria.

Florida – An insurer in Florida has an aﬃrmative duty to attempt a settlement of a third-party claim within the policy limits. Failure to do so will expose the insurer to bad-faith liability. Moreover, the lack of a formal oﬀer to settle does not preclude a ﬁnding of bad faith, although an oﬀer of settlement was once considered a necessary element of a cause of action for bad-faith failure to settle. In General Accident Fire & Life Assurance Corp. v. American Casualty Co. of Reading, Pennsylvania, ²⁶ a Florida appellate court held that an oﬀer to settle is not a prerequisite to the imposition of liability for an insurer’s bad-faith refusal to settle; instead, it is merely one factor to be considered. ²⁷ Bad faith may be inferred from a delay in settlement negotiations if the delay is willful and without reasonable cause. Where liability is clear and injuries so serious that a judgment in excess of the policy limits is likely, an insurer has an aﬃrmative duty to initiate settlement negotiations.

The Insurer’s Right’s to Reimbursement

Texas – On February 1, 2008, the Texas Supreme Court issued its second opinion in Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, which recognizes a policyholder owed no implied obligation to reimburse the insurer for a settlement. ²⁸ The court reaﬃrmed its conclusion in Texas Association of Counties County Government Risk Management Pool v. Matagorda County, that “when coverage is disputed and the insurer is presented with a reasonable settlement demand within policy limits, the insurer may fund the settlement and seek reimbursement only if it obtains the insured’s clear and unequivocal consent to the settlement and the insurer’s right to seek reimbursement.” ²⁹ This is because, according to the court, “[o]therwise, the insured is forced to choose between rejecting a settlement within policy limits or accepting a possible ﬁnancial obligation to pay an amount that may be beyond its means, at a time when the insured is most vulnerable.” ³⁰ According to the court, that fundamental concern is unaﬀected by the fact that the excess underwriters had no duty to defend in this case.

Florida – Generally, an insurer is not entitled to attorney fees in such cases, but an exception exists under the facts and circumstances of Colony Insurance Company v. G & E Tires and Service, Inc. ³¹ Under Colony Insurance, an insurer is entitled to reimbursement for all costs and fees incurred in defending the underlying suit if the defense was initially provided under an expressed reservation of rights providing for attorney fees and costs if the insurer prevailed in a subsequent coverage action—and if the insured accepts such defense.³² To potentially avoid this situation, when accepting a defense, an insured should expressly reject the insurer’s right to recoup defense costs.

Conclusion

The tripartite relationship can have its diﬃculties. In many cases, the goals of the insured and insurer are perfectly aligned. In cases in which the insurer defends under a reservation of rights and the jurisdiction recognizes only the policyholder as the attorney’s client, the insured can take comfort in the fact that defense lawyers are, by and large, trustworthy and ethical and follow the mandates of the law and the Professional Rules of Conduct to zealously represent the insured’s interest, and only the insured’s interest.

First published in the ABA Litigation Section Insurance Coverage Committee newsletter Coverage Winter 2023.

Endnotes

1. undefined
2. undefined
3. undefined
4. Michael M. Marick & Karen M. Dixon, “The Insurance Contract ‘Right’ to Defend: The ‘Tripartite’ Relationship Reconsidered,” Tort Trial & Ins. Prac. L.J ., Summer 2004.
5. Tanya Bryant, “Loyalty Divided? Ethical Considerations of the Tripartite Relationship in Insurance Defense Litigation,” Oklahoma City L. Rev., Fall 2004.
6. N. Cty. Mut. Ins. Co. v. Davalos, 140 S.W.3d 685, 688 (Tex. 2004).
7. Davalos, 140 S.W.3d at 689.
8. Unauthorized Practice of Law Comm . v. Am . Home Assurance Co., 261 S.W.3d 24 (Tex. 2008); Hous. Auth. of the City of Dallas, Tex. v. Northland Ins. Co., 333 F. Supp. 2d 595 (N.D. Tex. 2004); Downhole Navigator, LLC v. Nautilus Ins. Co., 20 11 WL 4889125 (S.D. Tex. May 9, 2011), aff’d, 686 F.3d 325 (5th Cir. 2012); Coats, Rose Yale, Ryman & Lee, P.C. v. Navigators Specialty Ins. Co., 830 F. Supp. 2d 216 (N.D. Tex. 20 11), aff’d, 489 F. App’x 769 (5th Cir. 2012).
9. Prime Ins. Syndicate, Inc. v. Soil Tech Distribs., No . 8:0 5- CV- 280 -T- 30, 20 0 6 WL 1823562 (M.D. Fla. June 30, 2006).
10. Aguero v. First Am. Ins. Co., 927 So . 2d 894 (Fla. 3d Dist. Ct. App. 2005); see also Cont’l Ins. Co . v. Miami Beach, 521 So . 2d 232 (Fla. 3d Dist. Ct. App. 1998) (policyholder’s approval as to selection of independent counsel appointed by carrier is required; policyholder must mutually agree to the appointment of independent counsel).
11. See Keterndahl v. State Farm Fire & Cas. Co., 961 S.W.2d 518, 512 (Tex. App. San Antonio 1997).
12. See W. Cas. & Sur. Co . v. Newell Mfg. Co., 566 S.W.2d 74 (Tex. App. San Antonio 1978).
13. Wackenhut Servs., Inc. v. Nat’l Unio n Fire Ins. Co. of Pittsburgh, Pa., 15 F. Supp. 2d 1314, 1324 (S.D. Fla. 1998).
14. Dale E. Hausman, “Conflict Issues in the Tripartite Relationship,” in Litigation, Insurance Law 2006: Understanding the ABC’s (PLI Litig. & Admin. Practice, Course Handbook Ser., Apr. 2006).
15. See also Kohl’s Dep’t Stores v. Liberty Mut. Ins. Co., No . BCD- CV- 12- 13, 20 12 Me. Super. LEXIS 153, at *18 (Me. Super. Ct. Oct. 11, 2012) (“Although the interest of insurer and insured is not identical when there has been a reservation of rights, the insurer and the insured should be able to communicate freely with respect to the litigation to the extent o f their common interest without fear that the plaintiff in a subsequent reach and apply litigation could seek disco very of those communications. To hold otherwise would ham string an insured in defense of claims against it and significantly jeopardize the opportunity for settlement of the litigation.”)
16. Buckeye Corrugated, Inc. v. Cincinnati Ins. Co., No . 26634, 20 13 Ohio App. LEXIS 3613, at *9 (Ohio Ct. App. Aug. 14, 2013).
17. Buckeye Corrugated, 20 13 Ohio App. LEXIS 3613, at *9 (quoting Cigna Ins. Co. v. Cooper Tires & Rubber, Inc., No . 3:99CV7397, 2001 WL 640703, at *2 (N.D. Ohio May 24, 2001)).
18. See, e.g., Bituminous Cas. Corp. v. Tonka Corp., 140 F.R.D. 381, 386 (D. Minn. 1992) (“This court rejects the conclusion that because an insured agrees to cooperate with the insurance company, in the event he [or she] is sued or otherwise makes a claim under the policy, that the insured has thereby forever contractually waived the attorney-client privilege.”); Remington Arm s Co. v. Liberty Mut. Ins. Co., 142 F.R.D. 40 8, 417 (D. Del. 1992) (concluding that insurance policy’s duty to cooperate does not require waiver o f privilege); Pittston Co . v. Allianz Ins. Co., 3 F.R.D. 66, 72 (D.N.J . 1992) (reasoning that while a cooperation clause might require a policyholder to produce documents when the policyholder and carrier are commonly defending against a third party, the cooperation clause does not require the policyholder to produce privileged documents in a subsequent coverage dispute); Metro . Life Ins. Co . v. Aetna Cas. & Sur. Co., 730 A.2d 51, 63– 64 (Conn. 1999) (ruling policyholder need not turn over privileged material to excess insurer that had reserved rights).
19. Some liability policies provide a “consent clause,” which requires the carrier to obtain the policyholder’s consent before settling a claim . If an insured refuses to consent to a settlement amount posed by the carrier and the case settles for a higher amount, most “consent clauses” provide the insurer with the opportunity to recoup the difference in the settlement amounts from the insured.
20. Hausman, “Conflict Issues in the Tripartite Relationship,” supra note 14.
21. See, e.g., Merritt v. Reserve Ins. Co., 110 Cal. Rptr. 511 (Cal. Ct. App.1974); Fulton v. Woodward, 545 P.2d 979 (Ariz. Ct. App. 1976); Hartford Accident & Indem. v. Foster, 528 So . 2d 255 (Miss. 88).
22. Shawn McParland Baldwin, “One Step Beyond Meadowbrook: Can an Insurer Direct Defense Counsel to Dismiss Covered Claims?,” Def. Counsel J., Apr. 2005.
23. Hausman, “Conflict Issues in the Tripartite Relationship,” supra note 14.
24. Stowers Furniture Co. v. Am. Indem. Co., 15 S.W.2d 544, 547– 48 (Tex. Comm’n App. 1929) (holding approved).
25. American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 849 (Tex. 1994).
26. Gen. Accident Fire & Life Assurance Corp. v. Am . Cas. Co. of Reading, Pa., 390 So. 2d 761, 765 (Fla. 3d Dist. Ct. App. 1980 ), review denied, 399 So. 2d 1142 (Fla. 1981).
27. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12, 14 (Fla. 3d Dist. Ct. App. 1991).
28. Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, 246 S.W.3d 42 (Tex. 2008).
29. Tex. Ass’n of Counties Cty. Gov’t Risk Mgmt. Pool v. Matagorda County, 52 S.W.3d 128, 135 (Tex. 00).
30. Texas Association of Counties, 52 S.W.3d at 135.
31. Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So. 2d 10 34 (Fla. 1st Dist. Ct. App. 2000).
32. Wendy’s of N.E. Fla., Inc. v. Vandergriff, 865 So. 2d 520, 522 (Fla. 1st Dist. Ct. App. 2003).
33. undefined
34. undefined
35. undefined
36. Michael M. Marick & Karen M. Dixon, “The Insurance Contract ‘Right’ to Defend: The ‘Tripartite’ Relationship Reconsidered,” Tort Trial & Ins. Prac. L.J., Summer 2004.
37. Tanya Bryant, “Loyalty Divided? Ethical Considerations of the Tripartite Relationship in Insurance Defense Litigation,” Oklahoma City L. Rev., Fall 2004.
38. N. Cty. Mut. Ins. Co. v. Davalos, 140 S.W.3d 685, 688 (Tex. 2004).
39. Davalos, 140 S.W.3d at 689.
40. Unauthorized Practice of Law Comm. v. Am. Home Assurance Co., 261 S.W.3d 24 (Tex. 2008); Hous. Auth. of the City of Dallas, Tex. v. Northland Ins. Co., 333 F. Supp. 2d 595 (N.D. Tex. 2004); Downhole Navigator, LLC v. Nautilus Ins. Co., 20 11 WL 4889125 (S.D. Tex. May 9, 20 11), aff’d, 686 F.3d 325 (5th Cir. 2012); Coats, Rose Yale, Ryman & Lee, P.C. v. Navigators Specialty Ins. Co., 830 F. Supp. 2d 216 (N.D. Tex. 20 11), aff’d, 489 F. App’x 769 (5th Cir. 2012).
41. Prime Ins. Syndicate, Inc. v. Soil Tech Distribs., No. 8:0 5-CV- 280 -T-30, 2006 WL 1823562 (M.D. Fla. June 30, 2006).
42. Aguero v. First Am. Ins. Co., 927 So. 2d 894 (Fla. 3d Dist. Ct. App. 2005); see also Cont’l Ins. Co. v. Miami Beach, 521 So. 2d 232 (Fla. 3d Dist. Ct. App. 1998) (policyholder’s approval as to selection o f independent counsel appointed by carrier is required; policyholder must mutually agree to the appointment of independent counsel).
43. See Keterndahl v. State Farm Fire & Cas. Co., 961 S.W.2d 518, 512 (Tex. App. San Antonio 1997).
44. See W. Cas. & Sur. Co. v. Newell Mfg. Co., 566 S.W.2d 74 (Tex. App. San Antonio 1978).
45. Wackenhut Servs., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 15 F. Supp. 2d 1314, 1324 (S.D. Fla. 1998).
46. Dale E. Hausman, “Conflict Issues in the Tripartite Relationship,” in Litigation, Insurance Law 2006: Understanding the ABC’s (PLI Litig. & Admin. Practice, Course Handbook Ser., Apr. 2006).
47. See also Kohl’s Dep’t Stores v. Liberty Mut. Ins. Co., No. BCD-CV-12-13, 2012 Me. Super. LEXIS 153, at *18 (Me. Super. Ct. Oct. 11, 2012) (“Although the interest of insurer and insured is not identical when there has been a reservation of rights, the insurer and the insured should be able to communicate freely with respect to the litigation to the extent of their common interest without fear that the plaintiff in a subsequent reach and apply litigation could seek discovery of those communications. To hold otherwise would hamstring an insured in defense of claims against it and significantly jeopardize the opportunity for settlement of the litigation.”)
48. Buckeye Corrugated, Inc. v. Cincinnati Ins. Co., No. 26634, 2013 Ohio App. LEXIS 3613, at *9 (Ohio Ct. App. Aug. 14, 2013).
49. Buckeye Corrugated, 2013 Ohio App. LEXIS 3613, at *9 (quoting Cigna Ins. Co. v. Cooper Tires & Rubber, Inc., No. 3:99CV7397, 2001 WL 640 70 3, at *2 (N.D. Ohio May 24, 2001)).
50. See, e.g., Bituminous Cas. Corp. v. Tonka Corp., 140 F.R.D. 381, 386 (D. Minn. 1992) (“This court rejects the conclusion that because an insured agrees to cooperate with the insurance company, in the event he [or she] is sued or otherwise makes a claim under the policy, that the insured has thereby forever contractually waived the attorney-client privilege.”); Remington Arms Co. v. Liberty Mut. Ins. Co., 142 F.R.D. 40 8, 417 (D. Del. 1992) (concluding that insurance policy’s duty to cooperate does not require waiver o f privilege); Pittston Co. v. Allianz Ins. Co., 143 F.R.D. 66, 72 (D.N.J . 1992) (reasoning that while a cooperation clause might require a policyholder to produce documents when the policyholder and carrier are commonly defending against a third party, the cooperation clause does not require the policyholder to produce privileged documents in a subsequent coverage dispute); Metro. Life Ins. Co. v. Aetna Cas. & Sur. Co., 730 A.2d 51, 63– 64 (Conn. 1999) (ruling policyholder need not turn over privileged material to excess insurer that had reserved rights).
51. Some liability policies provide a “consent clause,” which requires the carrier to obtain the policyholder’s consent before settling a claim. If an insured refuses to consent to a settlement amount posed by the carrier and the case settles for a higher amount, most “consent clauses” provide the insurer with the opportunity to recoup the difference in the settlement amounts from the insured.
52. Hausman, “Conflict Issues in the Tripartite Relationship,” supra note 14.
53. See, e.g., Merritt v. Reserve Ins. Co., 110 Cal. Rptr. 511 (Cal. Ct. App.1974); Fulton v. Woodward, 545 P.2d 979 (Ariz. Ct. App. 1976); Hartford Accident & Indem. v. Foster, 528 So. 2d 255 (Miss. 1988).
54. Shawn McParland Baldwin, “One Step Beyond Meadowbrook: Can an Insurer Direct Defense Counsel to Dismiss Covered Claims?,” Def. Counsel J., Apr. 2005.
55. Hausman, “Conflict Issues in the Tripartite Relationship,” supra note 14.
56. Stowers Furniture Co. v. Am. Indem. Co., 15 S.W.2d 544, 547–48 (Tex. Comm’n App. 1929) (holding approved).
57. American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 849 (Tex. 1994).
58. Gen. Accident Fire & Life Assurance Corp. v. Am. Cas. Co. of Reading, Pa., 390 So. 2d 761, 765 (Fla. 3d Dist. Ct. App. 1980), review denied, 399 So. 2d 1142 (Fla. 1981).
59. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12, 14 (Fla. 3d Dist. Ct. App. 1991).
60. Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, 246 S.W.3d 42 (Tex. 2008).
61. Tex. Ass’n of Counties Cty. Gov’t Risk Mgmt. Pool v. Matagorda County, 52 S.W.3d 128, 135 (Tex. 2000).
62. Texas Association of Counties, 52 S.W.3d at 135.
63. Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So. 2d 10 34 (Fla. 1st Dist. Ct. App. 2000).
64. Wendy’s of N.E. Fla., Inc. v. Vandergriff, 865 So. 2d 520, 522 (Fla. 1st Dist. Ct. App. 2003).