California Casualty Insurance v. State Farm Mutual Automobile Insurance

While I agree with the majority that the excess carrier is entitled to recover defense costs from the primary carrier, I disagree with the conclusion that only some costs can be recovered. My reasoning also differs substantially from the majority’s.

The majority holds that the primary carrier did not effectively discharge its duty to defend by paying its policy limits without obtaining an effective covenant not to execute against the insured. In my view, the primary carrier does not discharge its duty to defend even when it obtains such a covenant. Instead, the duty is extinguished only when…