In 2019 an Illinois District Court of Appeal used an established test to decide whether an insured has a right to its own independent counsel at the expense of the liability carrier. The case is Xtreme Protection Services, LLC v. Steadfast Insurance Co., ___ N.E.3d ___, No. 1-18-1501, 2019 WL 1976482, 2019 IL App (1st) 181501 (Ill. 1st DCA, 6th Div., May 3, 2019) (stated Not Final), app. denied, 132 N.E.3d 357 (Ill. 2019).
The test that the Illinois Court applied in the Xtreme case is in the mainstream of Illinois insurance law. The Court's concise question was "whether the insurer's interests would be furthered by providing a less-than-vigorous defense" to the allegations in the underlying case against the insured.
That is the simple question that determines the outcome even in complicated cases in Illinois. If and when the given case provides a "yes" answer to that question the carrier has the responsibility to pay for the insured's independent defense counsel in that case and loses the right to provide defense counsel of its own choosing.
The trial court too applied that simple test and in a rare move, entered judgment on the pleadings in favor of the insured.
The appellate court applied the same test and affirmed.
The Xtreme decision is one of many cases discussed at length in Section 3:7, Informing the Insured: Providing Independent, "Mutually Agreeable" Counsel to the Insured, in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (Thomson Reuters West, 3d Edition, forthcoming 2020 Supplement).
Please read the disclaimer. ©2020 Dennis J. Wall. All rights reserved.
Comments