Case Brief: Miller Marital Deduction Trust v. Zurich American Ins. Co.

Case Number: A155398
Court: Cal. Ct. App.
Date Filed: 2019-10-21

FACTS: In their federal action, the Miller Marital Trust sought indemnification from Zurich for costs related to a DuBois counterclaim alleging environmental contamination. The Millers requested Cumis counsel representation to manage potential conflicts with Zurich’s interests.

ISSUE: The issue before the court was whether Zurich had a contractual duty under its insurance policies to provide independent Cumis counsel representation to the Miller Marital Trust in defending against the DuBois counterclaim.

HOLDING: The court held that while Zurich had a general duty to defend its insureds, this specific contractually-based duty did not extend to requiring Cumis counsel representation for managing potential conflicts with the insurer’s interests. Thus, Zurich was not obligated to pay for such counsel.

REASONING: The court analyzed the language and intent of the insurance policies in question, as well as relevant provisions of California probate law and insurance contract law. The court found that the policy did not explicitly require Cumis counsel representation, and thus any duty to provide such representation was implicitly limited by the terms of the policy.

This decision highlights the importance for both insurers and insureds to carefully consider and address potential conflicts of interest in their insurance contracts, particularly when it comes to defending against third-party claims.