On May 5, 2015, the parties made their final arguments to the Nevada Supreme Court on the issues of independent counsel in Nevada. State Farm Mut. Auto. Ins. Co. v. Hansen, Nevada Supreme Court Case No. 64484. Neither attorney strayed far from his script. The justices asked only a few questions leaving us to guess at what the final decision may be.
State Farm’s attorney acknowledged that since insurance panel counsel represents both the insured and the insurance company that conflicts can arise. He said that individual attorneys are fully capable of determining when a conflict has arisen. As anticipated by William Barker HERE, the attorney advocated that the court reject Cumis and adopt a methodology similar to the one followed in Washington. Tank v. State Farm, 105 Wn.2d 381, 715 P.2d 113 (1986). In that state, when a conflict arises, the insurance company still gets to pick the attorney but there is no dual representation. When actual coverage conflicts arise, the assigned defense attorney represents only the insured and not the insurance company. State Farm’s attorney emphasized how the Cumis decision created years of chaos in California insurance defense litigation handling and that it took an act of the California legislature to straighten out the problems. Pointing to that chaos, State Farm’s attorney argued that the court should not step in, but should allow the issues to be resolve by the attorneys or by legislature if necessary. [Continue reading]