Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

Phone: 602-322-4038
Steven Plitt, Expert Witness

Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

Can Issuing a Supplemental ROR Letter Cure the Insurer’s Failure to Seek Reimbursement in the Original ROR Letter?

| Nov 22, 2018 | Insurance Law

In James River Insurance Co. v. Medolac Laboratories, 290 F.Supp.3d 956 (C.D. Cal. 2018) the court held that a liability insurance company’s failure to seek reimbursement of defense costs in an initial reservation of rights letter did not preclude the insurance company from later reserving the right to do so from the date of a supplemental reservation of rights letter. In so holding, the court rejected the insured’s contention that the insurance company had waived its right to reimbursement or was estopped from asserting the right to reimbursement of attorney’s fees which were incurred after the date of the supplemental reservation of rights letter (where the insurer first reserved its right to seek reimbursement). Regarding waiver, the court held there was no evidence that the insurer’s failure to assert the right in its first ROR was a voluntary relinquishment of a known right. Regarding the estoppel claim, the court found that the insured’s admission that she had acted more proactively in monitoring her insurer-appointed attorney after receiving the supplemental ROR precluded a finding of detrimental reliance and therefore the necessary element of the estoppel claim was missing. 

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