An attorney’s failure to deal in good faith adversely affects its client.
There are limits to how aggressively a defense attorney can represent the interests of his or her client. Courts will not tolerate underhanded trickery.
This was reaffirmed in a recent Illinois case, Harwell v. Fireman’s Fund, et al., 2016 App (1st) 152036. Jill Berkeley, in an article in Policy Holder Insurance Blog, explains the adverse consequences for a builder and its insurer that resulted from their counsel’s failure to disclose the insured’s revised coverage limitations.
Harwell, who was injured while working on a construction site for Kipling Development Corp., filed suit against Kipling for “negligently fail[ing] to properly supervise and direct the construction site and fail[ing] to ensure a safe workplace.”
The contractor requested that its insurer, Fireman’s Fund, defend the suit. Fireman’s Fund appointed a defense attorney to represent Kipling.
Defense counsel, on behalf of Kipling, stated in interrogatories that the defendant’s policy had coverage limits of $1,000,000. Harwell was awarded a judgment of $200,000.
Fireman’s Fund’s attorney then filed for a summary judgment to reduce the award, asserting that “a $50,000 sublimit applied because Kipling had failed to obtain certificates of insurance and hold harmless agreements as required in by a policy endorsement.”
The trial court agreed with Fireman’s Fund; the plaintiff appealed.
The judgment was overturned by the Illinois Appellate Court which stated the defendant was equitably estopped from profiting from its failure to supplement its interrogatories because this kept the plaintiff’s counsel from learning of the limitation on the plaintiff’s coverage.
According to the Appellate Court, “’Fireman’s Fund’s agenda seems clear: deny coverage to Kipling, control the information to Harwell, fight Harwell tooth and nail through the original case, and after losing the trial— reveal the endorsement. This smacks of sandbagging, which we do not condone.’”
As Ms. Berkeley notes, “It may seem harsh to conflate the defenses lawyer’s duty to supplement answers to interrogatories with Fireman’s Fund’s assertion of a coverage position, but it is not without precedent.”
What this case demonstrates, once again, is that construction companies and their counsel must be absolutely certain that all relevant information in their possession is given to opposing counsel.
Defense Lawyers Beware: Failure to Supplement Answers to Interrogatories Estopped Insurer from Relying on Coverage Limitation, Jill Berkeley, Policyholder Insurance Blog, Sept. 28, 2016.