Hartford Cas. Ins. Co. v. J.R. Marketing, L.L.C., 190 Cal. Rptr. 3d 599 (Cal. S. Ct. 2015)

Hartford Casualty issued commercial general liability (“CGL”) policies to its insureds Noble Locks and J.R. Marketing. After the insureds were sued by a third party, Hartford issued reservation of rights letters based upon possible noncoverage under the policies but agreed to pay the reasonable costs of retaining independent counsel selected by the insureds (“Cumis counsel”). The law firm of Squire Sanders acted as the insureds’ independent counsel. In this action, Hartford seeks reimbursement from Squire Sanders for allegedly unreasonable and unnecessary fees the firm charged to Hartford. Squire Sanders argued that if the insurer has any right at all to recover for overbilled amounts, the insurer’s right runs solely against its insureds (not their attorneys). The California Supreme Court reversed the court of appeal and held that Hartford may seek reimbursement directly from the attorneys.