9th Circ.’s Willful Acts Ruling Leaves Defense Question Open
The Ninth Circuit's Wednesday ruling that an insurer has no obligation to cover a settlement over a law firm's alleged malicious prosecution has some legal experts wondering whether carriers are still required to provide a defense for those claims.
Linda Kornfeld, a co-chair of Blank Rome LLP's insurance recovery group told Law360 that the ruling's status as unpublished means it will not disturb established California law and does not address or modify the duty to defend.
"In particular, it cannot change the protections afforded to California policyholders when they incur defense fees in connection with intentional conduct claims like malicious prosecution," she said. "Downey confirmed that even if a malicious prosecution claim is ultimately not covered, defense fees incurred to address the claim are covered."
Kornfeld also said the Ninth Circuit's decision does not address a case where the complaint may present only an intentional conduct claim, but the policyholder faces potential exposure for negligence if the "intentional" conduct is not proven — insurers may not benefit from an unartfully pleaded complaint.
Blank Rome's Kornfeld concluded that the opinion does not change California law nor the right to coverage for a truly innocent or negligent insured.
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"9th Circ.’s Willful Acts Ruling Leaves Defense Question Open," by Shane Dilworth was published in Law360 on March 15, 2023.