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7th Circuit rejects lawsuit on insurer’s use of in-house counsel

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The 7th Circuit Court of Appeals Tuesday agreed that a woman’s lawsuit against State Farm Mutual Automobile Insurance Co. should be dismissed because state law creates no obligation for an insurer to provide advance notice to an insured that it uses in-house counsel to defend its policyholders.

Cindy Golden, who is insured by State Farm, brought her lawsuit after State Farm in-house attorney Patrick J. Murphy represented her in a lawsuit that was a result of an accident she was in. Her policy says that in the event of the accident, State Farm will pay “attorney fees for attorneys chosen by us to defend an insured who is sued” for damages.

Murphy sent Golden a letter telling her that he worked full time for State Farm. The lawsuit went to trial, and State Farm paid the nearly $4,000 judgment entered against Golden.

She filed her purported class action, claiming that State Farm had a duty to disclose at the time of the policy issuance the possibly that house counsel would be used in the event of a third-part lawsuit. She alleged breach of “special, confidential and fiduciary duties and common law duties to disclose,” breach of duty of good faith and fair dealing, and unjust enrichment.

Golden cited Cincinnati Insurance Co. v. Wills, 717 N.E.2d 151, 155-56 (Ind. 1999), saying the state’s justices acknowledged such a duty exists. But the case is not on point with hers, the 7th Circuit noted, as the insurance company in that suit used in-house counsel but made it seem like they were from an outside firm.

Current law does not require an insurer to disclose at the outset that its choice of counsel in the event a claim arises may be in-house counsel. The level of disclosure required is up to the insurance commissioner to decide, and the Indiana Department of Insurance has not chosen to require the type of notice that Golden requests, Judge Ilana Rovner wrote in Cindy Golden v. State Farm Mutual Automobile Insurance Company, 12-3901.

The judges also rejected Golden’s request that the court certify the question of policy disclosure to the Indiana Supreme Court.

“As our discussion of Wills should make clear, we are not ‘genuinely uncertain’ about whether an insurer is obligated to disclose, at the time of policy issuance, its practice of using house counsel to defend insureds,” she wrote. “Nor do we believe this case presents a ‘matter of vital public concern’ worthy of certification to the Indiana Supreme Court.”
 

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  1. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

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