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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. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

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  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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