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Insurer Permitted to Recoup Defense Costs Under Quantum Meruit Theory
Predicting what the Texas Supreme Court would do, the U.S. District Court for the District of Minnesota has allowed an insurer to recover defense costs expended in defending its insured in a liability action. Extrapolating from, and expanding on, a Court of Appeals of Texas opinion, the Minnesota court used a quantum meruit theory to allow the insurer to recoup its defense costs.
St. Paul Fire & Marine Insurance Co. v. Compaq Computer Corp., 2005 WL 1648684 (D.Minn.), was an action by St. Paul to recoup all expenses incurred in defending Compaq in a class action filed in Texas. The underlying class action was filed on Oct. 31, 1999 in federal court in the Eastern District of Texas alleging, among other things, that Compaq had sold computers with defective floppy disk controllers. At the time, Compaq was covered under a St. Paul technology policy, and Compaq tendered its defense to St Paul. By letter dated Nov. 24, 1999, St. Paul accepted the tender and acknowledged its duty to defend, subject to a complete reservation of all of its rights. On Jan. 31, 2000, St. Paul issued a second reservation of rights that stated:
St. Paul reserves the right to withdraw from Compaq's defense upon written notice to you and seek recovery of all fees and expenses incurred in defense of this matter, if it is later determined there is no coverage or duty to defend Compaq in this matter.
St. Paul then indemnified Compaq for more than $668,000 in defense costs and Compaq accepted each check. St. Paul eventually withdrew from the defense.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.