On January 22, 2018, in Centex Homes v. St. Paul Fire & Marine Ins. Co. (2018) 19 Cal.App.5th 789, the Third Appellate District of the California Court of Appeal held that a possible or potential conflict of interest did not suffice under Code of Civil Procedure section 2860 to entitle an insured developer to independent counsel. The Court of Appeal affirmed the trial court’s grant of summary adjudication in favor of the insurer regarding a coverage dispute over the defense it provided to the developer, Centex Homes, subject to a reservation of rights issued in connection with a construction defect lawsuit.

All employment cases have their own unique facts. Attorneys, employees and employers must carefully consider all consequences concerning the tax ramifications of the settlement of a claim. Given that complex tax laws change often, it may be advisable to also consult with a tax attorney.

The Los Angeles County Bar Association’s Professional Responsibility and Ethics Committee recently issued an advisory opinion addressing the tripartite relationship among insurers, their insureds and defense counsel.