Company cannot charge insurer for cost of third-party claim as part of defense
Jacobs Technology was sued after Thomas Lapham was injured on a jobsite. Jacobs was covered by an indemnification agreement with De-Cal, Inc., which purchased insurance coverage through Indiana Insurance Company and Netherlands Insurance Company. Jacobs tendered its defense to the insurers and they hired Cardelli, Lanfear & Buikema to represent Jacobs. After the underlying claim was successfully settled, Jacobs sued the insurers to re-pay them for the cost of filing a third-party claim against De-Cal. Jacobs argued that the third-party claim was essential to their defense of the underlying action and that the insurers should pay for the related expense. They also argued that the lawfirm did not provide them with the independent representation they were entitled to under the law.The Court rejected all of Jacobs' claims. It held that Jacobs had not provided adequate proof that the lawyers did not act in their best interest and that the third-party action was not strategically necessary to defend the underlying personal injury claim.