or second case the story is american family mutual insurance versus westfield there it's case number four one one zero zero eight  very much are you guys going to be splitting your time ok you may p may be sued on account of the fire and that if suit was filed that the american family should be notified immediately and that the defense would be provided by american family of janet dennis in that court loss but the letter also went on to warn  went on to cite specifically intended or expected explosion which provides that her family will not pay work property damage cause for her which is intended or expected from the standpoint of the recklessness could follow in the school reckless conduct but it could very well fall within the exclusion either as intended or possibly as except as expected conduct so reckless that she should have anticipated or well let me back up the one american family down in this instance as they were confronted with that classic situation we see frequently in a coverage situation they are confronted with a complaint which on  falls within the coverage it's a negligence cause of action against the rich or however they also have reason to believe that there could be facts which are proven would take it outside of the coverage because of an exclusion policy that mean always as a duty to defend case so in this instance true we agree entirely that there is no rationale offered other good breeding too early was what was the argument is that the reservation rights letter failed to inform the insured of a pamphlet event and to inform the insured that given that conflict of interest they had it right to control the litigation with their own attorney of their own choice at the expense reveals the existence or potential for a conflict of interest such that the insurer would not have an interest in vigorously defend their life lawsuit and might try to steer it in a fashion where there would not be coverage  reservations too early i don't have to address the issue of a kind but also here is all the cases cited demonstrating or discussing a conflict or what's called true conflicts were serious conflicts and those are those in the ship versus teddy the court said that in the negligence case which result of the verdict negligence against the church the jury was not instructed in did not receive that it has to be the damage resulting was intended or expected from the standpoint of the shirt that's what the policy says we cannot pay for damages which were intended or expected from the standpoint of sure if we were to reverse with this  amount but that tossing a match into an open building could result in damage to the contents of that building into the building so truck would be the issue of truck and the same sort of issues been litigated in the state farm versus labor to same sort of exclusion was a play there and it was a negligence finding commonality of interest and where the issue is different than it was if prior litigation then they're happy pretty with regard to the separate issue being asserted and the separate cause of action and clearly here  american family had a plane supervisor who happened to be an attorney his name was james kean mr keene was monitoring the defense of the case controlling defense counsel and he was also making decisions about expressly stated in his claim notes and we've cited that in the briefs as it appears in the record he expressly stated that there is a conflict here now mr chabon has argued in the past that well just because mr king says it's opportunity to evaluate whether she would allow to go with the counsel selected by american family or are to seek counsel of her choosing one is never given that she and her father had he had an opportunity to retain counsel at their own expense which is contrary to peppers which is contrary to peppers when they expressly stated in the reservation of rights letter not a good thing if they go ahead and provide this absolutely and it's it's might as we'll as what they did well but the difference here the difference here is typically in my experience and i think the case law flushes out is when and it churns company recognizes that there is a potential conflict the potential exclusion that might apply which might preclude coverage he insurance company offers popper's counsel they didn't do that here they never did th y because mr keene and this is in the record it is january sixth two thousand and nine no he says in terms in the context of this sudden he says american family would be better off taking it has not only put it here in family first but he's totally disregarding the interests of the insured and a whole point i don't understand how that demonstrates wow how isn't her interests to be found not guilty by americans is there something in the record here about so many offers and all the risks of this somehow this being more than juiced speculation and i don't know that there is in the record and i  cain decided well well he at least used in his notes that i might consider selling this for a hundred thousand dollars but since we're going to file the d j anyways i don't even offer it so i get the the balance that should be maintained to in the interest of the insured since mr cain an american family are controlling their defense in the interest of the interest company that hurt and that's the conflict that's the conflict of interest here which should have triggered the american family to offer peppers counsel to a few members counsel to shannon and her father and that was never got there would be in the interests of the troops so that cheap how would it be to avoid another trial she had already undergone a trial again it's a minor  what happens usually what happens so then isn't the from the time that american family issued its reservation rights like all the way through the trial this is exactly the type of case where the for which the stop of bactrim was designed to apply and the insured that they may retain a counsel at their own expense and the court determined that that was not sufficient and that contradicted peppers because it did fairly it fairly and that's right that's right but in that case again they've given the opportunity for my client to go out and pay for her own house which sounds amazing we'll pay for your lawyer any sane insurer would say i'm going to pay for my own lawyer and then run the risk of hearing that burden even if it if the insurance company that prevails o actually happened and some of the cases where the insurer insurer has retained its own counsel and sought reimbursement from insurance companies so that situation and i think it depends on the insurance company did not have to pay the underlying judgment judge trial all finding her to be negligent which is a which is covered under the policy well that's exactly right i think my time is up and i will see to mr stokes thank you very much thank you are we going to respond to westfield settlement offer one word answer from the attorney came who is she and his attorney said no that was it through his final cell we know  that isn't true conflict here going back to the timeliness issue there was no set point in time you have to file reservation this point there but we all have a continuing duty tech property there's always did do it in the and i think that what's really the spaza to of this conflict issue is the court statement and shelter mutual insurance research bailey where the court said that insurers interests and even coverage pursuant to an exclusion and a policy insurance does not constitute a conflict of interest at least not the type that would trigger the right to have your own attorney paid for at the insurers expense at a different level there is a conflict but that at the underlying action which is some more control over the song but that was it in the contract which is a part of insurance contracts in the record there's nothing in there that says this is the case in the insurance counter insurance contracts of this kind as opposed to