Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-02445/USCOURTS-caed-2_04-cv-02445-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CAROLINA CASUALTY INSURANCE

COMPANY, a Florida

Corporation,

NO. CIV. S-04-2445 FCD PAN

Plaintiff,

MEMORANDUM AND ORDER

v.

BOLLING, WALTER & GAWTHROP, a

California Professional

Corporation; THEODORE D.

BOLLING, JR., a California

resident; and DOES 1-50,

inclusive,

Defendants.

_____________________________/

----oo0oo----

This matter comes before the court on motion for summary

judgment, pursuant to Fed. R. Civ. P. 56, filed by plaintiff,

Carolina Casualty Insurance Co. (“CCIC”). Defendants, Bolling,

Walter & Gawthorp (“BWG”) and Theodore D. Bolling

(“Bolling”)(collectively “defendants”), oppose the motion and

request dismissal or in the alternative a stay of the action. 

Case 2:04-cv-02445-FCD-PAN Document 18 Filed 06/01/05 Page 1 of 18
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1 The Eastern District Local Rules provide that a party

opposing a motion for summary judgment may file an additional

statement of disputed facts. Here, defendants do not specify

whether the facts in the Separate Statement of Additional Facts

are presented as disputed facts or undisputed facts. The

substance of the facts suggests that they are offered as

additional undisputed facts. For example, the parties do not

dispute that “CCIC is in the business of issuing policies of

insurance.” (See SAF ¶ 6.)

2 The CCIC policy defines “Claims Expense” as “reasonable

and necessary fees, costs and expenses . . . resulting solely

from the investigation adjustment, defense and appeal of a Claim

against the Insureds, but excluding salaries, wages, overhead or

(continued...)

2

For the reasons stated herein, plaintiff’s motion is GRANTED and

defendants request for dismissal or stay is DENIED.

BACKGROUND

This matter arises out of a dispute between an insurer and

an insured over who has the right to determine the identity of

legal counsel to represent the insured in a legal malpractice

action pending in California superior court. 

BWG is a professional law corporation, organized under the

laws of California and based in Sacramento, California. (Defs.’

Sep. Statement of Add’l Facts in Opp’n Summ. J. (“SAF”) ¶ 1.)1

Bolling is an attorney licensed to practice law in California,

who is employed by BWG. (SAF ¶ 2.) CCIC is a corporation

organized under the laws of the state of Florida, and is in the

business of issuing policies of insurance. (SAF ¶ 5.) 

CCIC issued a Lawyer’s Professional Liability Policy to

defendants for the period from August 18, 2003 to August 18,

2004. (Defs.’ Resp. to Pl.’s Sep. Statement of Und. Facts (“Resp.

SUF”) ¶ 15.) Under the policy, CCIC is obligated to “pay on

behalf of the Insured all Damages and Claims Expense2 that the

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2(...continued)

benefit expenses associated with any Insured, or any amount

covered by the duty to defend obligation of any other insurer.”

(Resp. SUF ¶ 18.) 

3

Insured shall become legally obligated to pay, arising from any

claim first made against an Insured during the Policy Period and

reported to the Insurer in writing during the Policy Period or

within 60 days thereafter for any Wrongful Act . . ..” (Resp.

SUF ¶ 16; CCIC Lawyers’ Professional Liability Insurance Policy

No. 96000832 / 1 (the “Policy”), Ex. D to the Dec. of Carol Weill

in Supp. Summ. J. at 2.) Section VI of the agreement provides:

A. An Insured shall not admit liability for, enter

into any settlement agreement, stipulate to any

judgment, agree to arbitration, or incur Claims Expense

without the Insurer’s prior written consent. The

Insurer’s consent shall not be unreasonably withheld,

provided that the Insurer shall be entitled to full

information and all particulars it may request in

order to reach a decision regarding such consent.

Any Damages and/or Claims Expense incurred

and settlements agreed to prior to the Insurer giving

its consent shall not be covered hereunder.

B. The Insurer shall have the right and duty to defend

any Claim to which this insurance applies, even if any

allegations of the Claim are groundless, false or

fraudulent. The Insurer’s right and duty to defend

any Claim shall end when the Insurer’s applicable Limit

of Liability has been exhausted by payment of Damages

and/or Claims Expense, or has been tendered to, or on

behalf of, the Insured, or to a Court of competent

jurisdiction. 

C. Each Insured shall cooperate with the Insurer in

the defense and settlement of any Claim, and in

enforcing any right of contribution or indemnity

against any person or organization that may be liable

to the Insured, at no cost to the Insurer. Upon the

request of the Insurer, the Insured shall submit to

examination and interrogation, under oath if required

by a representative of the Insurer, and shall attend

hearings, depositions and trials, assist in effecting

settlement, securing and giving evidence, obtaining

the attendance of witnesses, as well as giving written

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4

statement(s) to the Insurer’s representatives, and

meeting with such representatives for purposes of

investigation or defense, all without charge to the

Insurer.

(Resp. SUF ¶ 17; CCIC Policy at 5.) The policy provides

that defendants have a deductible of $ 50,000.00. (Resp.

SUF ¶ 20.) The deductible applies to “each and every

claim,” and CCIC is only liable “for the amount of Damages

and/or Claims Expense arising from a Claim which is in

excess of the deductible amount . . ..” (Resp. SUF ¶ 19.) 

The insured “shall, upon written demand of the Insurer,” pay

the deductible within 30 days. (Resp. SUF ¶ 19.) 

On or about June 23, 2003, Derek Vanacore (“Vanacore”),

a former client of BWG and Bolling, filed a complaint

against defendants in Sacramento County Superior Court (the

“Vanacore action”). (Resp. SUF ¶¶ 1-5.) The complaint

alleges causes of action for malpractice and breach of

contract. (Resp. SUF ¶ 6.) 

By letter dated April 21, 2004, BWG sent notice of the

Vanacore action to Monitor Liability Managers, Inc.

(“Monitor”), which is responsible for managing claims

against CCIC’s insureds. (Resp. SUF ¶ 7; April 21, 2004

letter from John Coleman to James Hill at 2, Ex. E to Weill

Dec.) In the letter, BWG also states that “[we] . . . would

like to defend ourselves for the time being and charge

against our deductible at the rate of $175 per hour.” (Id.) 

By letter dated May 12, 2004, Monitor rejected

defendants’ request to defend themselves, stating that

“Monitor would like to retain defense counsel to defend this

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5

Claim.” (Resp. SUF ¶ 8; May 12, 2004 from Melissa De Grazia

to John Coleman, Ex. F to Weill Dec.) Monitor further

stated that “[p]er the terms of the policy, Monitor has the

right to defend any suit against the Insured seeking damages

to which the Policy applies.” (Id.) Defendants have

continued to conduct their own defense in the Vanacore

action. (SAF ¶ 21.) 

On November 17, 2004, CCIC filed the instant complaint

seeking a declaratory judgment that CCIC has a right to

control the identity of defense counsel in the Vanacore

action and is entitled to replace BWG with counsel of CCIC’s

choosing. (Comp. ¶ 24.) Alternatively, if the court does

not grant CCIC’s request for a declaratory judgment that it

is entitled to replace BWG with counsel of its choosing,

CCIC requests a declaratory judgment that it is not

obligated to defend or indemnify defendants in the Vanacore

action. (Comp. ¶¶ 6, 12.) 

Defendants indicate that they “are unwilling to pay

their $ 50,000.00 deductible to defend a frivolous claim.” 

(Defs.’ Mem. Opp’n Summ. J. (“Defs.’ Opp’n”) at 4.) 

Defendants contend that they are entitled to defend

themselves, at least until their $ 50,000.00 deductible is

exhausted. However, “in the unlikely event that Vanacore

were to recover a judgment, BWG and Bolling would expect

CCIC to pay the judgment on their behalf up to the policy

limit.” (Defs.’ Opp’n at 4.)

/////

/////

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6

STANDARD 

The Federal Rules of Civil Procedure provide for

summary adjudication when “the pleadings, depositions,

answers to interrogatories, and admissions on file, together

with affidavits, if any, show that there is no genuine issue

as to any material fact and that the moving party is

entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). One of the principal purposes of the rule is to

dispose of factually unsupported claims or defenses. 

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

Where the moving party will have the burden of proof on

an issue at trial, it must affirmatively demonstrate that no

reasonable trier of fact could find other than for the

moving party. See Celotex Corp., 477 U.S. at 323-24. The

court must examine all the evidence in the light most

favorable to the non-moving party. United States v.

Diebold, Inc., 369 U.S. 654, 655 (1962). 

In judging evidence at the summary judgment stage, the

court does not make credibility determinations or weigh

conflicting evidence. See T.W. Elec. v. Pacific Elec.

Contractors Ass’n, 809 F.2d 626, 630-31 (9th Cir. 1987)

(citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio

Corp., 475 U.S. 574, 587 (1986)). The evidence presented by

the parties must be admissible. Fed. R. Civ. P. 56(e). 

Conclusory, speculative testimony in affidavits and moving

papers is insufficient to raise genuine issues of fact and

defeat summary judgment. See Falls Riverway Realty, Inc. v.

City of Niagara Falls, 754 F.2d 49, 57 (2d Cir. 1985);

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7

Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738

(9th Cir. 1979).

ANALYSIS

I. Jurisdiction

Prior to reaching the merits, the court must address

defendants’ objections to this court’s exercise of

jurisdiction over plaintiff’s complaint, which prays solely

for declaratory relief. 

The Declaratory Judgment Act provides, in relevant

part,

In a case of actual controversy within its

jurisdiction, [subject to exceptions not applicable

here] . . . any court of the United States, upon the

filing of an appropriate pleading, may declare the

rights and other legal relations of any interested

party seeking such declaration, whether or not further

relief is or could be sought. Any such declaration

shall have the force and effect of a final judgment or

decree and shall be reviewable as such.

28 U.S.C. § 2201(a). The Declaratory Judgment Act “was

enacted to afford an added remedy to one who is uncertain of

his rights and who desires an early adjudication without

having to wait until he is sued by his adversary.” Plum

Creek Timber Co. Inc. v. Trout Unlimited, 255 F. Supp. 2d

1159, 1164 (D. Idaho 2003)(quoting Levin Metals Corp. v.

Parr-Richmond Terminal Co., 799 F.2d 1312, 1315 (9th Cir.

1986).)

A lawsuit seeking federal declaratory relief must first

present an actual case or controversy within the meaning of

Article III, section 2 of the United States Constitution and

must fulfill statutory jurisdictional prerequisites. 

Government Employees Ins. Co. v. Dizol, 133 F.3d 1220,

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1222-1223 (9th Cir. 1998)(en banc)(citations omitted). The

Declaratory Judgment Act does not itself confer federal

subject matter jurisdiction but rather, there must be an

independent basis for such jurisdiction. Staacke v. United

States Secretary of Labor, 841 F.2d 278, 280 (9th Cir.

1988). Here, subject matter jurisdiction is properly

predicated on diversity of citizenship. See 28 U.S.C. §

1332. 

However, even when subject matter jurisdiction exists,

the district court may, in the exercise of its discretion,

decline to entertain the action. Dizol, 133 F.3d at 1223

(noting that the Declaratory Judgment Act is “deliberately

cast in terms of permissive, rather than mandatory,

authority.”) There is “no presumption in favor of

abstention in declaratory actions generally, nor in

insurance coverage cases specifically.” Id. (stating that

“[w]e know of no authority for the proposition that an

insurer is barred from invoking diversity jurisdiction to

bring a declaratory judgment action against an insured on an

issue of coverage.”) 

Defendants contend that this case does not satisfy

Article III’s Case and Controversy requirement because it is

not yet ripe for judicial review. In addition, defendants

ask this court to abstain from exercising jurisdiction over

the matter under Brillhart v. Excess Ins. Co. of America,

316 U.S. 491 (1942). 

A. Ripeness

The court first addresses defendants’ contention that

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3 The court notes that this is not actually a “ripeness”

argument. While both ripeness and mootness are constitutional

case or controversy requirements, ripeness “refers to whether an

action is unfit for review due to its prematurity, [whereas] the

mootness doctrine focuses on what has happened since the action

was initiated” which would eliminate the previously-live

controversy between the parties. See 15 James Wm. Moore et al.,

Moore’s Federal Practice ¶ 101.90 (3d ed. 2005.)

9

the present controversy is not yet ripe for review because

(1) defendants will not in any event surrender defense in

the underlying action rendering any decision by this court

moot, and (2) CCIC’s second claim for a declaratory judgment

that CCIC owes no duty to indemnify defendants, “is

speculative and hypothetical in that any ‘harm’ to plaintiff

as a result of the insureds’ alleged breach of the

cooperation clause cannot be determined until final

disposition of the underlying tort action.” (Defs.’ Mem.

Opp’n Summ. J. (“Opp’n”) at 18.)

Initially, defendants’ assertion that they will not

surrender the defense in the underlying action does not

render a declaratory judgment moot.3 If this court finds

and declares that CCIC has a right to control the defense of

the Vanacore action and select defense counsel, and

defendants thereafter refuse to surrender control of the

defense, CCIC can use the judgment of this court as a

defense in any later-filed coverage dispute. Thus, whether

defendants actually surrender the defense does not render

moot the present controversy. 

Defendants’ second ripeness argument also fails because

CCIC has not moved for summary judgment as to its second,

alternative claim for relief. By this motion, CCIC does not

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seek a judicial determination that the Policy’s cooperation

clause has been breached. Rather, it seeks only a

determination that it is entitled to control the defense and

the identity of defense counsel. This question presents a

“substantial controversy, between parties having adverse

legal interests, of sufficient immediacy and reality to

warrant the issuance of a declaratory judgment.” Maryland

Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273

(1941); Hillblom v. United States, 869 F.2d 426, 430 (9th

Cir. 1990). Accordingly, the court finds the case ripe for

review.

B. Abstention

Defendants next contend that the court should use its

discretion to decline jurisdiction over plaintiff’s

declaratory judgment action. Even when subject matter

jurisdiction exists, the district court may, in the exercise

of its discretion, decline to entertain an action for

declaratory relief. Dizol, 133 F.3d at 1223. A court’s

decision to abstain from entertaining such a suit must be

based on more than “whim or personal disinclination.” Id.

(quoting Public Affairs Associates v. Rickover, 369 U.S.

111, 112 (1962). The Ninth Circuit has concluded that the

factors articulated in Brillhart v. Excess Ins. Co. of

America, 316 U.S. 491 (1942), remain the “philosophic

touchstone for the district court.” Id. As summarized by

the Ninth Circuit in Dizol, the relevant factors are:

The district court should avoid needless determination

of state law issues; it should discourage litigants

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from filing declaratory relief actions as a means of

forum shopping; and it should avoid duplicative

litigation. If there are parallel state proceedings

involving the same issues and parties pending at the

time the federal declaratory action is filed, there is

a presumption that the entire suit should be heard in

state court. The pendency of a state court action does

not, of itself, require a district court to refuse

federal declaratory relief. Nonetheless, federal

courts should generally decline to entertain reactive

declaratory actions.

Dizol, 133 F.3d at 1225 (internal quotations and citations

omitted). 

1. Avoiding Needless Decisions of State Law

When the sole basis for federal jurisdiction is

diversity of citizenship, “the federal interest is at its

nadir and the Brillhart policy of avoiding unnecessary

declarations of state law is especially strong.” 

Continental Cas. Co. v. Robsac Indus., 947 F.2d 1367, 1371

(9th Cir. 1991), overruled on other grounds by Dizol, 133

F.3d at 1227). However, the instant dispute does not

require this court to decide novel questions of state law. 

To the contrary, the parties’ dispute requires

interpretation of the Policy. While this analysis is

governed by state law, the principles of contract

interpretation are well settled, and there is no state court

currently in a position to rule on the matter. 

 2. Avoiding Forum Shopping and Duplicative Litigation

“The federal Courts should generally decline to

entertain reactive declaratory actions.” Dizol, 133 F.3d at

1225. The Ninth Circuit has explained that a “declaratory

judgment action by an insurance company against its insured

during the pendency of a non-removable state court action

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presenting the same issues of state law is an archetype of

what we have termed ‘reactive’ litigation.” Robsac, 947 F.2d

at 1372-1373. Here, CCIC’s claim is not reactive as it does

not present any of the same issues involved in the Vanacore

action. In the latter case, the two causes of action are

malpractice and breach of the legal services contract. By

contrast, this complaint requires interpretation of an

entirely different contract, the Policy issued to BWG by

CCIC. The only direct impact the resolution of this case

will have on the underlying litigation is the identity of

defense counsel. This distinguishes the present case from

the cases primarily relied on by defendants, American

National Fire Ins. CO. v. Hungerford, 53 F.3d 1012 (9th Cir.

1995), overruled in part by Dizol, 133 F.3d at 1227, and

Employers Reinsurance Corp. v. Karussos, 65 F.3d 796 (9th

Cir. 1995), overruled in part by Dizol, 133 F.3d at 1227. 

Both Hungerford and Karussos involved coverage disputes

which required for their resolution factual determinations

in the underlying cases. See Hungerford, 53 F.3d at 1017

(“a declaratory judgment in this case would not terminate

the existing controversy because ‘the policy exclusions can

be applied only in light of factual determinations that have

not been made [by the state court].”); Karussos, 65 F.3d at

800 n.2 (“Plainly, such a determination could be made only

after considering issues involved in the state court

proceedings.”). 

Defendants cite Karussos for the proposition that it

does not matter whether the same issues are involved in the

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state and federal cases. Karussos stated that “Hungerford

applies whether or not there is a similarity of issues.” 65

F.3d at 801. CCIC correctly points out that this language

is dicta because in Karussos there was similarity of issues. 

Moreover, the broad language from Karussos is inconsistent

with the Ninth Circuit’s more recent Dizol opinion, in which

the court explained that “pendency of a state court action

does not, of itself, require the district court to refuse

federal declaratory relief.” Id. at 1225. Rather, the

presumption against exercising jurisdiction arises in cases

where “there are parallel state proceedings involving the

same issues and parties pending at the time the federal

declaratory action is filed . . ..” Id. (emphasis added). 

The broad dicta from Karussos would read out of the rule the

requirement that the federal and state proceedings be

parallel, involving the same issues and parties. 

Moreover, Karussos’ broad language would preclude

district courts from entertaining coverage disputes whenever

a liability claim was pending in state court. This too is

inconsistent with Dizol, which provides that “there is no

presumption in favor of abstention in declaratory actions

generally, nor in insurance cases specifically. ‘We know of

no authority for the proposition that an insurer is barred

from invoking diversity jurisdiction to bring a declaratory

judgment a action against an insured on the issue of

coverage.’” Id. (citing Aetna Cas. & Sur. Co. v. Merritt,

974 F.2d 1196, 1199 (9th Cir. 1992)). As a result, the

court will follow the analysis set forth by the Ninth

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4 Defendants final jurisdictional argument, that this

court cannot determine if defendants have breached the

cooperation clause in the Policy until the underlying dispute is

resolved, is not well taken. CCIC does not move for summary

judgment on its alternative request for a declaration that

defendants are in breach of the Policy’s cooperation clause. 

Resolution of the issues properly before the court – whether CCIC

has a right to control the defense and select defense counsel –

is not contingent on the outcome of the Vanacore action. 

14

Circuit in Dizol. 

3. Judicial Economy

Finally, judicial economy clearly is served by this

court’s resolution of the instant dispute. The parties have

fully briefed the merits of the case, and this court is

prepared to rule thereon. If this court were to abstain,

CCIC would be required to start over by filing a new

complaint in state court, which would needlessly delay

resolution of the issues presented, and would require the

state court to expend time and resources becoming familiar

with the factual and legal issues involved. 

Because the Brillhart factors weigh heavily in favor of

jurisdiction, the court will exercise its discretion to

assume jurisdiction over the instant declaratory judgment

action.4 

II. Merits

CCIC contends that, based on California law and the

terms of the Policy, it has the right to control the defense

and select defense counsel. Defendants provide no argument

whatsoever in opposition, apparently relying instead on

their attack on jurisdiction. However, defendants assert,

without legal support or argument, that they are entitled to

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5 While defendants note that the action is frivolous,

they also acknowledge that, in the event Vanacore were to obtain

a judgment against defendants, they would seek indemnification

from CCIC. 

15

control the defense of the Vanacore action until their 

$50,000.00 deductible is exhausted.

The court finds that the Policy provides CCIC with the

right to select defense counsel and to control the

litigation. First and most importantly, the Policy provides

that “the Insurer shall have the right and duty to defend

any Claim to which this insurance applies, even if any

allegations of the Claim are groundless, false or

fraudulent.” Both parties agree that the Policy applies to

the Vanacore action.5 Thus, by the express terms the

Policy, CCIC has a right and duty to defend the Vanacore

action. The right and duty to defend affords an insurer the

right to control the defense. See Safeco Ins. Co. v.

Superior Court, 71 Cal. App. 4th 782, 787 (1999)(“When the

insurer provides a defense to its insured, the insured has

no right to interfere with the insurer’s control of the

defense . . ..”)(citing Wright v. Fireman's Fund Ins.

Companies, 11 Cal. App. 4th 998, 1024 (1992); Pruyn v.

Agricultural Ins. Co., 36 Cal. App. 4th 500, 515-516

(1995)).

The remaining question is whether the right to control

the defense also entitles CCIC to select defense counsel. 

While the Policy does not expressly state that CCIC has a

right to select defense counsel, the right to control the

defense generally includes the right to select defense

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counsel. See generally State Farm Mutual Automobile Ins.

Co. v. Federal Ins. Co., 72 Cal. App. 4th 1422, 1429 (1999). 

A contrary rule would be inconsistent with the insurer’s

right to control the defense and would place the insurer in

the untenable position of being financially liable, but

powerless to ensure the claim is properly defended. See

e.g., James Finley and Vanida Finley v. The Home Ins. Co.

And Hawaii Ins. Guar. Ass’n, 90 Haw. 25, 31-32 n.9 (1998)

(“Because of their financial stake in effective claims

resolution, insurers have a contractual right to control

their insureds’ defenses . . ..”)(citations and internal

quotations omitted); Davenport v. St. Paul Fire and Marine

Ins. Co., 978 F.2d 927 (5th Cir. 1992)(“Because the

[insurance] company is footing the bill for the defense, and

will be obligated to pay any judgment rendered . . ., it is

clearly entitled to select the attorney and conduct the

defense.”) 

Defendants’ position that they have a right to defend

themselves up to the amount of their $ 50,000.00 deductible

defies a common sense reading of the insurance contract. 

According to defendants’ interpretation, CCIC’s right to

control the defense would vest after the litigation process

is well underway – after litigation strategy had been

developed, discovery initiated or perhaps completed, and

potentially adverse irrevocable decisions made to which the

insurer would be bound. The contract yields no such

interpretation. 

Read as a whole, the Policy clearly envisions that

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6 CCIC requests a further declaration that “BW&G is

required to cooperate with defense counsel and pay the new

defense counsel until the $ 50,000.00 deductible is exhausted.” 

(Pl.’s Mem. at 16.) CCIC does not provide any argument to

(continued...)

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CCIC, and not defendants, will select defense counsel. The

Policy provides that the insured “shall not . . . incur

Claims Expense without the insurer’s prior written consent.” 

“Claims Expense” expressly includes attorneys fees. These

Policy provisions clearly vest CCIC with authority over any

claims-related expense, whether incurred before or after the

deductible is exhausted. Thus, defendants cannot “charge

[attorneys fees] against [their] deductible” without prior

written approval. (Resp. SUF ¶ 7.)

Based on the foregoing, and in light of defendants’

failure to submit any argument in opposition to CCIC’s

construction of the Policy terms, the court finds that there

is no triable issue of fact and that, as a matter of law,

CCIC is entitled to a declaratory judgment that CCIC has a

right to control the defense of the Vanacore action and to

select defense counsel. 

CONCLUSION 

For the foregoing reasons, CCIC’s motion for summary

judgment is GRANTED. The court decrees and declares as

follows:

 (1) Pursuant to the Policy, CCIC is entitled to control

the defense of, and select defense counsel in, the Vanacore

action, Sacramento County Superior Court case no.

03AS03501.6

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6(...continued)

support its request for either declaration. CCIC also requests a

declaration that “the amounts incurred by BW&G in self-defending

do not count towards the satisfaction of the deductible, as they

were not consented to by CCIC.” However, CCIC did not request

this relief in the complaint. (See Complaint at 12.) 

Accordingly, the court makes no order as to these requests. 

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 (2) Any expenses incurred by defendants to self-defend

the Vanacore action, for which defendants did not receive

prior written approval from CCIC, cannot be chargeable

against defendants’ deductible as “Claims Expenses” under

the Policy.

 IT IS SO ORDERED.

DATED: May 31, 2005

/s/ Frank C. Damrell Jr. 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

Case 2:04-cv-02445-FCD-PAN Document 18 Filed 06/01/05 Page 18 of 18