Opinion ID: 2576430
Heading Depth: 3
Heading Rank: 1

Heading: The Applicability of Chatterton v. Walker

Text: ¶19 In issuing its appointment order, the district court accepted, at least to some degree, Judd's contention below that our decision in Chatterton requires TDC to provide or finance independent counsel for Drezga in the declaratory action. Chatterton involved a suit against an uninsured motorist filed by an individual who sustained damages in an automobile accident. Id. at 256. The uninsured motorist had apparently left the state and was therefore served by publication. Id. at 256-57. The plaintiff's insurance company sought leave to intervene in the action, claiming that a judgment against the uninsured motorist would render it liable to the plaintiff under the uninsured motorist provision of the insurance contract. Id. After intervention was granted, the insurance company answered the plaintiff's complaint and asserted that the plaintiff, its own insured, was partially liable for the accident due to malfunctioning brake lights. Id. at 257. In other words, in Chatterton, the insurance company took a position adverse to its insured on the very subject upon which it had a contractual duty to defend its insured, specifically, the insured's liability for the accident. To remedy the conflict created by the insurance company's intervention, we held that the insurance company could be required to provide or finance independent representation of the insured. Id. at 262. However, we went on to state that [t]he provision of counsel or reimbursement of expenses should be directly related to litigation of the issue of the uninsured motorist's negligence and the damages resulting from that negligence and should not implicate collateral issues relating to the insurer's intervention. Id. ¶20 TDC argues that our holding in Chatterton is limited to those situations where an insurance company is adverse to its insured as to an issue implicating the insurance company's contractual duty to defend the insured, a situation unlike the present case. We agree. ¶21 The present case presents a type of conflict entirely different from that at issue in Chatterton. Unlike the situation in Chatterton, TDC's efforts to declare the insurance contract void do not necessarily implicate a contractual duty on the part of TDC to defend Drezga in the declaratory action. In other words, in the declaratory action, the insurer is not necessarily playing the role of accuser and defender simultaneously. Rather, the dispute is centered on whether insurance coverage even exists. Consequently, we conclude that Chatterton is not directly applicable to the present situation and neither meaningfully supports nor undermines the appointment decision made by the district court. ¶22 Judd, in her brief before this court, acknowledges as much, referring to Chatterton as a red herring and relying primarily on the district court's inherent appointment power in advocating the propriety of Burke's appointment. Consistent with Judd's current argument, the record reveals that the district court did not rely solely on Chatterton when issuing the appointment order. For example, when denying TDC's request that the appointment order be reconsidered, the district court stated that [t]he Court is confident that fair play and the interest of justice, as well as the legal reasons set forth in the Court's prior opinions, dictate that counsel be appointed. (Emphasis added.) Because we conclude that Chatterton has little, if any, application to the present controversy, we now examine whether the district court's order can be justified as an exercise of the court's inherent appointment power.