Opinion ID: 2300693
Heading Depth: 1
Heading Rank: 4

Heading: Travelers' Alleged Ratification of the Independent Counsel

Text: Quality Concrete additionally contends that Travelers ratified its engagement of independent counsel by not objecting to the fact that the insured had engaged independent counsel. [4] Specifically, Quality Concrete states that it notified Travelers on several occasions (1) that Quality Concrete believed that a conflict of interest existed and (2) that it had hired independent counsel to represent it; additionally, Quality Concrete notes that it submitted legal bills to Travelers with respect to that representation and that Quality Concrete's independent counsel referred to himself as  Beals Counsel in communications with Travelers. According to Quality Concrete, Travelers responded by denying the existence of a conflict of interest, but without ever explicitly accepting or rejecting Quality Concrete's position. As a result, Quality Concrete contends that Travelers unreasonably withheld approving Quality Concrete's hiring of independent counsel and that its subsequent conduct and inclusion of the insured's independent counsel in the settlement process constitutes approval by ratification. As a general rule, the engagement of an independent counsel to represent the insured should be approved by the insurer.  Beals, 103 R.I. at 635, 240 A.2d at 404 (emphasis added). At no time did any such approval emanate from Travelers with respect to the matter involving the decedent's estate. And, as we have held in Section III A, supra, Travelers was not legally obliged to pay for the representation of Quality Concrete by independent counsel. Moreover, Travelers had specifically advised Quality Concrete that it might wish to consult with personal counsel (at your own expense) to discuss a possible future claim for punitive damages. Also, we fail to see how the fact that Travelers did not object when Quality Concrete's independent counsel attended the settlement negotiations somehow ratified Quality Concrete's position that it was entitled to have its independent counsel paid for by Travelers. In our judgment, Quality Concrete's argument regarding ratification is without merit.