Opinion ID: 684867
Heading Depth: 3
Heading Rank: 7

Heading: Attorneys' fees as a claim for damages

Text: 55 LSC contends that an award of attorneys' fees would constitute an ultimate net loss under the umbrella policies. The definition of ultimate net loss does not include any expense of defense which any underlying insurer has paid or incurred or is obligated to pay either on its own behalf or on behalf of the insured. LSC argues that ultimate net loss excludes litigation expenses incurred by the insurer for itself and its insured, but is silent about litigation expenses incurred by the insured's opponent. Therefore, LSC argues that those fees are covered. 56 An attorneys fees request does not trigger a claim for damages and result in coverage under the policies. Attorneys' fees will compensate plaintiffs in the underlying action for the costs of litigation, not compensate them for a covered injury. Claims for attorneys' fees and costs do not qualify as damages as they are not amounts paid to compensate a party for a covered injury. See School District of Shorewood v. Wausau Ins. Co., 488 N.W.2d 82 (Wis.1992); Home Indem. Co. v. Avol, 706 F.Supp. 728, 729, n. 2 (C.D.Cal.1989), aff'd, 912 F.2d 469 (9th Cir.1990); City of Ypsilanti v. Appalachian Ins. Co., 547 F.Supp. 823 (E.D.Mich.1982), aff'd, 725 F.2d 682 (6th Cir.1983); Sokolowski v. Aetna Life & Cas. Co., 670 F.Supp. 1199 (S.D.N.Y.1987).