Whether an insured is entitled to select its own counsel in defense is a tricky proposition that may require careful analysis. Under Texas law, it is well settled that an insurer’s right to conduct the defense includes the authority to select the attorney who will defend the claim and to make other decisions that would normally be vested in the insured as the named party in the case. N. County Mut. Ins. Co. v. Davalos, 140 S.W.3d 685, 688 (Tex. 2004). However, under certain circumstances, an insurer may not insist upon its contractual right to control the defense. In a typical coverage dispute, an insurer may issue a reservation of rights letter, which creates a potential conflict of interest. While not automatically creating a conflict, a reservation rights letter recognizes the possibility that a conflict between insured and insurer may arise in the future. Unauthorized Practice of Law Comm. v. Am. Home Assur. Co., 261 S.W.3d 24, 40 (Tex. 2008). And when the facts to be adjudicated in the liability lawsuit are the … Continue reading →
