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What Is The Time for Responding to a Defense Tender?

No addressed in Mississippi case law or by statute.

Does Reserving Rights Create a Conflict of Interest?

Yes. Moeller v. Am. Guar. & Liab. Ins. Co., 707 So.2d 1062, 1065 (Miss. 1996).

Does a Reservation of Rights Create Additional Duties?

None found.

What Must Be Done If A Conflict of Interest Exists?

The insurer is obligated to permit the insured to select his or her own individual counsel with the fees and costs to be paid by the insurer.  Liberty Mut. Ins. Co. v. Tedford, 658 F.Supp. 2d 786, 794 (N.D.Miss. 2009) (Mississippi law).

Who Is Responsible for Fees of Independent Counsel?

Insurer. See above.

What Are Independent Counsel’s Obligations?

No discussion in case law or statue.

What Settlement Duties Exist?

When attorney, who is representing insurer and insured in action by accident victim to recover under policy for injuries, receives offer to settle within policy limits, attorney should attempt to halt trial proceedings until decision on settlement offer has been made by his clients so that no trial development will harm either client, and attorney must then fully inform each client of terms of settlement offer. Hartford Accident & Indem. Co. v. Foster, 528 So.2d 255, 270 (Miss. 1988). 

What Actions May Result in a Claim for Bad Faith?

Mississippi recognizes the tort of bad faith regarding insurance coverage determinations in first-party contracts. Mississippi bad faith damages are considered an extraordinary remedy and are allowed “with caution and within narrow limits.”  Standard Life Ins. Co. v. Veal, 354 So. 2d 239, 247 (Miss. 1978) (Sugg, J., concurring).

Under Mississippi law, for an insured to recover more than policy benefits plus interest, the plaintiff must prove: (1) an intentional refusal by the insurance company to pay with reasonable promptness the insured’s claim and (2) the absence of any arguable reason for the insurance company’s refusal to pay with reasonable promptness. Blue Cross & Blue Shield, Inc. v. Campbell, 466 So. 2d 833, 847 (Miss. 1985) (Robertson, J., concurring).

 Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?

Attorneys’ fees would be appropriate where a claim or defense was raised for purposes of harassment or delay or a party acted to unreasonably protract the proceedings or where an insurer is without an arguable basis to deny a claim, but whose conduct did fall short of malicious.  Garner v. Hickman, 733 So. 2d 191, 198 (Miss. 1999).

Are Punitive Damages Recoverable in Insurer-Insured Dispute?

The Mississippi Supreme Court has stated that “any plaintiff asking for punitive damages or any special or extraordinary damages based on bad faith of an insurance company has [bears] a heavy burden.” Blue Cross & Blue Shield of Mississippi v. Campbell, 466 So. 2d 833, 842 (Miss. 1984).

Alternative Coverage Options

An insurer has the long-standing right to bring an action for a declaratory judgment that a policy does not cover a particular claim.  Lewis v. Allstate Ins. Co, 730 So. 2d 65, 71 (Miss. 1998).

Relevant Statutes

Declaratory Judgment

“Courts of record within their respective jurisdictions, may declare, rights, status, and other legal relations regardless of whether further relief is or could be claimed.  The court may refuse to render or enter a declaratory judgment where such judgment, if entered, would not terminate the uncertainty or controversy giving rise to the proceeding…”  Miss.R.Civ.P. 57(a).

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