Nevada Has Not Adopted Cumis

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“He who pays the piper, calls the tune”.  While this adage may be true at a county fair, it has no place in the practice of law.  Attorneys owe a primary duty to their client, no matter who pays the bill, be it a parent, spouse, friend, or insurance company.  Just because the insurance company pays the attorney to defend its insured, the attorney’s primary duty is to the client not the carrier.

Sometimes conflicts between the insured and the carrier arise when the carrier defends an insured under a reservation of rights.  While the carrier is fulfilling its duty to defend the insured it is also questioning its duty to indemnify.  If a conflict arises between the insured and the carrier, the attorney must protect the insured interests, by assiduously avoiding any involvement in any coverage issue; concentrating on the liability and damages involved in the claim; and advising the client to retain independent counsel.

Probably the most important question is:  Who will pay for that independent counsel?  Some states require the insurance company to pay the cost of that second independent counsel.  For example in the case of the California Courts in San Diego Navy Federal Credit Union v. Cumis Ins. Society, Inc.  162 Cal. App. 3d 358 (1984) the California Court said that an insurer had an obligation to pay for independent counsel when a conflict arose, the outcome of which could affect the attorney’s action.  It is this case that gives the name of Cumis counsel to attorneys that are paid by the insurance company to represent an insured when a coverage conflict arises.  California later codified the scope of Cumis counsel at California Civil Code §2860.  Other states have adopted the concept of Cumis counsel, including Alaska, Arizona, Illinois, Maryland, Massachusetts, New York, Rhode Island, Texas, Ohio, and Vermont.  Nevada has neither adopted nor rejected the Cumis counsel requirement.

However, in situations where conflicts like these exist, assigned defense counsel will encourage the client to seek independent advice whether paid for by the insured or by the carrier.