Arizona Appellate Court Refuses To Vitiate the Attorney-Client Privilege When Insurer Does Not Advance Defense Based on Advice of Counsel

In Everest Indemnity Insurance Co. v. Rea, 2015 Ariz. App. LEXIS 9 (Ariz. Ct. App. Jan. 15, 2015), an Arizona appellate court held that Everest Indemnity Insurance Company (“Everest”) had not waived its attorney-client privilege by admitting that it had settled a case in good faith after consulting with counsel. As background, Rudolfo Brothers Plastering and Western Agriculture Insurance Company (collectively “Rudolfo”) alleged that Everest committed bad faith by entering into a settlement agreement that exhausted the liability coverage of an Owner Controlled Insurance …

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