Morgan Lewis Maximizes Insurance Recovery for Client PhotoMedex

Morgan Lewis achieved a significant choice of law victory for policyholder client PhotoMedex, maximizing its ability to recover defense costs.

Policyholders frequently fight to enforce an insurer's duty to defend an underlying claim only to find the insurer refusing to pay reasonable attorneys' fees. Morgan Lewis insurance recovery lawyers Richard F. McMenamin and Carol C. Carty successfully stopped PhotoMedex's insurer from limiting the reimbursement of underlying defense fees to the amount the insurer paid in similar situations as set forth in Section 2860 of the California Civil Code, commonly known as the Cumis statute.

In a 44 page Memorandum and Order issued by Judge William H. Yohn, Jr. of the United States District Court for the Eastern District of Pennsylvania, the court agreed with PhotoMedex's position that Pennsylvania law not California law applies to construction of the PhotoMedex policy. The court held that under Pennsylvania law (a) PhotoMedex was entitled to its reasonable attorneys' fees and not simply the amount that insurers pay in similar situations, and (b) St. Paul had no right to recoup indemnity payments it "advanced" to settle the underlying claim against PhotoMedex.