Insurers Can Seek Reimbursement of Defense Costs for Claims Not Potentially Covered by a Commercial General Liability Policy

In Buss v. The Superior Court, 97 Daily Journal D.A.R. 9414 (July 24, 1997), the California Supreme Court ruled that in a "mixed" lawsuit, where there are potentially covered and uncovered claims an insurer can seek reimbursement from an insured for defense costs that the insurer can show, by a preponderance of the evidence, were solely related to the defense of claims that were not potentially covered under the policy.

Jerry Buss, owner of the Lost Angeles Lakers, and others were sued by H&H Sports, inc. (Sports) because of Buss' alleged unilateral termination of the business relationship with Sports. Sports provided certain advertising and other services to Buss in connection with the production of sporting events. Sports alleged 27 causes of action, including claims for breach of contract, fraud, intentional interference with economic relations and conversion, and requested $297 million in damages.

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