I’ve never seen this duty to defend issue addressed.  And since there’s so much duty to defend case law, its unusual to see something new.  It’s a very brief decision, but the court didn’t need to say a lot to make its point.

Travelers retained counsel and defended Kathleen March, Patrick Bright and Walking U Ranch LLC is an “underlying property dispute.”  [That was the extent of the court’s description of the case.]  March and Bright are attorneys and performed some legal work on the case.  They sought to be paid for their efforts.  The brief opinion does not say what they did nor the nature of the work performed.  It’s not relevant to the issue, but it would have been interesting to see.

A California district court held that March and Bright were not entitled to recover their fees and the Ninth Circuit agreed.  The court cited a few rationales for its decision.

First, as a general principle, under California law, attorneys may not recover fees for work that they perform representing themselves.  The court then took that general principle and concluded that it also barred self-represented attorneys from recovering fees from insurers that have a duty to represent them.

The court also concluded that March and Bright could not recover their fees because they performed work on behalf of attorneys that Travelers had appointed to represent them.  “Attorneys,” the court concluded, “may not circumvent the restriction on fees for self-representation by hiring a ‘straw man’ attorney to nominally represent them while they do all the work.”

Their last argument was the most interesting and seemed to me, at least on paper, to be their strongest to get around the general principle that self-represented attorneys may not recover their fees.  But it was rejected by the court as being based on a fiction:      

“March and Bright argue that they are entitled to attorney's fees because they represented Walking U Ranch, LLC, a distinct legal entity. Under California law, however, attorneys may not recover for work performed only on behalf of themselves and another party with identical interests. . . . March and Bright are married, and are the sole owners of Walking U Ranch, LLC. The Insureds therefore all shared the same interest in the outcome of the underlying action. There is also no indication that March or Bright spent any extra time in the underlying action representing Walking U Ranch, LLC rather than themselves.”