Intergulf Development v. Superior Court

In Intergulf Development v. Superior Court (2010) 183 Cal.App.4th 16, the Court reversed an order requiring the parties to arbitrate under Civil Code subdivision (c) of section 2860 after the insurer waited about eight months to accept the tender of defense but allegedly refused to appoint Cumis counsel to represent the insured in the underlying construction defect action. (Intergulf, supra, 183 Cal.App.4th at p. 18.) After the insured filed a bad faith action and shortly before trial on that action, the insurer moved to compel arbitration under subdivision (c) of section 2860, characterizing the dispute between it and the insured as a " 'Cumis Fee Dispute.' " (183 Cal.App.4th at p. 19.) In connection with its petition, the insurer in Intergulf argued that the insured's counsel had charged legal fees far in excess of those actually paid by the insurer in the normal course of business. The trial court in Intergulf granted the insurer's motion to compel arbitration. (Intergulf, supra, 183 Cal.App.4th at pp. 19-20.) The Court summarily denied the insured's petition for writ of mandate. However, our Supreme Court granted the insured's petition for review and transferred the matter back to this court with directions to vacate the order denying mandate and issue an order to show cause why the relief sought should not be granted. (Id. at p. 20.)