A recent Law 360 story by Hope Patti, “Insurer Says It Controls Defense in Fox’s Asbestos Injury Row,” reports that Twentieth Century Fox must allow an AIG unit to select defense counsel in an underlying asbestos injury suit, the insurer told a California federal court, saying it has a right to control the defense of a suit that it has agreed to cover.  National Union Fire Insurance Co. of Pittsburgh, Pa., said in a complaint that Twentieth Century Fox Film Corp. has retained a law firm that lacks experience in handling asbestos litigation and "charges considerably more than what is reasonable for defense of these lawsuits in the jurisdiction in which they are filed."

The insurer is also seeking a declaration that Fox Television Studios Inc., which was named in one of three underlying asbestos suits at issue, is not an insured under National Union's policies.  According to the insurer, Twentieth Century Fox hired Newmeyer & Dillion LLP to review potential insurance coverage after the company was named in the underlying asbestos suits filed in Los Angeles County Superior Court.  The firm then tendered the suits to National Union in September.

National Union said it agreed to defend Twentieth Century Fox, subject to a reservation of rights, under three primary liability policies issued by the insurer in the 1980s but declined to defend Fox Television.  Twentieth Century Fox "has refused to permit National Union to assign defense counsel even though National Union has the right to control the defense, including selection of defense counsel," the insurer said.  The insurer also asserted that invoices from Newmeyer & Dillion reflect time performing tasks other than defending the asbestos suits, as well as work that is not necessary to the defense of Twentieth Century Fox.

"Newmeyer Dillion includes in its invoices amounts that are block billed, contain vague descriptions as to the work performed, reflect duplication of efforts, include administrative tasks and are not reasonable or necessary to the defense of the asbestos lawsuits," the insurer said.  As such, National Union is seeking a declaration that it is only required to pay reasonable and necessary defense costs along with reimbursement from Twentieth Century Fox for amounts that the insurer has overpaid or had no obligation to pay.  "In addition, National Union seeks an order confirming it has no duty to defend Fox Television and an order requiring [Twentieth Century Fox] to reimburse any amounts National Union paid on Fox Television's behalf," the insurer said.