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Insurers Appeal Ruling Thwarting Bid for Fees

October 31, 2011 | Posted in : Coverage of Fees, Fee Dispute, Fee Entitlement / Recoverability

A recent NLJ story, “MGA’s Insurers Attempt End-Run Around Ruling Thwarting Bid for Fees” reports that four insurance companies have appealed a judge’s order that frustrated their attempt to snag a portion of the $141 million in attorney fees and costs awarded to Bratz doll maker MGA Entertainment Inc. in its fight against Mattel Inc.  The insurers – National Union Fire Insurance Co. of Pittsburgh, Lexington Insurance Co., Chartis Specialty Insurance Co. and Crum & Forster Insurance Co. – paid legal costs for MGA, which obtained a $310 million judgment following a jury trial against Mattel over the copyright to the Bratz doll.  The insurers seek reimbursement for MGA’s defense fees and costs, which they estimate at about $80 million.

U.S. District Judge David Carter in Santa Ana, Calif., denied the insurers’ motion to intervene in the Mattel case, finding the move “untimely” and “futile,” since “the insurers can no longer attempt to step into MGA’s shoes and directly recover reasonable attorneys’ fees from Mattel.  And any claim for reimbursement of those fees from MGA would unduly prolong this litigation, which has been administratively closed and is now on appeal.”  Furthermore, he said intervening would do nothing to ensure that MGA paid its insurers.