Legal Question in Insurance Law in California

Your lawyer has a duty to tell you about any written settlement proposals from the other side. This duty technically does not apply to proposals made orally, but almost all lawyers will report those as well.

You have not said how long ago you asked your lawyer for this information. If she has been busy and if your request was recent, she may simply not have had time yet to respond. You may want to make a second request in order to emphasize your interest in finding out what demands may have been made.

Even if your lawyer works for the insurance company, you are her client and she owes you the same duties any other attorney owes to his or her clients. If you're right that the insurance company has made conflicting demands of her and that she is putting their interests ahead of yours, then she may have a conflict of interest which would require that she be replaced by an outside attorney.

Note, though, that the adjuster who told you about this demand may have been mistaken. Adjusters often are not privy to such negotiations. In fact, it would be unusual for an adjuster to have the information this one claimed to have.

Additionally, your lawyer was mistaken if she said you can make the insurer settle within the policy limits. Are you sure she said the decision was yours and not the insurer's?

If the insurer believes that the case is meritless or that it is worth less than the plaintiff has demanded, it does not have to meet that demand whether you want it to or not. If it rejects the demand and then you get hit with a judgment larger than your policy limits, the insurer will have to pay that entire amount. But whether to take that risk is the insurer's decision and not yours.

Please feel free to contact me directly if you want to discuss your situation in more detail.

Your feelings about bearing the risk are fully justified. The adjuster is trying to avoid paying because the adjuster is protecting insurance company's pocket book and probably doesn't care if you are placed at risk. The assigned lawyer, while having given you the correct legal adivce, is working for the insurance company. Hence, conflict of interest! You should send a certified letter to BOTH your lawyer and adjuster asking them to settle your case within your policy limits. They don't have to settle and can choose to fight, but at that point it will be on their dime, not yours. Picture your deposition or trial testimony:

Q. Do you dispute the fact that this accident was caused by you?

A. No, it was my fault. As a matter of fact I told both my lawyer and adjuster to settle and they didn't.

I'd say it will be a short trial. :)

Lastly, make sure to keep everything in writing and keep copies. That is the only solid way you'll be able to pass the buck here. Most probably the other party's lawyer made a time-limited demand of the policy limits, and your adjuster ignored it. You should protect yourself, and ask them to allow you to have your own, separate lawyer, called 'cumis counsel.' The fees for cumis counsel is paid by the insurance company, but you choose your own lawyer.

If you get hit with excess judgment and they refuse to pay the excess, you will have the right to sue them for bad faith. I'll be happy to handle that for you.