Insurer Can Intervene to Challenge 'Reasonableness' of Settlement

PHOENIX - An Arizona appellate court has ruled that a general liability insurer that defended under a reservation of rights can intervene in the underlying lawsuit to challenge the reasonableness of a settlement, particularly its insured's release of the right to recoup defense costs. Monterey Homes Arizona Inc. v. Federated Mutual Insurance Co., No. 1 CA-CV 08-0056 (Ariz. Ct. App., Div. One).

The Arizona Court of Appeals, Division One, said in its Feb. 10 opinion that Federated Mutual Insurance Co. should be afforded an opportunity to show it was not provided sufficient notice so it could withdraw its reservation of …