Schaefer

FACTS AND PROCEDURE

Plaintiff Steve Schaefer contracted with defendant Kelly Elder, doing business as Elder Construction, to design and build a residence for Schaefer in El Dorado County. Later, Schaefer sued Elder, alleging causes of action for breach of contract, negligence, breach of implied warranty, strict liability, money lent, diversion of funds, failure to enter into a written contract, and excessive down payment. Elder tendered the defense of the action to his insurer, CastlePoint National Insurance Company (formerly known as SUA Insurance Company), and CastlePoint appointed counsel of its choice, the law firm of Koeller, Nebeker, Carlson & Haluck to represent Elder, subject to a reservation of rights. CastlePoint also filed separately a declaratory relief action against Elder to determine whether the insurance policy provided coverage for the claims Schaefer made against Elder. Elder hired a different law firm to move to disqualify the Koeller firm and to determine Elder’s right to independent counsel. CastlePoint opposed the motion. The trial court granted Elder’s motion, disqualifying the Koeller firm and determining that Elder has a right to independent counsel.…