A federal district court in California recently dismissed an insurer’s breach of contract action based on an insured’s request for independent defense counsel. St. Paul Fire & Marine Ins. Co. v. Centex Homes, No. 14-01216 (C.D. Cal. Dec. 19, 2014).  Premised upon conflict of interest grounds, the insured raised concerns about the counsel appointed by the insurer to defend the insured in an underlying construction defect action.  The insured then requested defense by independent counsel and also expressed is willingness to work out an allocation of defense costs between the insurer and other insurers that may provide coverage.  And the insured conceded the insurer could appoint its own co-counsel to participate in the defense of the underlying action, subject to the insured looking to the insurer to pay all expert and vendor bills as well as the fees generated by the insurer’s co-counsel.  The insurer then sued for breach of contract, alleging that the insured had breached the general liability insurance policies’ cooperation clause.  On the insured’s motion to dismiss, the court determined that the mere request for independent counsel did not constitute a breach of the insured’s duty to cooperate.  The court also held that the insured’s reservation of rights to possibly seek reimbursement for the services of the insured’s counsel of choice also was not a breach of the cooperation clause, nor was the insured’s demand that the insurer pay all expert and vendor bills.  Nothing in the policies’ cooperation clause suggested that the insured had an obligation to tender a defense to other insurers.  Rather, the insurer had a right to seek contribution from other insurers who may have insured the loss at issue.  The court did not reach the question of whether a breach of a policy’s cooperation clause gives rise to an independent cause of action for breach of contract under California law rather than merely an affirmative defense to coverage.