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Joint/Multiple Representation

This is a new page as of June 6, 2011.  It is not comprehensive, in that  we have made no attempt to capture cases preceding the creation of this site in mid-2000.  However, since mid-2000, we have attempted to include all insurance defense cases with conflict-of-interest issues.

        The contents of this page are as follows:

• One Client, or Two
• Reservation of Rights/Denial of Coverage
• Possibility of Excess Verdict?
• Other Cases and Authorities

One Client, or Two

       The North Carolina Approach.  Nationwide Mutual Fire Ins. Co. v. Bourlon, 617 S.E.2d 40 (N.C. App. 2005).  Suit by casualty insurer against insured regarding allegedly non-covered acts.  This 2-1 opinion deals with several discovery disputes involving communications with the lawyer retained by the insurer and the application of the attorney-client privilege to those communications.  The disputes are very fact-specific, and the opinion is long and hard to follow.  However, several holdings are noteworthy.  (1) The lawyer retained by the insurer to represent the insured has two clients.  (2) As to communications with the lawyer regarding the underlying defense, communications with the lawyer are not privileged as between the insured and insurer.  (3) As to communications between the lawyer and insured regarding matters unrelated to the defense, such as communications relating to coverage, the insured enjoys a privilege as to those communications.  Stated another way, the insurer cannot see those communications.

        In Nevada Lawyer Has Two Clients.  Nevada Yellow Cab Corp. v. Eighth Jud. Dist. Ct., 152 P.3d 737 (Nev. 2007).

       In California Lawyer Has Two Clients unless there Is a Conflict between the Insured and the Carrier.  J.R. Marketing, L.L.C. v. Hartford Cas. Ins. Co., 2007 Cal. App. Unpub. LEXIS 8797 (Cal. App. Oct. 30, 2007).

        In New York Defense Counsel has One Client.  Federal Ins. Co. v. North American Specialty Ins. Co., 2007 N.Y. App. Div. LEXIS 11139 (N.Y. App. Nov. 8, 2007).

        Weitz Co., LLC v. Ohio Cas. Ins. Co., 2011 U.S. Dist. LEXIS 68801 (D. Col. June 27, 2011).  One client, relying on Col. Op. 91 (1993).

        Maryland: One Client Unless Documentation Shows Carrier Is also a Client.  Pennsylvania Nat'l Mut. Cas. Ins. Co. v. Perlberg, 2011 U.S. Dist. LEXIS 54763 (D. Md. May 20, 2011).

        Carrier May Sue Counsel Retained for Insured for Malpractice.  Hartford Ins. Co. v. Koeppel, 2009 U.S. Dist. LEXIS 38135 (M.D. Fla. May 5, 2009).

       Whether Insurance Defense Lawyer Represents the Insurer Is a Fact Issue.  Pharmacists Mut. Ins. Co. v. Billet & Connor, 2006 U.S. Dist. LEXIS 5168 (E.D. Pa. Feb. 9, 2006).

        Lawyer has one client (insured) if insured and insurer disagree on settlement.  Swiss Reinsurance America Corp., Inc. v. Roetzel & Andress, 837 N.E.2d 1215 (Ohio App. 2005).

        Pine Island Farmers Coop v. Erstad & Riemer, P.A., 649 N.W.2d 444 (Minn. 2002).  An insurer attempted to sue for malpractice a law firm it had retained to defend an insured.  The court held that ordinarily the lawyer for the insured is not also lawyer for the insurer and, therefore, cannot sue the lawyer for malpractice.  For the lawyer to represent both, the court held that a lawyer must explain to the insured the potential conflicts that could develop and then get the insured’s express consent for the lawyer to represent both.  The court also held that the insurer could not sue the law firm for equitable subrogation.  The court distinguished Atlanta International Insurance Co. v. Bell, 475 N.W.2d 294 (Mich. 1991), in which the Michigan court did allow such an action.  In Bell the insured had not sued the defense lawyer.  In this case the insured had sued the law firm.  One justice in this case dissented, noting that the insured was only suing for its deductible.  The dissenter did not quarrel with the majority’s equitable subrogation finding, but felt that the default rule should be that the defense lawyer does represent both the insured and insurer.  (The author of the majority opinion is Alan Page, formerly of the Minnesota Vikings and Chicago Bears, and in the Pro Football Hall of Fame.)

        Lawyer for Insured not Necessarily Lawyer for Insurer, but May Still Owe Duty of Care to Insurer.  Paradigm Ins. Co. v. Langerman Law Offices, P.A., 24 P.3d 593 (Ariz. 2001).  The Arizona Supreme Court held that the lawyer hired by an insurer to defend the insured is not thereby necessarily lawyer for the insurer.  However, the court also held that even though the insurer is not a client, the lawyer may hold a duty of care to the insurer.  One of the interesting aspects of this opinion is the court's heavy reliance on the Restatement.  For example, as to when a lawyer-client relationship is formed, the court relies on Restatement § 14.  As to whether the lawyer for the insured is also lawyer for the insurer, the court quotes from cmt. f to Restatement § 134.  As to conflicts generally, the court cites Restatement § 121.  The court relies, in part, upon Restatement § 51(3) in holding that the lawyer may owe a duty of care to the insurer, even though not a client.  The court remanded the case to the trial court to determine whether the lawyer did, in fact, violate his duty to the insurer.

       Hartford Cas. Ins. Co. v. Halliburton Co, 826 So. 2d 1206 (Miss. 2001.  In an earlier case, Ringer represented Pierce who was sued for his role in an oil well "blow-out."  When that suit was filed, Pierce claimed that he was covered by Hartford.  Hartford initially denied coverage.  Pierce then hired Ringer.  Later, Hartford relented and began paying Ringer's fees and expenses.  This case is a dispute between Halliburton and Hartford arising from the same blow-out.  Ringer appeared for Halliburton.  Hartford moved to disqualify Ringer, claiming it was a former client of Ringer.  The trial judge denied the motion.  The Mississippi Supreme Court affirmed.  The court noted that ordinarily, where the insurance company retains defense counsel, the lawyer represents both the insured and the insurance company.  Not so in this case because Ringer had been hired by Pierce and not by Hartford.  The fact that Hartford had ultimately paid Ringer's fees did not make Hartford a client.

        U.S. Specialty Ins. Co. v. Burd, 2011 U.S. Dist. LEXIS 62877 (M.D. Fla. June 14, 2011).  In this opinion the court held that an insurance defense lawyer has a relationship ("tri-partite relationship") with the insurer such that the insurer can sue the lawyer for malpractice.  The lawyer claimed that two conflicts obviated that relationship.  The first was the prospect of an excess verdict.  The court found that the mere prospect of an excess verdict did not constitute a conflict or obviate the relationship.  The second was a policy defense.  The court rejected that claim, finding there was no policy defense and noting that the insurer did not issue a reservation of rights letter.

        Remodeling Dimensions, Inc. v. Integrity Mut. Ins. Co., 2011 Minn. App. LEXIS 80 (Minn. App. June 21, 2011).  Owner hired Contractor to build an addition to Owner's home.  Allegedly, Contractor failed to note that a window had earlier been installed by someone else incorrectly, leading to moisture damage.  Owner's claim against Contractor was arbitrated by AAA, and Owner received an award of $50,000.  This case is a claim by Contractor against Contractor's insurance carrier ("InsCo") for indemnification of that amount.  The trial court found for Contractor.  In this opinion the appellate court reversed.  Taking the issues out of order, the appellate court held that Contractor's failure to detect the defective window and advise Owner plainly did not fall within the coverage of the insurance policy.  The more relevant discussion to this audience is the court's analysis of whether the law firm retained by InsCo (under a reservation of rights) to defend Contractor in the AAA arbitration had one client or two.  The court said that where there is no conflict, the law firm retained by the carrier could have two clients, the insured and the insurer, if the law firm consulted with the insured and the insured agreed.  Here, there was no evidence of any consultation on this issue, and the court found a conflict.  That conflict arose when the law firm failed to request, prior to the selection of the arbitrator, an explanation for the basis of the award.  Thus, the law firm was representing the Contractor only, and InsCo cannot be charged with the law firm's failure to request the explanation.  [Note: anyone with an interest in this area had better read the opinion.  We have never encountered a claim that failure to make a pre-hearing request for explanation of an arbitration award was grounds for anything.  Therefore, our description of the case may be flawed.]

        Ethics Opinion.  Col. Op. 91 (1993) (one client).

Reservation of Rights/Denial of Coverage

        Duty to provide separate counsel for insured when reserving rights.  Magnolia Healthcare, Inc. v. The Hartford Fin. Services Group, Inc., 2006 U.S. Dist. LEXIS 85079 (N.D. Miss. Nov. 17, 2006).

      Reservation of Rights Letter Does not Automatically Create a Conflict between the Insurer and Insured.  Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Bev. Co. of S.C., LP, 433 F.3d 365 (4th Cir. 2005).  Same, under Washington law, Weinstein & Riley, P.S. v. Westport Ins. Corp., 2011 U.S. Dist. LEXIS 26369 (W.D. Wash. March 14, 2011).

       Reservation of Rights Prevents Intervention.  Frank Betz Associates, Inc. v. J.O. Clark Construction, L.L.C., 2010 U.S. Dist. LEXIS 55193 (M.D. Tenn. June 4, 2010).  Ins. Co. is providing a defense to the defendants under a reservation of rights.  Ins. Co. moved to intervene for the purpose of submitting special interrogatories to the jury to resolve coverage issues.  In applying FRCP 24(b) the court denied the motion because allowing the coverage issues into the trial would create a conflict of interest for defense counsel (presumably because they had been retained by Ins. Co. to represent the defendants).

      Impact of Reservation of Rights on Insured's Right to Hire Own Counsel.  Armstrong Cleaners, Inc. v. Erie Ins. Exchange, 364 F. Supp. 2d 797 (S.D. Ind. 2005).  The first paragraph of the opinion summarizes the court’s holding:

This case presents a recurring conflict of interest question within law's "eternal triangle" -- the liability insurance company, the insured, and the insurance defense attorney. The question is whether an insurer's reservation of rights created a conflict of interest sufficient to entitle the policyholders to have their insurer pay attorneys of the policyholders' choice to defend them in the underlying litigation. As explained below, the court finds that the reservation of rights posed, in the terms of Rule 1.7(a)(2) of the Indiana Rules of Professional Conduct, "a significant risk" that representation of the policyholders by attorneys chosen by the insurer would be materially limited by the attorneys' responsibilities to the insurer. As a result, the policyholders are entitled to select their own counsel to defend the underlying claim, subject to reasonable approval by the insurer, with reasonable fees and expenses paid by the insurer.

        The court held that because the trier of fact could make findings, some of which could result in no coverage, the law firm selected by the insurance company would have a conflict.

       Reservation of Rights Case.  Tyson v. Equity Title & Escrow Co., 282 F. Supp. 2d 829 (W.D. Tenn. 2003).  The court held that a lawyer hired by the insurance company to defend an insured, where the insurance company had issued a reservation of rights, did not have a conflict of interest.

        Reservation of Rights: Questionable Conduct of Carrier-Retained Counsel.  Williams v. American Country Ins. Co., 833 N.E.2d 971 (Ill. App. 2005).

       Law Firm Does not Have a Conflict with Insured Where Carrier Had Initially Denied Coverage but then Admitted Coverage.  Bartolotta v. Gibney, 731 N.W.2d 385 (Wis. App. 2007) .

        Yaron v. Darwin Nat'l Ins. Co., 2011 Phila. Ct. Com. Pl. LEXIS 167 (Pa. Ct. Com. Pl. July 5, 2011).  InsCo hired counsel to defend Insureds under a reservation of rights.  Insureds hired their own additional counsel.  In this case Insureds sued InsCo to recover the fees and expenses of their own counsel.  In this opinion the court granted summary judgment to InsCo, holding that a reservation of rights does not automatically constitute a conflict of interest between the insurer and insured.

        Century Surety Co. v. 350 W.A., LLC, 2011 U.S. Dist. LEXIS 111366 (S.D. Cal. Sept. 29, 2011).  This is a suit by Insurer to rescind a policy and for a declaration that it owed Insured nothing.  Insured did not tender the defense of the underlying case to Insurer until after the trial of that case.  In this opinion the court held, among other things, that Insured was not entitled to hire independent ("Cumis") counsel for appeal of the underlying case because the trial record was fixed, and the law firm hired by Insurer would not have a conflict.

        British Columbia Med. Ass'n v. Aviva Ins. Co. of Canada, 2011 BCSC 1399 (CanLII) (B.C. S. Ct. Oct. 19, 2011).  A person brought a defamation action against an entity and several individuals ("underlying case").  The entity's insurance carrier issued a reservation of rights based upon a claim of no coverage.  In this case the insureds seek a declaratory judgment that they are covered by the policy and that they have a right to control the defense of the underlying case.  As to the latter issue the court, in this opinion, held that a law firm representing both the insureds and the insurer would have a conflict.  This is because coverage issues would turn upon the conduct of the insureds that would be shown at the trial.

        Coats, Rose, Yale, Ryman & Lee, P.C. v. Navigators Specialty Ins. Co., 2011 U.S. Dist. LEXIS 133886 (N.D. Tex. Nov. 21, 2011).  This is a suit by Law Firm against its malpractice carrier regarding the carrier's claimed right to control the defense of an underlying case.  In the underlying case former clients sued Law Firm for malpractice, breach of fiduciary duty, and declaratory judgment.  After Law Firm tendered defense of the underlying case to its carrier, the carrier reserved rights as to the claim of excessive fees and declaratory judgment.  Law Firm brought this action against the carrier for a declaration that the law firm could hire independent counsel at the carrier's expense.  In this opinion the court granted summary judgment to the carrier.  Evidently, the reservation of rights covered the excessive fee claim and the count for declaratory judgment, but not the underlying claim for malpractice damages.  The court held that just because the carrier might later reserve rights as to malpractice damages, did not justify a finding of an actual conflict of interest.  The court also held that the law firm retained by the carrier would have no incentive to guide the case to a result favoring the carrier and disadvantaging Law Firm.

        Sydie v. Murad, 2011 ONSC 5781 (CanLII) (Ont. Sup. Ct. Nov. 28, 2011).  InsCo denied coverage for this occurrence (negligent house inspection) because the inspector did not mention this occurrence on his insurance application.  In this opinion the court held that while the claim of coverage was ongoing, the insured/inspector had the right to hire his own counsel in the liability case at InsCo's expense.

        Partain v. Mid-Continent Specialty Ins. Services, Inc., 2012 U.S. Dist. LEXIS 7530 (S.D. Tex. Jan. 20, 2012).  Architects sued Developer for copyright infringement (not this case).  Developer's insurance carrier ("Insurer") served a reservation of rights, identifying several coverage issues.  But, Insurer did assume the defense and hired a law firm to defend.  Developer claimed that Insurer had a conflict and that Developer should be allowed to hire its own law firm.  Developer filed this case for a declaration, among other things, that Developer had the right to its own law firm at Insurer's expense.  On that point, in this opinion, the court held that Developer could not show the requisite conflict.  For each coverage issue, the court concluded that no findings would be made in the underlying case that would resolve that issue.  Thus, Insurer's law firm would not have a conflict because it would not have to ability to influence the outcome as to coverage.
 
Possibility of Excess Verdict

       Policy Limit Offers and Conflicts.  American Modern Home Ins. Co., Inc. v. Gallagher, 2008 U.S. Dist. LEXIS 9523 (S.D. Cal. Feb. 7, 2008).  Ins. Co. retained Lawyer to defend a property owner in a tort claim.  The policy limits were $300,000.  Plaintiff demanded the limits.  Ins. Co. did not respond in a timely manner, and Ins. Co. ultimately settled with Plaintiff for $5 million.  Ins. Co. then sued Lawyer for malpractice and breach of fiduciary (this case).  In this opinion the court denied Lawyer’s motion for summary judgment.  As to the effect of a policy limits demand on the lawyer’s relationship with a casualty carrier, the court said as follows:

 . . . [C]ase law does not suggest that a conflict arising between an insurance company and its insured nullifies an insurance defense attorney's duty to its insurance company client in favor of having a sole duty to the insured . . . .

     
        Possibility of Excess Verdict, without More, Does Not Create a Conflict for Insurer Retained Lawyer.  U.S. Specialty Ins. Co. v. Burd, 2011 U.S. Dist. LEXIS 62877 (M.D. Fla. June 14, 2011), and Canada Inc. v. Economical Mut. Ins. Co., 2011 ONSC 1085 (CanLII) (Super. Ct. Ont. Feb. 22, 2011).

Other Cases and Authorities

        Article.  Tanya S. Bryant, Note, Loyalty Divided? The Ethical Considerations of the Tripartite Relationship in Insurance Defense Litigation, 29 Okla. City U.L. Rev. 889 (2004).

        "Staff Counsel" OK.  American Home Assurance Co. v. Unauthorized Practice of Law Committee, 121 S.W.3d 831 (Tex. App. 2003).  The court held that insurance companies that employ staff lawyers to represent insureds do not violate unauthorized practice of law rules, and the staff lawyers do not violate the Texas Rules of Professional Conduct.  That was also the holding in Ala. Op. 2007-1 (March 2007).

        Another "Eternal Triangle" Case.  Kuhlman Electric Corp. v. Chappell, 2005 Ky. App. LEXIS 252 (Ky. App. Dec. 2, 2005).  Law Firm was retained by Insurance Carrier (“Carrier”) to defend Employer in a worker’s compensation case.  The claimant received an award.  Some years later, after Employer became self-insured, the claimant re-opened the case to seek a higher award.  The claimant claimed that his condition worsened over the years.  Carrier retained Law Firm to defend the matter.  Law Firm devised a strategy to make the claimant’s condition a new one, thus shifting the award to the self-insured Employer.  Employee’s counsel cooperated in this effort, because if the condition were deemed a new one, the award would be greater.  After a higher award was entered against Employer, Employer sued Law Firm.  The trial court granted Law Firm summary judgment.  The appellate court, in this opinion, found that favoring Carrier was malpractice.  However, the court affirmed the summary judgment, because Employer could not show that the result would have been different had Carrier employed different counsel to protect its position.

        "Additional Insured" Has Right to Defense Even Though It Might Be Adverse to Primary Insured.   BP Air Conditioning Corp. v. One Beacon Ins. Group., 821 N.Y.S.2d 1 (N.Y. App. 2006).  Additional insured's lawyer does not have a conflict even though he is being paid by the insurance company, and he is adverse to the primary insured.

       Ramifications of Personal Injury Plaintiff Taking from Insured Defendant Assignment of Claim against Casualty Carrier.  Jackson v. American Safety Ins. Holdings, Ltd., 2006 U.S. Dist. LEXIS 2167 (E.D. Ky. Jan. 20, 2006).

        Alleged wrongful termination of captive counsel.  Lewis v. Nationwide Mut. Ins. Co., 2003 U.S. Dist. LEXIS 5126 (D. Conn. March 18, 2003).  The plaintiff, a lawyer, had been a full time employee of defendant.  His job was to defend the defendant’s insureds.  He is now suing the defendant for wrongful discharge.  The plaintiff claims that he was harassed and fired for his refusal to take direction from superiors that would have impaired his ability to competently represent insureds.  He claims that following his superiors’ orders would have required him to violate Connecticut’s version of Model Rules 1.8(f)(2) and 5.4 (c).  The court in this opinion denied the defendant’s motion to dismiss.

         Adjuster Conflict Does Not Disqualify Lawyer.  Underwriters Ins. Co. v. L&L Marine Transportation, Inc.., 2001 U.S. Dist. LEXIS 18978 (E.D. La. 2001).  A ship sank, and a guest aboard was killed.  Underwriters provided hull coverage to the ship owner.  Piccolo represented Underwriters in declaratory judgment action against ship owner contesting the hull coverage.  Underwriters also provided liability coverage to the ship owner.  The decedent's family brought a wrongful death action against the ship owner and Underwriters.  Piccolo was not involved in the latter action.  However, initially Underwriters assigned the same adjuster to both matters.  The ship owner moved to disqualify Piccolo in the hull case, because Piccolo might have obtained the ship owner's confidences from the adjuster because of the adjuster's contacts with the ship owner in the wrongful death case.  The adjuster is no longer involved with either matter.  The court held that because there was no showing that Piccolo ever had any contact with the adjuster, Piccolo should not be disqualified.

        Employers Mut. Cas. Co. v. Al-Mashhadi, 2009 U.S. Dist. LEXIS 75442 (E.D. Mich. Aug. 24, 2009).  An employee at a filling station ("Employee"), at about the time he was getting off work, was horsing around with a rifle owned by the filling station.  The rifle accidentally discharged injuring a friend of Employee ("Friend").  Friend sued the filling station and several individuals, including Employee, in state court.  The plaintiff in this case ("EMC") issued an insurance policy covering the filling station for liability.  EMC is seeking in this case a declaration that its policy does not cover the shooting accident.  The law firm representing EMC in this case ("Law Firm") also represents the filling station and individual defendants in the state court case.  However, EMC retained a different law firm to represent Employee in the state court case.  Employee moved to disqualify Law Firm in this case.  In this opinion the court denied the motion, finding no conflict of interest.

        In State ex rel. Neb. State Bar Ass'n v. Frank, 262 Neb. 299 (2001), a disciplinary case, the court held that a lawyer handling insurance defense cases for a carrier could not bring a workmen's compensation case against that carrier's insured.

         United States v. Daniels, 163 F. Supp. 2d 1288 (D. Kan. 2001).  Health care fraud prosecution against a doctor.  In addition to two criminal defense lawyers, the doctor was being represented by the same law firm that defends him in malpractice cases.  The doctor's malpractice insurance company is paying the firm's fees in the criminal case.  The government moved to disqualify the law firm because it was being paid by the insurance company.  The court denied the motion, saying it saw no differing interests.  Moreover, the court felt the presence of the two criminal defense lawyers would provide the doctor further protection.

        Joint Defense with Insurance Carrier.  In re Skiles, 102 S.W.3d 323 (Tex. App. 2003).  Skiles sold property to Bridecam.  Bridecam has now sued Skiles for fraud.  Bean is Bridecam’s lawyer in this case.  After this case began, Bean joined the Chambers firm.  For that reason, Skiles has moved to disqualify the Chambers firm.  This is because the Chambers firm has previously represented Skiles’ insurance carrier in a coverage dispute arising out of this case.  The trial court denied the motion.  The Appellate Court reversed because Skiles’ lawyer had communicated with the Chambers firm pursuant to the joint defense privilege.  Skiles claims this included Skiles’ confidential information, which Bridecam did not deny.

        Plaintiff's lawyer had no duty to protect subrogation rights of plaintiff's automobile insurance company.  Farm Bureau Mut. Ins. Co., Inc. v. Carmody, 88 P.3d 1250 (Kan. App. 2004).

        Conflict with Insurance Company: When Costs of Defense Are Recoverable Due to Conflict.  Santa’s Best Craft, LLC v. St. Paul Fire and Marine Ins. Co., 353 F. Supp. 2d 966 (N.D. Ill. 2005).  The plaintiff is suing St. Paul for declaratory judgment that St. Paul owes the plaintiff a defense in another action.  Part of its claim for reimbursement of costs of defense from St. Paul is that St. Paul has a conflict with plaintiff because they disagree in this case.  The court denied the claim saying that only if the plaintiff and St. Paul had had a conflict in the underlying case, would plaintiff be entitled to costs of defense.

       Standard for Employment of "Cumis Counsel."  Silacci v. Scottsdale Ins. Co., 2006 U.S. Dist. LEXIS 6076 (N.D. Cal. Feb. 16, 2006).

        No Conflict for Cumis Purposes just Because Amount Claimed against Insured Exceeds Policy Limits.  Ghiglione v. Discover Prop. & Cas. Co., 2007 U.S. Dist. LEXIS 22901 (N.D. Cal. March 29, 2007).

        Statutory Fee Cap for Cumis Counsel.  Long v. Century Indem. Co., 2008 Cal. App. LEXIS 919 (Cal. App. June 17, 2008). 

        Insurance Company Employee Knew Joint Representation Would Be a Conflict, but Wanted to Save Money.  Jurinko v. The Medical Protective Co., 2006 U.S. Dist. LEXIS 13601 (E.D. Pa. March 29, 2006).

       Lawyer Selected by Insurer to Represent Insured not thereby Lawyer for Reinsurer and cannot Be Sued by Reinsurer.  Zenith Ins. Co. v. Cozen O’Connor, 55 Cal. Rptr. 3d 911 (Cal. App. 2007).

        Representing Subrogation Service Company (posted February 20, 2010) Pierce & Weiss, LLP v. Subrogation Partners LLC, 2010 U.S. Dist. LEXIS 13070 (E.D.N.Y. Feb. 16, 2010).  This case involves lawyers for a company that provides subrogation services to insurance companies.  We will call the company "SubCo."  An insurance company pays a claim.  There is a wrongdoer from whom the insurance company can obtain subrogation.  Rather than hire its own lawyers to pursue subrogation claims, the insurance company has a contract with SubCo, who hires the lawyers, supervises the process, and pays the lawyers.  SubCo is never named as a party in the cases.  A law firm ("Law Firm A") that handles such cases for SubCo sued SubCo for fees (this case).  Law Firm A hired another law firm ("Law Firm B") to represent Law Firm A in this case.  That required pro hac vice admission of the lawyers from Law Firm B.  In this opinion the court denied admission because Law Firm B had a conflict.  That is because Law Firm B handles SubCo subrogation cases.  Based upon all the facts, the court found that Law Firm B had a lawyer-client relationship with SubCo.

        Vinokur v. Raghunandan, 2010 N.Y. Misc. LEXIS 2644 (N.Y. S. Ct. June 25, 2010).  This is a personal injury case arising out of an automobile collision.  Law Firm appeared for two defendants, the driver and the car leasing company.  Law Firm moved for summary judgment for the leasing company under the federal "Graves Amendment," an act that removes vicarious liability of auto leasing companies.  The court, raising Law Firm's conflict sua sponte, held that Law Firm may represent only the leasing company in this action.  The court held, in effect, that the defendant/driver should have the opportunity to object to the leasing company's claim of no liability, lest the driver be left with the sole exposure to the plaintiff's claim.  In Govias v. Tejada, 2010 U.S. Dist. LEXIS 91576 (S.D.N.Y. Aug. 30, 2010), the court held that a conflict in this situation was cured with a written waiver from the driver.

        Emery v. Progressive Cas. Ins. Co., 2010 La. App. LEXIS 1212 (La. App. Sept. 10, 2010).  InsCo issued a casualty insurance policy to Employer.  The policy listed which vehicles would be covered.  Employee, while driving a vehicle not listed on the policy, rear-ended Injured Parties.  InsCo, knowing that the vehicle was not listed, and having issued a reservation of rights letter, nevertheless hired one lawyer to represent both InsCo and Employer.  InsCo did not hire a separate lawyer for Employer until 17 months after issuing the reservation of rights letter.  Employer moved for summary judgment against InsCo on the coverage issue.  The trial court granted the motion.  In this opinion the appellate court affirmed.  The court held that providing only one lawyer to both defendants waived the policy defense.

        Collick v. Weeks Marine, Inc., 2011 U.S. Dist. LEXIS 42950 (D.N.J. April 20, 2011).  Plaintiff was injured at a construction site.  Plaintiff sued Contractor and Sub-Contractor ("Sub").  Before the accident, Sub had agreed to purchase liability insurance, under which Contractor would be an additional insured.  When this action began, the insurance company ("InsCo") denied a defense to Contractor.  Contractor then brought a third-party action against InsCo.  InsCo hired Law Firm to defend Sub.  Contractor moved to disqualify Law Firm because it was representing Sub and InsCo.  In this opinion the magistrate judge denied the motion because Contractor failed to show any conflict between Sub and InsCo.  Among other things, the judge rejected Contractor's claim that Law Firm's representation created an appearance of impropriety, noting that "appearance of impropriety" had been removed from the New Jersey Rules in 2004.

        In re Zuber, La. Att'y Discipl. Bd., No 09-DB-060 (June 15, 2011).  Law Firm was retained by an insurance company ("InsCo") to represent Doctor in a medical malpractice case.  Under the applicable insurance policy InsCo had complete discretion on the defense and settlement of the case.  Doctor had no right to dictate the terms of settlement.  Law Firm negotiated a settlement and notified Doctor of the settlement only after it was agreed to.  Law Firm had failed to inform Doctor of an impending mediation, at which settlement would be discussed.  In this report the Disciplinary Board recommended that one lawyer in law firm be admonished and that another be publicly reprimanded, both for violating La. Rule 1.4.

        New York State Urban Dev. Corp. v. Ritco Int'l Inc., 2011 N.Y. Misc. LEXIS 5685 (N.Y. Sup. Ct. Nov. 30, 2011).  This is not a case involving an insurance policy, but rather about indemnification provisions in a contract of sale.  The facts and procedure are complex, but one point of possible relevance to this audience concerns the right of an indemnitor to control the defense of a case where the indemnitee and indemnitor have a conflict of interest.  In this opinion the court found a conflict and ruled that the indemnitee had the right to hire its own counsel.

        Great Am. E&S Ins. Co. v. Quintairos, Prieto, Wood & Boyer, P.A., 2012 Miss. App. LEXIS 56 (Miss. App. Jan. 31, 2012).  Nursing Home was sued by the estate of a patient.  Nursing Home's primary carrier hired Law Firm.  Law Firm supplied reports to the primary carrier and to Excess Carrier.  Law firm allegedly botched the defense causing Excess Carrier to pay money.  Excess Carrier brought this malpractice case against Law Firm, alleging malpractice and equitable subrogation.  The trial court granted in total Law Firm's motion to dismiss.  In this opinion the court found that Excess Carrier had adequately pleaded both theories.  Several of the issues were of first impression in Mississippi.  [Author's Note: this summary may be overly simplified, but insurance defense and coverage lawyers will recognize it as a case they should read.] 

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