June 24, 2011
No Conflict In Insurer-Insured Representation
A Louisiana Hearing Committee in the main rejected charges bought by the Office of Disciplinary Counsel in a case involving a host of ethical charges arising from the classic insurer-insured trilemma. The fact pattern of the case presents issues that have the feel of a law school hypothetical.
In 1995, St. Paul Insurance assigned the defense of a medical malpractice case to a partner in a Baton Rouge law firm. He (Partner One) evaluated the case and assigned primary responsibility for the litigation to Partner Two.
Partner Two made a minor procedural mistake involving the filing of a jury bond. The matter nonetheless proceeded and was settled at a mediation. Partner Two has not advised the doctor of the mediation or otherwise kept him apprised of developments. Under the insurance contract, the doctor had no legal right to prevent the insurer from settling the matter.
Partner Two advised the doctor of the settlement the day it was reached. He went ballistic. He sued the law firm for legal malpractice. A jury awarded the doctor $138,500 in damages, assessing Partner One as 30% and Partner Two as 70% responsible. The suit bounced around the courts for several years and eventually the lawyers prevailed. Bar charges followed.
The hearing committee found that the attorneys had provided competent and diligent representation. Partner One did not fail to properly supervise Partner Two. Neither violated withdrawal duties or engaged in conduct prejudicial to the administration of justice.
Notably, the hearing committee found no violation of conflict of interest in the dual client representation.
The only violations found were Rule 1.4, duty to communicate with the doctor client. Partner One failed to advise him of the procedural glitch (he was still reponsible for the case at the time); Partner Two had not kept the doctor in the loop and had not advised him of the mediation.
The committee found Partner Two's violation more serious. They recommend a public reprimand for her and an admonition for Partner One.
According to the firm's web page, Partner One (a name partner) remains at the firm; Partner Two has departed.
The decision of the Louisiana Supreme Court in the legal malpractice case is linked here. (Mike Frisch)
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