Opinion ID: 1793652
Heading Depth: 1
Heading Rank: 2

Heading: Attorney's Duty

Text: What duty is owed by the attorney to the liability insurance carrier that retains and pays him, and to the insured whom he represents, when a suit is filed for damages in excess of the insurance policy limits? An attorney owes his client the duty to exercise the knowledge, skill, and ability ordinarily possessed and exercised by the members of the legal profession similarly situated. Hickox v. Holleman, 502 So.2d 626, 634 (Miss. 1987). Additionally, the attorney-client relationship is of a fiduciary nature, and in all relations with his client an attorney has the duty to maintain the utmost good faith, honesty, integrity, fairness and fidelity. 7A C.J.S. Attorney and Client § 234, p. 424 (1980). An attorney is not answerable for every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge... . Nause v. Goldman, 321 So.2d 304, 308 (Miss. 1975) (emphasis added). In an analogous area of medical malpractice, this Court has held that The law has never held a physician or surgeon liable for every untoward result which may occur in medical practice; and a physician is not a warrantor against bad results. Dazet v. Bass, 254 So.2d 183, 187 (Miss. 1971). Likewise an attorney is not a warrantor against bad results. To hold otherwise would be to require of him the gift of foretelling the future not often given to mankind. We know of no mortal who has been vouchsafed this power since the days of the Bible prophets; and as we understand it, these ancient seers had access to some inside information not presently available to counsel in damage cases. Ferris v. Employers Mutual Casualty Co., 255 Iowa 511, 122 N.W.2d 263, 269 (1963). Attorney has the normal attorney-client relationship with insured. He may have nor exercise any duties to the insurer which are in conflict with duties to insured, absent express contrary consent from the insured. An attorney owes his client undivided allegiance. After the attorney has received the confidence of a client, the attorney may not act both for the interests of his client and the conflicting interest of another without the free and intelligent consent of his client. Ishmael v. Millington, 241 Cal. App.2d 520, 50 Cal. Rptr. 592 (1966). When an attorney represents the insurer and the insured, he owes to both a high duty of care. Insofar as the insured is concerned, the attorney owes him the same obligations of good faith and fidelity as if he had retained the attorney personally. Lysick v. Walcom, 258 Cal. App.2d 136, 65 Cal. Rptr. 406, 28 A.L.R.3rd 368 (1968). When an attorney attempts dual relationships without making the full disclosure required of him, he may be civilly liable to the client who suffers loss caused by his lack of disclosure. Id. Likewise, when an attorney's conduct on behalf of the insurer breaches his duty to the insured by prejudicially affecting the insured's substantial rights, the breach of duty to the insured amounts to legal malpractice. Ivy v. Pacific Auto Ins. Co., 156 Cal. App.2d 652, 320 P.2d 140 (1958). According to Mallen and Levit, Legal Malpractice § 1 (2d ed. 1981): Some courts seem to distinguish a breach of the fiduciary obligations from legal malpractice. The prevailing and more reasonable view, however, is that legal malpractice encompasses any professional misconduct whether attributable to a breach of the standard of care or of the fiduciary obligations. In recognition of the dual bases of an attorney's liability, some courts have referred to the fiduciary obligations as setting forth a standard of conduct. Thus, under the theoretical approach legal malpractice may be defined as a breach by an attorney of either the standard of care or of the standard of conduct. Thus, legal malpractice may be a violation of the standard of care of exercising the knowledge, skill, and ability ordinarily possessed and exercised by members of the legal profession similarly situated, or the breach of a fiduciary duty. The declaration here charges a fiduciary violation as the basis for this malpractice action. To recover under the negligence theory of legal malpractice, the client must prove the existence of an attorney-client relationship, the acts constituting negligence, that the negligence proximately caused the injury, and the fact and extent of the injury. Hickox v. Holleman, 502 So.2d at 634; Hutchinson v. Smith, 417 So.2d 926 (Miss. 1982); Thompson v. Erving's Hatcheries, Inc., 186 So.2d 756 (Miss. 1966). However, the legal malpractice alleged in this case is a violation of the standard of conduct, not breach of the standard of care. The elements of this cause of action are the same as other legal malpractice actions except, instead of proving negligence, the plaintiff must prove a violation of the attorney's fiduciary duty. The undisputed facts of this case created a jury question regarding such a violation. The attorneys were representing two interests, those of the insurer and the insured, and were in an untenable conflict of interest situation where the wishes of the insured were contrary to the wishes of the insurer. It must be noted that Foster denied being told that he could employ independent counsel. Williamson and Coker testified to the contrary. The evidence showed that Foster wanted his attorneys Coker and Williamson to settle the case for $45,000, but they refused to recommend a settlement of $45,000 to Hartford. The evidence showed settlement offers of $35,000 and $30,000 were communicated to Coker and Williamson who did not relay the offers to Foster. The evidence further showed Coker and Williamson recommended and received authority to settle the case for $25,000. The Sims' attorneys did not recall this counter-offer of $25,000. Fiduciary duty required at very least timely communication to Foster of each settlement demand. Once a settlement offer is made within the policy limits, does attorney (Coker) have duty to try to persuade Hartford to settle  without Foster's informed consent to the contrary? This Court answers yes. If at this point an attorney is willing to do this, he has duty to withdraw from further representation of the insured. By recommending Hartford settle for $25,000, Coker and Williamson risked exposing Foster to $250,000 excess liability ($300,000  $50,000) in order to save Hartford $25,000 ($50,000  $25,000). I would hold that the evidence at trial was sufficient to create a jury question regarding the undivided loyalty and the good faith of Coker and Williamson. Furthermore, if the jury found that Coker and Williamson breached their fiduciary duty, it naturally follows that Coker's and Williamson's breach of duty was the proximate cause of Foster's injury. After all, had Coker and Williamson persuaded Hartford to settle within policy limits, the jury could have found no breach of duty at all. The appellants contend there was no evidence to prove Hartford would have settled for $30,000. The appellants overlook Coker's testimony that Hartford followed his recommendations to the T. It is reasonable to infer from Coker's testimony that Hartford would have settled for $30,000 had Coker so recommended. Hartford's total reliance on the recommendations of the attorneys vested the attorneys with authority to make the ultimate settlement decisions.