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Keywords

settlementplaintiffdamagesattorneyliabilityappealmalpracticelegal malpracticegood faithbad faith
settlementplaintiffdamagesattorneyliabilityappealmalpracticelegal malpracticegood faithbad faith

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Lysick v. Walcom, 258 Cal.App.2d 136, 65 Cal.Rptr. 406, 28 A.L.R.3d 368

Facts

The case arose from a wrongful death action following a car accident that resulted in multiple fatalities. The plaintiffs, survivors of one of the deceased, sought to settle their claims against the estate of the insured, Bernard L. Rardin, who had a liability insurance policy with Allstate. After negotiations and a rejected settlement offer, the attorney retained by Allstate to defend the estate failed to adequately represent the interests of the estate, leading to a judgment against it that exceeded the policy limits.

The case arose from a wrongful death action following a car accident that resulted in multiple fatalities. The plaintiffs, survivors of one of the deceased, sought to settle their claims against the estate of the insured, Bernard L. Rardin, who had a liability insurance policy with Allstate.

Issue

Did the attorney breach his duty to the estate of Rardin by failing to disclose a conflict of interest and not advising the insurer to settle the wrongful death claims within policy limits?

Did the attorney breach his duty to the estate of Rardin by failing to disclose a conflict of interest and not advising the insurer to settle the wrongful death claims within policy limits?

Rule

An attorney representing both an insured and an insurer must disclose any conflicts of interest and act in good faith towards both clients, adhering to the general standards of professional care.

An attorney representing both an insured and an insurer must disclose any conflicts of interest and act in good faith towards both clients, adhering to the general standards of professional care.

Analysis

The court determined that the attorney had a duty to inform the estate of the settlement offers and the potential risks involved. By failing to disclose critical information and prioritizing the insurer's interests, the attorney violated the professional standards expected in such dual representation. The court concluded that this breach of duty was a proximate cause of the damages suffered by the estate.

The court determined that the attorney had a duty to inform the estate of the settlement offers and the potential risks involved. By failing to disclose critical information and prioritizing the insurer's interests, the attorney violated the professional standards expected in such dual representation.

Conclusion

The court reversed the judgment in favor of the attorney and remanded the case for further proceedings, indicating that the attorney's conduct constituted legal malpractice.

The court reversed the judgment in favor of the attorney and remanded the case for further proceedings, indicating that the attorney's conduct constituted legal malpractice.

Who won?

The plaintiffs prevailed in the appeal as the court found that the attorney had acted negligently and in bad faith, leading to damages for the estate.

The plaintiffs prevailed in the appeal as the court found that the attorney had acted negligently and in bad faith, leading to damages for the estate.

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