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Keywords

settlementdefendantattorneylawyertrialmotionsummary judgmenttrust
settlementplaintiffattorneylawyerappealtrialmotiontrustlegal counselappellee

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Fire Ins. Exchange v. Bell by Bell, 643 N.E.2d 310, 63 USLW 2415

Facts

On May 28, 1985, sixteen-month-old Jason Bell was severely burned in a fire at his grandfather's home due to improperly stored gasoline. Jason's mother retained attorney Robert Collins to represent him in claims against the homeowner's insurer, Farmers. Throughout the negotiations, Collins was misled by the insurer's representatives about the policy limits, which were actually $300,000, but were represented to him as $100,000. After settling based on this misinformation, Collins later discovered the true policy limits and advised Bell to seek further legal action against the insurer and its law firm.

The factual allegations favoring the plaintiff as non-moving party are as follows. On May 28, 1985, sixteen-month-old Jason Bell was severely burned in a fire at the Indianapolis home of Joseph Moore (Moore), Jason's grandfather.

Issue

Whether a party represented by counsel has the right to rely on representations made by opposing counsel during settlement negotiations.

The principal issue in this case is whether, and to what extent, a party who is represented by counsel has the right to rely on a representation by opposing counsel during settlement negotiations.

Rule

A lawyer's representations are expected to be honest and trustworthy, and reliance on such representations is a legal right, particularly in the context of settlement negotiations.

A lawyer's representations have long been accorded a particular expectation of honesty and trustworthiness.

Analysis

The court determined that the question of whether Jason Bell's attorney had the right to rely on the alleged misrepresentations regarding the policy limits was a factual issue for the jury. The court emphasized the importance of trust in attorney representations and rejected the argument that the attorney should have independently verified the information provided by opposing counsel.

We therefore reject the assertion of Ice Miller and Scaletta that Bell's attorney was, as a matter of law, not entitled to rely upon their representations.

Conclusion

The Supreme Court affirmed the trial court's denial of the defendants' motions for summary judgment and remanded the case for further proceedings, establishing that the attorney's right to rely on opposing counsel's representations is a matter of law.

Transfer is granted. The opinion of the Court of Appeals is vacated in part and summarily affirmed in part.

Who won?

Jason T. Bell prevailed in the case because the court recognized his attorney's right to rely on the misrepresentations made by the insurer's attorney, which was deemed a question of fact for the jury.

In denying the motions, the trial court determined that the question of whether plaintiff-appellee Jason T. Bell's legal counsel had the right to rely upon alleged misrepresentations regarding the policy limits is a question for the fact-finder.

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