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Keywords

attorneynegligencetrialmalpracticeduty of care
attorneynegligencetrialmalpracticeduty of care

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Paradigm Ins. Co. v. Langerman Law Offices, P.A., 200 Ariz. 146, 24 P.3d 593, 349 Ariz. Adv. Rep. 11

Facts

Paradigm Insurance issued a policy covering Dr. Vanderwerf for medical malpractice. After being sued for malpractice, Paradigm assigned Langerman Law Offices to defend Vanderwerf. Langerman failed to investigate whether Vanderwerf had additional coverage through Samaritan Insurance Funding, leading to a situation where Paradigm had to settle the claim without being able to seek contribution from Samaritan. Paradigm later refused to pay Langerman for legal services, claiming negligence, and Langerman sued for fees, prompting Paradigm's counterclaims.

Paradigm Insurance issued a policy covering Dr. Vanderwerf for medical malpractice. After being sued for malpractice, Paradigm assigned Langerman Law Offices to defend Vanderwerf. Langerman failed to investigate whether Vanderwerf had additional coverage through Samaritan Insurance Funding, leading to a situation where Paradigm had to settle the claim without being able to seek contribution from Samaritan.

Issue

Whether an attorney may be held liable to an insurer for negligence when the attorney's actions only damage the insurer, and whether an attorney-client relationship can exist between the insurer and the attorney without an express agreement.

Whether an attorney may be held liable to an insurer for negligence when the attorney's actions only damage the insurer, and whether an attorney-client relationship can exist between the insurer and the attorney without an express agreement.

Rule

An attorney-client relationship can arise without an express agreement, and an attorney may owe a duty of care to a nonclient, such as an insurer, under certain circumstances.

An attorney-client relationship can arise without an express agreement, and an attorney may owe a duty of care to a nonclient, such as an insurer, under certain circumstances.

Analysis

The court determined that the trial judge erred in concluding that no attorney-client relationship existed between Langerman and Paradigm. It found that Langerman's representation of Vanderwerf also implied a duty to Paradigm, as the interests of both parties often coincide. The court emphasized that the absence of an express agreement does not negate the possibility of an implied relationship, especially when the attorney's actions could foreseeably impact the insurer.

The court determined that the trial judge erred in concluding that no attorney-client relationship existed between Langerman and Paradigm. It found that Langerman's representation of Vanderwerf also implied a duty to Paradigm, as the interests of both parties often coincide.

Conclusion

The Arizona Supreme Court vacated in part, reversed in part, and remanded the case, allowing Paradigm to pursue its claims against Langerman for alleged negligence.

The Arizona Supreme Court vacated in part, reversed in part, and remanded the case, allowing Paradigm to pursue its claims against Langerman for alleged negligence.

Who won?

Paradigm Insurance Co. prevailed in part as the court recognized its right to pursue a malpractice claim against Langerman, establishing that an attorney may owe a duty to an insurer even without an express attorney-client relationship.

Paradigm Insurance Co. prevailed in part as the court recognized its right to pursue a malpractice claim against Langerman, establishing that an attorney may owe a duty to an insurer even without an express attorney-client relationship.

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