Sentry Select Insurance v. Maybank Law Firm

Sentry Select Insurance Company brought a legal malpractice lawsuit in federal district court against the lawyer it hired to defend an insured in an automobile accident case. The district court requested the South Carolina Supreme Court answer whether, under South Carolina law: (1) an insurer may maintain a direct malpractice action against counsel hired to represent its insured where the insurance company had a duty to defend; and (2) whether a legal malpractice claim be assigned to a third-party who is responsible for payment of legal fees and any judgment incurred as a result of the litigation in which the alleged malpractice arose. The Court responded in the affirmative to (1), reasserting an attorney would not be placed in conflict between his client's interests and the interests of the insurer. Thus, the insurer may recover only for the attorney's breach of his duty to his client, when the insurer proves the breach is the proximate cause of damages to the insurer. If the interests of the client are the slightest bit inconsistent with the insurer's interests, there can be no liability of the attorney to the insurer, because the attorney's duty to the client would not be permitted to be affected by the interests of the insurance company. Whether there is any inconsistency between the client's and the insurer's interests in the circumstances of an individual case is a question of law to be answered by the trial court. The Supreme Court declined to answer the second question posed. View "Sentry Select Insurance v. Maybank Law Firm" on Justia Law