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 its insured in an automobile accident case. The federal court certified two questions of South Carolina law to the South Carolina Supreme Court pertaining to: (1) whether an insurer may maintain a direct malpractice action against counsel hired to represent its insured where the insurance company has a duty to defend; and (2) whether a legal malpractice claim may be assigned to a third-party who was responsible for payment of legal fees and any judgment incurred as a result of the litigation in which the alleged malpractice arose. The South Carolina Court answered the first question "yes:" "However, we will not place an attorney in a 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, for we will not permit the attorney's duty to the client 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." As to question two, the Supreme Court declined to answer the question: "We are satisfied that our answer to question one renders the second question not 'determinative of the cause then pending in the certifying court,' and thus it is not necessary for us to answer question two." View "Sentry Select Insurance v. Maybank Law Firm" on Justia Law