Paradigm Insurance Company v. Langerman Law Offices

24 P.3d 593 (2001)


D issued an insurance policy covering Dr. V for medical malpractice liability. V and another doctor were sued by Renee Taylor, who alleged that V committed malpractice by injuring her during a catheter removal procedure. Taylor included Samaritan as a defendant, alleging that at the time of the negligent act, V was acting as Samaritan's agent or employee. D assigned defense of Taylor's claims to P. P advised D that it believed there was no viable theory of liability against Samaritan. P failed to investigate whether VV was covered by Samaritan's liability insurance and, thus, was unable to advise D whether the defense could be tendered to Samaritan. D learned that P had undertaken representation of a claimant who was bringing an action against another D-insured doctor. D claimed it violated an oral agreement between the two and D terminated P's representation in Taylor and retained new counsel for V. V's new lawyer discovered that Samaritan had liability coverage that not only covered V for Taylor's claim but probably operated as the primary coverage for the claim. New counsel advised D that the claim should be tendered to Samaritan's insurer. It was and tendered but rejected as the claim was not untimely. V’s claim was settled for the policy limits with D. P sent D a bill but D refused to pay in that P was negligent about not finding Samaritan’s policy. P sued for fees and D counterclaimed for damages. On summary judgment, the court held that there with no express agreement there was no attorney client relationship, and P had no duty of care to D and could not be liable for negligence that injured D alone and not V. D appealed and then appealed again.