Imagine being involved in tragic accident that leads to a lawsuit. You’re the plaintiff, you show up to the first day of trial and discover that your attorney is also representing the defendant.
Anyone can understand why that makes no sense because it is impossible for your counsel to ethically and fully represent either client if they are busy serving their adversary.
In a case that has been litigated for the past 10 years, the University of Miami felt this way when their insurance company assigned one law firm for both the University and another party being sued by the same plaintiff.
The District Court of Appeal of Florida’s Third Circuit took a look at this in University of Miami v. Great American Assurance Company (Fla. 2d DCA Feb. 22, 2013).
This case stems from awful injuries sustained by a four-year-old child. On July 18, 2000, a boy enrolled in MagiCamp was pulled from the bottom of a pool at the University of Miami.
The child was unresponsive and required hospitalization for extensive injuries. His parents sued both MagiCamp and the University claiming both were negligent and that the injuries occurred due to a lack of supervision.
MagiCamp was a private company paying to use the University’s facilities. The University had been an additional named insured on a Great American general liability policy issued for MagiCamp.
Responding to the lawsuit filed by the child’s parents, MagiCamp claimed that an intervening act caused the injury and that the resulting damages were not caused, in whole or part, by MagiCamp. This means that MagiCamp was blaming the University.
Great American Assurance provided one law firm to represent both the University and MagiCamp.
The University claimed it was impossible for one firm to adequately represent both parties since there was a conflict of interest between them. The insurer refused to pay for two firms and the University retained its own counsel at its own expense.
After the case settled, the University brought a declaratory action requesting that the court find that Great American breached its contractual duty to the University by refusing to provide separate counsel.
The action sought indemnification for the costs associated with the University’s separate counsel. Great American responded by claiming it had no contractual, legal, or professional obligation to provide independent counsel for the University.
The insurer claimed that because MagiCamp had to indemnify and hold harmless the University for any liability arising out of the use of its facilities, there could be no conflict of interest in both MagiCamp and the University using one law firm. The trial court agreed with Great American and denied the University’s request for fees and costs.
The appellate court reversed and found that the University was entitled to fees and costs.
The court held that where two insured parties have been sued and each alleged that the other was directly negligent and thus liable, there is a conflict that requires the insurer provide separate and independent counsel for each.
This makes sense because where each party is essentially pointing the finger toward the other, there is no way for one counsel to adequately and fully advocate for either side.
I understand that to Great American it might not have mattered who was held responsible since each party was on their insurance policy, but it makes perfect sense why the University would want their own counsel.
Lawyers have to deal with conflict issues on a regular basis. The most frequent conflict I see in my practice is insurance company lawyers representing the people that we sue in motor vehicle accident cases.
Technically, the insurance company’s lawyer does not work for the insurance company, the work for the individual defendant. But lawyers–even insurance defense lawyers–are human beings and it is hard for them for them to choose their client’s interests over their own employer’s when those conflicts arise.
The Case: University of Miami v. Great American Assurance Company, ___ So. 3d ___, 38 Fla. L. Weekly D392 (Fla. 3d DCA Feb. 20, 2013).