The Fourth District shields lawyers appointed to represent insureds from malpractice claims by insurers
Arch Ins. Co. v. Kubicki Draper, LLP, 266 So. 3d 1210 (Fla. 4th DCA 2019), review granted, SC19-673, 2019 WL 2386336 (Fla. June 6, 2019)
Rejecting federal precedent, ignoring numerous recent cases which relax the privity rule and Florida Bar Rules, the Fourth District Court of Appeal held that an insurer cannot sue a law firm retained to represent its insured.
Three federal court decisions held that the insurer is in privity of contract with the attorney hired to represent insureds or is a third-party beneficiary of the relationship between the attorney and the insured. See Hartford Ins. Co. of the Midwest v. Koeppel, 629 F. Supp. 2d 1293 (M.D. Fla. 2009); Nova Cas. Co. v. Santa Lucia, 2010 WL 3942875 (M.D. Fla. 2010) and U.S. Specialty Ins. Co. v. Burd, 833 F. Supp. 2d 1348 (M.D. Fla. 2011). The Arch Creek court correctly pointed out that these federal cases were merely persuasive authority and went on to state that they were “distinguishable”.
Hitchcock v. USAA Cas. Ins. Co.,2019 WL 719201 (M.D. Fla. 2019)
In ruling upon a Motion to Remand in federal court, Hitchcock addressed whether an insured had a cause of action against the insurer’s lawyer.
A Florida law firm was a Defendant along with an out of state insurance carrier. The Plaintiff was a Florida resident. The Plaintiff argued the Florida law firm defendant destroyed diversity and the case should be remanded to state court. The Defendant insurance carrier responded by alleging that adding the Florida law firm amounted to a fraudulent joinder and there was no possibility a cause of action could be established against the Florida law firm.
The Court explored whether the insured was in privity with the law firm or an intended third party beneficiary.
E.P. v. Hogreve, 259 So. 3d 1007 (Fla. 5th DCA 2018)
This case was decided on December 21, 2018. Nevertheless, I am taking the liberty of dragging it into 2019 and this month’s privity discussion. E.P. was cited by Arch Creek acknowledging the differences in outcomes which were distinguished away by stating E.P. was at the motion to dismiss stage while Arch Creek was on summary judgment.
Whether a child and his adoptive parents had privity to sue the lawyer who handled the adoption and follow on case to terminate the biological father’s rights was one of the issues in E.P.