Parnell v. Smart

Opinion

REGAN, J.

In this action plaintiff seeks damages from defendants-attomeys for alleged legal malpractice arising from their handling of an uninsured motorist claim.

Facts

On June 6, 1973, plaintiff’s wife was a passenger in a vehicle owned and operated by the Hudsons which was involved in a collision with an uninsured motorist. The collision resulted in the death of plaintiff’s wife.

Farmers Insurance Group was the insurer for the Hudsons. Grange Insurance Association provided uninsured motorist coverage to plaintiff. Plaintiff made a claim against Farmers Insurance for uninsured motorist benefits. Farmers allegedly wrongfully refused to pay any such benefits maintaining there had been an uninsured motorist coverage waiver executed by the Hudsons. Plaintiff then made a claim under his own policy with Grange and received the full limits of that policy ($15,000).

Thereafter, plaintiff instituted arbitration proceedings against Farmers. In those proceedings, Farmers retained defendants to represent Farmers’ interests. It is from the alleged mishandling of this claim by Farmers and its attorneys, the defendants, that the present action arises.

Prior to the arbitration hearing, plaintiff allegedly communicated several settlement offers to defendants, the last apparently being for $19,965.52. Some of the demands were refused and some lapsed because of defendants’ failure to respond in a timely manner. The matter then went to arbitration and resulted in an award of $43,457.50 in favor of plaintiff. This award was confirmed by the superior court and Farmers paid $15,000. The remaining $27,457.50 is still due and owing.

1

[836]

Plaintiff’s first amended complaint contains five causes of action, the first four of which are lodged against Farmers Insurance. Among other things, the complaint alleges a “bad faith” failure on the part of Farmers to settle the arbitration claim.

The fifth cause of action is against defendants and makes the following allegations: defendants owed a duty of care to plaintiff; defendants breached this duty by failing to convey settlement offers and all the facts of the accident to Farmers before the expiration of the offers; defendants were in possession of all of the facts and circumstances concerning the accident, and knew that a trial of the action would result in a verdict substantially in excess of the policy limits; and, defendants foresaw or should have reasonably foreseen the risk of harm to plaintiff created by their negligent conduct.