The Supreme Court of Mississippi has dismissed a legal malpractice action on the basis that an attorney-client relationship did not exist between the parties. In Great American E&S Ins. Co. v. Quintairos, Prieto, Wood & Boyer, an insurance company provided underinsured coverage to a nursing home, which also had a primary insurance policy from another insurer with coverage limits of $1,000,000. The underinsurer did not have to pay a claim until the primary policy’s limits were exhausted.
The estate of a former patient brought a negligent care action against the nursing home. The primary insurer then retained an attorney to defend the nursing home. Throughout the litigation, the attorney provided updates to both insurers, indicating that the settlement value of the case was no more than $500,000. However, the attorney failed to timely disclose an expert witness and was prohibited from using one at trial. The attorney then sent an updated evaluation, which estimated a settlement value between $3,000,000 and $4,000,000.
Based on the new evaluation, the primary insurer paid the policy limits to the patient’s estate, which left the underinsurer responsible for any excess liability. The underinsurer paid an undisclosed amount to settle the case and then sued the attorney for legal malpractice. The attorney successfully moved to dismiss the case and the insurance company appealed.
The appeals court reversed the dismissal finding that an attorney-client relationship existed because the attorney’s evaluations constituted legal services. The Supreme Court of Mississippi then granted certiori to review the decision. The court reversed, finding that imposing an attorney-client relationship on these parties would be inconsistent with the practice of litigation, because defendants with common interests often share evaluations and theories of the case. The suit was remanded for further proceedings on other issues.