Client is injured. Attorney is hired. Attorney negotiates a rate of pay. Must the attorney look to see whether the client has insurance, and if so, how hard does the attorney have to look? Remember, if there is insurance there may be an insurance lawyer lurking and about to take over from the inquiring attorney.
Matz v Aboulafia Law Firm, LLC 2017 NY Slip Op 32147(U) October 10, 2017 Supreme Court, New York County Docket Number: 15506/2016
Judge: Kathryn E. Freed discusses this question.
“On July 23 and 24, 2011, the premises sustained damage due to electrical fires covered under the Marine Policy. Id., at pars. 19-20. On July 25, 2011, plaintiffs entered into a public adjuster compensation agreement with defendants Klein and Klein Inc. pursuant to which those defendants agreed to adjust the claims arising from the fires. Id., at par. 21. Klein and Klein Inc. were unable to resolve the claims. Id., at par. 22.
On or about July 11, 2013, Klein, Klein Inc., and Bauer recommended that plaintiffs retain defendants Aboulafia and the Aboulafia Firm to commence an action against Marine. Id., at par. 23. On or about July 18, 2013, plaintiffs retained Aboulafia and the Aboulafia Firm for this . purpose, and an action was commenced against Marine demanding damages of $300,000 on the ground that the company improperly refused to indemnify plaintiffs for the damages caused by the fires. Id., at par. 24. Defendants Klein, Klein Inc., and Bauer allegedly failed to inform Aboulafia and the Aboulafia Finn about the existence of the Technology Policy, despite the fact that they knew about the said policy and the action commenced on behalf of plaintiffs by Aboulafia and the Aboulafia Finn against Marine. Id., at p. 25. Although plaintiffs assert that their claims were worth approximately $140,000, Aboulafia and the Aboulafia Finn allegedly failed to act in their best interests by bringing a suit on their behalf as against TIC. Id., at par. 26. Thus, maintain plaintiffs, they were forced to settle their claims with Marine for an amount Jess than the full value thereof. Id., at pars. 27, 34. ”
“Construing the complaint in a light most favorable to plaintiffs, they have set forth a claim for legal malpractice”
“Whether an attorney has an obligation to investigate insurance coverage depends, in large part, on the scope of the agreed representation by the attorney. See Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34 (2d Dept 2006). Here, since the retainer
agreement executed between plaintiffs and the Aboulafia firm, which constitutes “documentary evidence” within the purview of that section (see generally Fontanetta v John Doe 1, 73 AD3d 78, 84-85 [2d Dept 2010]), clearly limits the firm’s representation only to commencing a property
damage claim against Marine. Doc. 26. That agreement further provides that the Aboulafia Firm “is to do no further work on this claim other than starting a suit against [Marine]. If further work is required, a separate retainer agreement must be executed by [plaintiffs].” Id. Given the express limitation on the scope of the Aboulafia firm’s representation, plaintiffs’ claim that Aboulafia and/or the Aboulafia Firm should have taken further steps to investigate other possible insurance coverage is thus without merit. See Rules of Professional Conduct (22 NYCRR 1200.0) Rule
I .2(c). “