In this Fourth Department case  Kumar v, American Transit Co, the Appellate Division has reversed and sent a case of legal malpractice back for trial.  It is an interesting application of equitable subrogation.  Plaintiff is an auto insurer who was involved in bad faith litigation.  Briefly, driver agrees to pay his policy limits of $ 25000 to settle a case.  [More likely, demanded the insurer settle within policy limits.]

Insurer tried to settle for $ 15,000 rather than the entire $ 25,000, and the case went sour, ending in a $ 500,000 inquest determination against driver.  Of course, bad faith litigation ensued, and now, the insurer sued Hiscock & Barclay, of Albany fame.  The AD is allowing them to continue the case on the basis that they "having paid the losses" of their insured, now step into his shoes.They blame the attorneys for not settling the case for the policy limits.