Liability Insurer Not Vicariously Liable for Malpractice Committed by Insurer Retained to Defend Policyholder against Third Party Claim
德克萨斯州最高法院裁定，责任保险人不对其选聘的独立辩护律师的执业过失承担替代责任，该案涉及保险人与被保险人之间的利益冲突及恶意拒赔问题。
State Farm Mutual Automobile Insurance Company v. Traver, 980 S.W.2d 625, 1998 Tex. LEXIS 158 (Texas Supreme Court; December 31, 1998). Under the usual terms an automobile liability policy, the insurer has a duty to defend and also the right to control the defense and possible settlement of any claims against the policyholder brought by third parties. This usually includes the insurer's right to select and supervise defense counsel at least to some extent along with the insurer's responsibility to pay defense counsel. But under the rules of legal ethics, the lawyer's client the policyholder. It to the policyholder to whom the lawyer owes duties of loyalty, zealous representation, and the avoidance of conflict of interest or other factors that might undermine the lawyer's professional judgment about how best to defend the case. This tension in the tripartite relationship among insurer, counsel, and policyholder has long been problematic and the source of considerable academic commentary and bad faith litigation. Where an insurer fails to settle a claim within the policy limits and the third party obtains a judgment against the policyholder in excess of the limits, the liability insurer frequently sued for bad faith refusal to settle. Recently, a policyholder in this situation not only sued the insurer for bad faith but also sought to hold the insurer liable for the alleged legal malpractice of the defense lawyer selected by the insurer. The Texas Supreme Court rejected this attempt in State Farm v. Traver, 980 S.2.2d 625 (1998). Specifically, the Court held that an insurer is not vicariously liable for the malpractice of an independent attorney it selects to defend an insured. See 1998 Tex. LEXIS 158 at (*)2. Mary Davidson, a State Farm policyholder, collided with Calvin Klause, also a State Farm policyholder, in an automobile accident. Mary Jordan, a passenger in the Klause car, was severely injured and brought suit. She obtained a $375,000 award plus $100,000 in prejudgment interest, an amount well in excess of the $25,000 per person liability limits in both the Davidson and Klause automobile insurance policies issued by State Farm. Davidson died shortly after trial but her estate (administered by Traver) pressed her claim alleging that State Farm had committed bad faith in spuming a settlement demand within policy limits made by Jordan. Davidson also alleged that State Farm was liable for the conduct of the defense attorney who failed to adequately defend Davidson while vigorously defending Klause. Davidson also alleged that her second-class defense had been a deliberate attempt by State Farm to cover itself from liability that might befall it for failing to agree to a settlement that paid the full Klause policy limits to the third party claimant and victim of the accident (Jordan). Jordan initially made a joint settlement demand to both defendants for their combined policy liability limits ($50,000) plus Klause's underinsured motorist coverage ($20,000). State Farm refused, offering instead Davidson's policy liability limit ($25,000), Klause's underinsured motorist coverage ($20,000), but only $5,000 of Klause's liability coverage. Jordan refused this counteroffer. Although State Farm later increased its offer to include Klause's full liability coverage (thus meeting Jordan's original demand), Jordan also refused this offer. See 1998 Tex. LEXIS 158 at (*)4, n. 2. In Texas as in other states, the insurer ordinarily liable for the amount of any excess judgment against the policyholder where the plaintiff made a demand for settlement at or below the policy limits and where there was no reasonable basis for rejecting the settlement offer. …