The Tennessee Court of Appeals recently ruled that public policy did not prevent an insurance company from bringing a legal malpractice claim against its insured’s attorney as the subrogee of the insured.
In Westport Insurance Corporation v. Howard Tate Sowell Wilson Leathers & Johnson, PLCC, No. M2023-01168-COA-R3-CV (Tenn. Ct. App. Sept. 18, 2024), plaintiff was the insurance carrier for a company called Brands. A truck driver’s Kentucky-based employer hired Brands to perform a driver history report before hiring the driver. Brands pulled three years of driving records and reported that the record was clean. Had they pulled five years, however, they would have found the driver’s accident history. The driver was hired by the company and was later involved in a serious car accident in Tennessee.
Multiple lawsuits were filed in relation to this car accident, and Brands was named as a defendant. Plaintiff insurance company was Brands’ liability insurance carrier. Plaintiff hired defendant law firm to represent Brands in the underlying suits, and defendant agreed to abide by Plaintiff’s litigation guidelines. At one point an attorney from defendant firm performed initial research into the defense of lack of personal jurisdiction, but that research was abandoned, as the attorney believed it was not a viable defense. Defendant never discussed the personal jurisdiction defense with plaintiff or Brands. Defendant eventually filed a motion to dismiss based on lack of duty. Defendant advised Brands that if the motion was not granted, settlement was advised.