1-7 Vicarious Liability of Insurer for Acts of Defense Counsel

• Jurisdiction: United States

1-7 Vicarious Liability of Insurer for Acts of Defense Counsel

The issue of whether an insurance company is vicariously liable for the malpractice of the attorney it selects to defend an insured was examined in Aetna Casualty & Surety Co. v. Protective National Insurance Co. of Omaha.³⁰⁶ After acknowledging a split of authority in other jurisdictions, the court was "persuaded by the reasoning of those cases which have held that an insurance company is not vicariously liable for the malpractice of the attorney it selects to defend the insured."³⁰⁷ This reasoning prevented Protective, an excess general liability insurance carrier, from suing Aetna, the primary general insurance carrier, and its counsel under an equitable subrogation theory for allegedly not raising a statute of limitations defense.³⁰⁸

Marlin v. State Farm Mutual Automobile Insurance Co.³⁰⁹ held that an insured could not sue his carrier for negligence in failing to exercise control over the insurance company's appointed attorney after an excess verdict was rendered against the insured. The court succinctly explained, "[a]s the insurer has no obligation or right to supervise or control the professional conduct of the attorney, it is not liable for the litigation decisions of counsel."³¹⁰

The Eleventh Circuit relied on both Aetna and Marlin in Kapral v. Geico Indemnity Co.³¹¹ In affirming the dismissal of the plaintiff's suit, it wrote:

Under Florida law, an insurer is not vicariously liable for the negligence of the attorney it retains to defend the insured, so long as the attorney is competent and qualified. See Marlin v. State Farm Mut. Auto. Ins. Co., 761 So.2d 380, 381 (Fla. 4th DCA 2000) . . . [and] Aetna Cas. & Surety Co. v. Protective Nat'l Ins. Co. of Omaha, 631 So.2d 305, 306 (Fla. 3d DCA 1994) . . . . Geico presented evidence showing, among other things, that Kapral's attorney had been licensed in Florida for 18 years and had owned a law firm where he practiced personal injury law for 8 years. . . .
Kapral's evidence shows, at most, that counsel was negligent in representing him. But as the Marlin and Aetna cases demonstrate, even if counsel's performance was negligent, Geico cannot be held liable. See Marlin, 761 So.2d at 381 . . . [and] Aetna, 631 So.2d at 306. . . . Although it appears that the Marlin and Aetna cases involved outside counsel, not salaried staff counsel, nothing in those decisions indicates that the result would be different in a case involving staff counsel. . .

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