In Paradigm Ins. Co. v. Langerman Law Offices, 24 P.3d 593, 200 Ariz. 146 (Ariz. 2001), insurance company Paradigm chose attorney Langerman to provide an insurance defense to a doctor who had been sued. Langerman was negligent, but her negligence only damaged the insurer, not the doctor and the insurer sued her for malpractice. Id. at pp. 594-96.
Langerman obtained judgment in the trial court by arguing that there was no formal retainer and all parties understood that she was representing the doctor, not the insurer and therefore, owed no duty of care to the insurer. Id.
The Arizona Supreme Court Ruling
The Arizona Supreme Court reversed, holding that Langerman owed Paradigm a duty of care if “it may fairly be said that because of other transactions an ordinary person would look to the lawyer as a protector rather than an adversary” and that belief was objectively reasonable. Id.
The Court was also adamant that an express oral or written agreement is unnecessary to create a duty and that it would not “be good policy to adopt that view.” Id.
If there is any reasonable ambiguity as to whether a lawyer is acting on an individual’s behalf, the duty rests upon the lawyer to clarify that ambiguity, not the alleged recipient of legal services. Franko v. Mitchell, 158 Ariz. 391, 392-97, 762 P.2d 1345 (App. 1988).