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Paradigm Insurance Company v. The Langerman Law Offices8/31/1999
ether an attorney-client relationship exists is normally an issue for the trier of fact. See id.
With respect to this issue, the parties agree on the following facts. Paradigm hired Langerman to handle the malpractice lawsuit filed against Dr. Vanderwerf, and a successful defense would benefit both Paradigm and Dr. Vanderwerf. Langerman advised Paradigm extensively regarding the progress of the case, including the likelihood of success, and Langerman consulted with Paradigm on matters such as settlement and expert witnesses. Thus, Langerman in fact provided legal services to both Paradigm and Dr. Vanderwerf.
Because there is no evidence of any conflict between Paradigm and its insured, a dual attorney-client relationship existed, and Paradigm is entitled to bring a malpractice action against Langerman. The trial court therefore erred in finding that Paradigm could not maintain a malpractice action against Langerman.
D. Langerman's Claim for Fees
Finally, Paradigm argues that the trial court erred in granting summary judgment in favor of Langerman on its claim for fees. It rejected Paradigm's argument that it was entitled to withhold the fees pending the resolution of the malpractice and breach of contract claims. Paradigm does not dispute that Langerman's requested fees were reasonable. Rather, it contends that pending the resolution of Paradigm's counterclaims against Langerman for malpractice, it was entitled to withhold the fees to offset them against any malpractice damages ultimately assessed. In support of this theory, Paradigm cites Andrews v. Wade & De Young, Inc., P.C., 950 P.2d 574 (Alaska 1997). Paradigm argues that the Alaska Supreme Court "never questioned the propriety of the clients' offsetting or withholding fees." We disagree because Andrews does not hold that a former client may withhold payment of attorneys' fees pending resolution of a malpractice claim against the attorney.
The court in Andrews cited Rowland v. Harrison, 577 A.2d 51, 57-58 (Md. 1990), which held that if a client were successful in a malpractice action against a veterinarian, she would be entitled to damages if successful but would not be entitled to restitution of the fees paid for treatment of her horse. The court in Andrews also noted that " t is conceivable that the attorney's malpractice caused less injury to the client than the cost of the services rendered." Andrews, 950 P.2d at 579.
Thus, the one case cited by Paradigm in support of its claim indicates that courts tend to separate malpractice awards from fee payment disputes, rather than allowing parties to withhold fees to offset a potential damage award. We therefore affirm the trial court's decision on this issue.
III. CONCLUSION
We reverse the trial court's summary judgment in favor of Langerman on the malpractice claim, affirm the trial court's judgment in favor of Langerman on its claim for attorneys' fees, and remand to the trial court for proceedings consistent with this decision.
MICHAEL D. RYAN, Presiding Judge
CONCURRING:
RUDOLPH J. GERBER, Judge
THOMAS C. KLEINSCHMIDT, Judge
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