Keck, Mahin & Cate v. National Union Fire Insurance Co. of Pittsburgh
20 S.W.3d 692 | Texas Supreme Court | 2000
What This Case Means for Subcontractors
An excess insurance carrier sued attorneys and a primary insurance carrier for mishandling a defense, claiming it was forced to overpay a settlement. The Texas Supreme Court ruled that a release agreement between the client and attorneys does not completely block the excess carrier's right to recover losses through subrogation. The court also allowed defendants to argue that the excess carrier's own negligence contributed to the overpayment. This matters to subcontractors because it clarifies how insurance disputes are handled when multiple carriers are involved and settlements go wrong.
Key Takeaways
- •Release agreements with your attorney don't fully protect them from insurance carrier claims—excess carriers can still pursue subrogation for alleged malpractice
- •If you settle a claim, the insurance companies involved may later sue each other over who should bear the cost, even if you thought the matter was closed
- •When disputes arise between your primary and excess insurers, each can argue the other was negligent—this can drag out resolution and increase costs
The release agreement is not a complete bar to equitable subrogation claims.
Frequently Asked Question
If I sign a release with my attorney, can my insurance company still sue them later?
Yes. A release agreement between you and your attorney doesn't prevent your excess insurance carrier from suing the attorney or primary carrier for subrogation—meaning they can recover money they paid out if they claim the defense was mishandled. This is true even if you thought the release settled everything.
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