Fire Ins. Exch. v. Bell - 643 N.E.2d 310 (Ind. 1994)

Rule:

The reliability of lawyers' representations is an integral component of the fair and efficient administration of justice. The law should promote lawyers' care in making statements that are accurate and trustworthy and should foster the reliance upon such statements by others.

Facts:

The mother settled an insurance claim with the insurer based upon her legal counsel's reliance on the attorney's representation about the policy limits, which in fact turned out to have been much higher than that represented. The mother brought an action against the defendants, insurer, law firm, and attorney, alleging that the law firm and attorney made fraudulent misrepresentations of insurance policy limits. The trial court denied the defendants’ motion for summary judgment. The court of appeals affirmed the decision that whether the mother's legal counsel had a right to rely on the alleged misrepresentations was a fact issue. The law firm and attorney sought further review.

Issue:

Did the mother’s legal counsel have the right to rely on the attorney’s misrepresentations?

Answer:

Yes.

Conclusion:

The court observed that Ind. R. Admis. B. & Discipline of Atty's 22 included a promise that the attorney's conduct was to have been consistent with the truth, and that Ind. R. Prof. Conduct 8.4 declared that an attorney who was dishonest, fraudulent, or made misrepresentations engaged in professional misconduct, as the basis for concluding that an attorney's representations were integral to the fair and efficient administration of justice. As a consequence, the mother's legal counsel had a right to rely on the attorney's misrepresentations irrespective of the fact that he had information which could have disclosed the insurance policy limits.