Can the underinsured-motorist insurer's lawyer talk to the defendant directly, and can the liability insurer's defense lawyer represent the defendant on the insurer's motion to bow out?

Plain-English summary

The inquiry involved a personal-injury suit with two insurers in the picture. The liability insurer (Liability Co.) retained Attorney X to defend Driver Two, the insured. Driver One's underinsured motorist insurer (UIM Co.) retained Attorney Y to appear in the suit, defending in Driver Two's name under the UIM statute. Liability Co. then sought to pay its limits and be relieved of further defense, retaining Attorney Z to petition the court; UIM Co. instructed Attorney Y to oppose that petition. Driver Two had no independent counsel.

On the first question, the opinion concluded that Attorney Y could not communicate with Driver Two about the defense without Attorney X's consent. It reasoned that UIM Co. has a statutory right (not necessarily a duty) to defend in Driver Two's name, so Attorney Y owes allegiance to the court and to UIM Co., whose interests may or may not align with Driver Two's at various times (for example, UIM Co. could later become adverse to Driver Two as Driver One's subrogee). Because Driver Two is represented by Attorney X (citing RPC 56), Attorney Y must obtain Attorney X's consent to communicate with Driver Two under Rule 7.4(a). To avoid frustrating the UIM statute, the opinion said Attorney X should normally consent on issues where UIM Co.'s and Driver Two's interests align, while Attorney Y should fully disclose his role and Attorney X should have the opportunity to be present.

On the second question, the opinion concluded that Attorney X could not represent Driver Two on Liability Co.'s petition to be relieved of the duty to defend, because, representing both the insurer and the insured, his representation of the insured would be materially limited by his responsibility to the insurer, and he could not reasonably believe otherwise, citing Rule 5.1, RPC 91, and RPC 92. Attorney Y, representing UIM Co.'s interest as an unnamed party, could appear in opposition to the petition.

Currency note

This opinion was issued in 1991, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. The no-contact and conflict provisions it applies (Rules 7.4(a) and 5.1) have since been renumbered (the no-contact rule is now Rule 4.2). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can the UIM insurer's lawyer talk to the defendant directly?

A: Not without the defense lawyer's consent. The opinion concluded that, because the defendant is represented by the liability insurer's defense counsel, the UIM insurer's lawyer must obtain that lawyer's consent to communicate with him under Rule 7.4(a).

Q: Should the defense lawyer give that consent?

A: The opinion stated that, to avoid frustrating the UIM statute, the defense lawyer should normally consent on issues where the UIM insurer's and the defendant's interests align, with the UIM lawyer disclosing his role and the defense lawyer having the opportunity to be present.

Q: Can the defense lawyer represent the insured against the liability insurer's motion to bow out?

A: No. The opinion concluded that representing the insured on that petition would be materially limited by the lawyer's duty to the insurer, which bars the dual role, citing Rule 5.1, RPC 91, and RPC 92.

Background and rules framework

The opinion applied North Carolina Rule 7.4(a), the no-contact rule barring communication with a represented person without the consent of that person's lawyer (corresponding to Model Rule 4.2), and Rule 5.1, the conflict-of-interest rule (corresponding to Model Rule 1.7), read together with RPC 56, RPC 91, and RPC 92 and the underinsured-motorist statute, G.S. 20-279.21. The analysis turns on the insured being represented by defense counsel and on the material limitation the insurer relationship places on that counsel.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 7.4(a) (no contact with a represented person without consent)
• North Carolina Rule 5.1 (conflicts of interest)
• MR 4.2 (communication with represented persons); MR 1.7 (conflict of interest, current clients)

Statutes:

• N.C. Gen. Stat. 20-279.21(b)(3)a, (b)(4) (underinsured motorist coverage; insurer's right to defend in the insured's name)

Other opinions cited:

• North Carolina RPC 56 (no contact; represented party)
• North Carolina RPC 91 (conflict between insured and insurer)
• North Carolina RPC 92 (insured is the primary client in insurer-funded defense)

See also

• NC Ethics Op. RPC 91: conflict between insured and insurer
• NC Ethics Op. RPC 92: representation of insured and insurer; work product
• NC Ethics Op. RPC 112: representation of insured and insurer

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-110/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Editor's Note: This opinion was originally published as RPC 110 (Revised).

Inquiry #1:

Driver One sued Driver Two for personal injuries sustained in a motor vehicle accident. The automobile liability insurance company (Liability Co.) that provided coverage to Driver Two retained Attorney X, who has appeared for and is engaged in the defense of Driver Two. Driver One has underinsured motorist coverage with UIM Co., and UIM Co. has retained Attorney Y to appear in the lawsuit to protect the interest of UIM Co. by defending in the name of Driver Two pursuant to G.S. §20-279.21(b)(3)a and 20-279.21(b)(4).

Liability Co. now wishes to pay its coverage and be relieved of any further liability or obligation to defend. Liability Co. has retained Attorney Z to petition the court for an order allowing that relief, pursuant to G.S. §20-279.21(b)(4). UIM Co. has instructed Attorney Y to oppose the petition as it relates to Liability Co.'s duty to defend.

Driver Two has not retained independent counsel to represent him in connection with the lawsuit or the petition by Liability Co.

May Attorney Y communicate with Driver Two concerning the defense of the lawsuit, without the consent of Attorney X?

Opinion #1:

No. Although the answer may depend on unresolved issues of statutory interpretation, UIM Co. has a statutory right (but not necessarily a duty) to defend the suit in the name of Driver Two. Thus, Attorney Y owes his allegiance to the court and UIM Co. whose interest may or may not be aligned with the interest of Driver Two on particular issues or at various times. For example, UIM Co. will initially share the interest of Driver Two in preventing or reducing recovery by Driver One, but UIM Co. may later be adverse to Driver Two on the same issues if UIM Co. becomes the subrogee of Driver One. Because Driver Two is represented by Attorney X (see RPC 56), Attorney Y (as counsel for UIM Co.) must obtain the consent of Attorney X to communicate with Driver Two. Rule 7.4(a). To avoid frustrating the rights granted to UIM Co. by the underinsured motorist statute, Attorney X should normally consent to communication on any issue where the interests of UIM Co. and Driver Two are aligned. However, Attorney Y should fully disclose his role to Driver Two, and Attorney X should have the opportunity to be present during the communication between Attorney Y and Driver Two.

Inquiry #2:

May Attorney X represent Driver Two in connection with Liability Co.'s petition to be relieved of its obligation to defend Driver Two?

Opinion #2:

No. Because Attorney X represents both the insurer (Liability Co.) and the insured (Driver Two), his representation of the insured would be materially limited by his responsibility to the insurer and he could not reasonably believe otherwise. Rule 5.1, RPC 91 and RPC 92. However, Attorney Y, representing the interest of UIM Co. as an unnamed party, may appear in opposition to the petition of Liability Co.