When an insured demands copies of defense counsel's case-assessment letters to the insurer, must the lawyer hand over that work product?

Plain-English summary

A lawyer retained by a title insurer to defend an insured in a quiet-title action also faced a punitive-damages claim against the insured personally, which the insurer said was not covered; the insured hired independent counsel for the uncovered claim and, after putting the insurer on notice of a potential bad-faith claim, demanded copies of all of defense counsel's correspondence to the insurer, which contained counsel's thoughts and assessments of the case. The opinion addressed whether counsel had to turn over that work product.

The opinion concluded that, although the duty to keep a client reasonably informed obligates an attorney to comply with reasonable requests for information, nothing in the rules required defense counsel to furnish the insured the correspondence directed to the insurer during counsel's active representation of the insured. It explained that the representation of insured and insurer is dual, but the attorney's primary allegiance is to the insured, whose best interest must be served at all times. Counsel should keep the insurer informed of the insured's wishes about the defense and settlement, and keep the insured informed of counsel's case evaluation and the insurer's assessment, with advice to the insured about employing independent counsel whenever counsel cannot fully represent the insured's interest. Finally, if counsel reasonably believed it was in the insured's best interest to provide the insured with work product directed to the insurer, counsel could disclose it to the insured without violating any ethical duty to the insurer.

Currency note

This opinion was issued in 1991, before North Carolina's adoption of the 2003 revisions to the Rules of Professional Conduct, and it cites the rule numbering then in effect. 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 Treat this page as historical context, not current guidance.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: Did defense counsel have to give the insured its assessment letters to the insurer?

A: No. The opinion concluded nothing in the rules required defense counsel to furnish the insured the correspondence directed to the insurer during counsel's active representation of the insured.

Q: Whom did the lawyer owe primary allegiance to?

A: The insured. The opinion concluded that although the representation of insured and insurer is dual, the attorney's primary allegiance is to the insured, whose best interest must be served at all times.

Q: Could counsel share the work product with the insured if counsel chose to?

A: Yes. The opinion concluded that if counsel reasonably believed it was in the insured's best interest, counsel could disclose the work product directed to the insurer to the insured without violating any ethical duty to the insurer.

Background and rules framework

At the time, the opinion applied the duties of a lawyer who represents both an insurer and an insured, balancing the duty to keep the insured informed against the duty not to disclose information adverse to the insurer. In current numbering the subject matter corresponds to Model Rule 1.7 (conflict of interest) and Model Rule 1.4 (communication). It cited the then-current Rule 6(b)(1).

Citations and references

Rules of Professional Conduct:

• N.C. Rule 6(b)(1) (then in effect): keeping the client reasonably informed
• Current counterparts: Model Rule 1.7 (conflict of interest); Model Rule 1.4 (communication)

See also

• NC State Bar 2003 FEO 12: Insurer Settlement Advice
• NC State Bar RPC 91: Insured-Insurer Conflict
• NC State Bar 2010 FEO 1: Defending a Missing Insured

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-92/

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 92 (Revised).

Inquiry:

We have been retained by a title insurance company to defend title in connection with a quiet title action which has been commenced against a named insured of the title insurance company. The title insurance policy provides that the title insurance company "will defend your title in any court case that is based on a matter insured against." In addition to the claim seeking to quiet title, the plaintiff has asserted a claim against the insured, personally, seeking to recover punitive damages in connection with the transaction pursuant to which title to the disputed property was transferred to the insured. The title insurance company has advised the insured that the punitive claim involves a potential loss which is not covered by the title insurance policy and has invited the insured to secure independent counsel for the purpose of providing a defense with respect to this claim, and the insured has done so. The title insurance company now has received a settlement offer which is for a sum less than the insured value of the property in dispute. To avoid the potential punitive exposure, the insured, through independent counsel, has demanded that the title insurance company settle the dispute and has put the title insurance company on notice regarding a potential bad faith claim. The insured now has asked us in writing to provide the insured with copies of all correspondence which we have sent to the title insurance company regarding this matter. This correspondence contains our thoughts and impressions regarding the case in general and our assessments regarding the possible outcome of the litigation.

The issue which the insured's request presents is whether we have an obligation to the insured, as a client, to provide the requested information or whether we have an obligation to the title insurance company which is simply discharging its duty to defend title which is in dispute, as a client, not to provide information which the insured may subsequently attempt to use in a manner adverse to the insurance company.

Opinion:

While Rule 6(b)(1) obligates an attorney to keep the client reasonably informed about the status of the case and to comply with reasonable requests for information, there is nothing in the rules that requires defense counsel to furnish to the insured correspondence directed to the insurer during defense counsel's active representation of the insured. The representation of insured and insurer is a dual one, but the attorney's primary allegiance is to the insured, whose best interest must be served at all times. The attorney should keep the insurance company informed as to the wishes of the insured concerning the defense of the case and settlement. The attorney should also keep the insured informed of his or her evaluation of the case as well as the assessment of the insurance company, with appropriate advice to the insured with regard to the employment of independent counsel whenever the attorney cannot fully represent his or her interest. Further, if the attorney reasonably believes that it is in the best interest of the insured to provide him or her with work product directed to the insurer, such information may be disclosed to the insured without violating any ethical duty to the insurer.