By Michael S. Perse

 
Last week, the Third DCA issued an opinion in the case of University of Miami v. Great American Assurance Company.  In this case, MagiCamp, a swim camp that used the University of Miami pool, had a general liability policy that named UM as an additional insured.  A child was injured at the camp and the parents sued UM and MagiCamp.  Great American retained one law firm to represent both parties.  In its answer and affirmative defenses, MagiCamp sought indemnification from UM and also sought to shift liability to UM.  UM advised Great American that there was a conflict of interest in one firm representing both MagiCamp and UM and claimed that MagiCamp was responsible for the child’s injuries.  However the insurer refused to provide independent counsel.

UM retained its own counsel and, after the case settled, brought an action for declaratory relief that Great American breached its duties to UM and sought indemnification for its attorney’s fees.  The trial court agreed with Great American that there was no conflict of interest because MagiCamp was contractually bound to indemnify and hold harmless UM so single-counsel representation was not improper.
The Third DCA reversed the trial court, holding that in this case, where the plaintiff alleged that each party was directly liable and where each party claimed that the other was responsible, “these allegations create diverse legal positions that are inherently adverse.”  The court further reasoned that one lawyer or firm would be required to argue wholly inconsistent positions on behalf of each client to the detriment of the other.
So what does this case mean for landlords who are listed as an additional insured on a tenant’s policy?  Chances are that you may find yourself in conflict with the tenant in the event of a lawsuit, particularly in one involving injury to person or property.  This case has paved the way for landlords to obtain their own counsel at the insurer’s expense if they promptly and properly identify conflicts of interest and notify the insurer.