Boyson v. Archer & Greiner, P.C., 308 N.J. Super. 287 (App. Div. 1998)
NJ Underlying Products Liability Action
Facts: The Defendant law firm was hired by the client to represent it as a defendant in a products liability action. The case was ultimately settled, and the client subsequently brought a malpractice action against the law firm to recover damages and defense costs. The client alleged that the law firm had negligently failed to provide notice to the client’s liability carrier which would have paid for the defense and provided indemnity for damages.
The law firm moved for summary judgment claiming that there was no coverage under the client’s comprehensive general liability policy under New Jersey law, and therefore, they were not negligent in failing to notify the carrier of the claim against the client. The client, however, alleged that Pennsylvania law governed the dispute, and that under Pennsylvania law, the insurance policy would have provided coverage to them in the underlying action despite a products hazard exclusion.
Issue: Did the law firm commit malpractice by failing to pursue a defense from the client’s liability carrier?
Ruling: The Appellate Division held that since the underlying action involved an injury that took place in Pennsylvania to a resident of Pennsylvania, New Jersey choice-of-law principles would require application of Pennsylvania law in deciding whether the law firm proceeded competently in defending the action.
Lesson: In a legal malpractice case, the choice of law to be applied is the law that would have governed in the underlying action.