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Opinion 694

Question Presented

Is it a violation of the Texas Disciplinary Rules of Professional Conduct for a plaintiff’s personal injury lawyer to agree as part of a settlement to personally indemnify and hold harmless the defendant, the defendant’s lawyer, or the defendant’s insurer from medical liens and reimbursement claims? If so, is it a violation of the Rules for the defendant’s lawyer to knowingly induce the plaintiff’s lawyer to enter into such an agreement?

Plaintiff sustained serious personal injuries in a motor vehicle accident. Medicare paid most of his medical and hospital bills. Plaintiff sued Defendant. Defendant’s insurance company hired a lawyer to defend its insured.

The case settled. The parties agreed that Plaintiff was responsible for satisfying all liens and reimbursement obligations arising out of the medical treatment made the basis of the suit. To protect against the possibility that Plaintiff might not satisfy those liens and obligations, the parties negotiated for Plaintiff to indemnify and hold harmless Defendant, Defendant’s lawyer, and Defendant’s insurance carrier (the “Defendant Group”) for any claims brought against the Defendant Group for contractual or statutory reimbursement. 

Defendant’s lawyer drafted and sent to Plaintiff’s lawyer a release to be signed by Plaintiff and Plaintiff’s attorney. In addition to requiring that Plaintiff satisfy all liens and reimbursement obligations and indemnify and hold harmless the Defendant Group, the release also provided that Plaintiff’s lawyer would personally indemnify and hold harmless the Defendant Group against any claims asserted by lienholders and reimbursement claimants.

When Plaintiff’s lawyer expressed a concern about signing a personal indemnity, Defendant’s lawyer advised that the execution of a personal indemnity by Plaintiff’s lawyer was a condition of settlement. Defendant’s lawyer explained that an indemnity from Plaintiff alone was inadequate because Plaintiff might no longer have funds sufficient to satisfy Plaintiff’s indemnity agreement if Medicare or other reimbursement claimants were to seek payment from the Defendant Group.

Bluebook Citation

Tex. Comm. On Professional Ethics, Op. 694 (2022)