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Pine Island Farmers Coop v. Erstad & Riemer

649 N.W.2d 444 (2002)

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Pine Island Farmers Coop v. Erstad & Riemer

Minnesota Supreme Court

649 N.W.2d 444 (2002)

Facts

Pine Island Farmers Coop (Pine Island) (plaintiff) was sued for negligently installing equipment at a dairy farm. Pine Island’s insurance company, Farmland Mutual Insurance Company (Farmland) (plaintiff), hired Erstad & Riemer, P.A. (Erstad) (defendant) to defend Pine Island in the lawsuit. Erstad dealt exclusively with Farmland for the first two months before ever contacting Pine Island. Erstad continued to consult with Farmland about legal strategy during the lawsuit. Eventually, the lawsuit settled for $1.05 million, with Pine Island paying a $10,000 deductible and Farmland paying the rest. After the settlement, Pine Island and Farmland learned that there was a clause in Pine Island’s contract with the dairy farm that provided a potentially crucial defense. However, Erstad had not read the contract during the lawsuit and never asserted this defense. Both Pine Island and Farmland sued Erstad for malpractice. The district court ruled that Erstad did not have an attorney-client relationship with Farmland and dismissed Farmland’s malpractice claim. The appellate court affirmed the ruling, and Farmland and Pine Island appealed.

Rule of Law

Issue

Holding and Reasoning (Page, J.)

Concurrence/Dissent (Gilbert, J.)

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