485 N.Y.S.2d 264 (1985)
The client was represented by the counsel to recover for injuries in a two-vehicle accident. The other driver's insurer retained the law firm and another attorney. During settlement negotiations, they represented that the limit of the driver's coverage was $ 15,000. The client settled for that amount, discovering later that it was for a greater amount. The client brought a misrepresentation action against the law firm, the attorney, and the insurer. Each set forth a cross-complaint against the counsel alleging it violated its duty of care to the client by its failure to verify the policy limits and that, in the event of the client's recovery, they would be entitled to indemnity or contribution from the counsel.
- On appeal of the dismissal of the third- and fourth-party complaints, the court found that the cross-complaints, seeking contribution based on the breach of the counsel's duty to the client, were legally sufficient.
- The court noted that the standard for determining justifiable reliance in an action for misrepresentation was quite different from the standard of reasonable care in a negligence or malpractice action.
- Reversing the order, the court reinstated the complaints.
The court reversed the order and reinstated the dismissed complaints against the counsel.
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