Every contact associated with a LAMA case has a designated Relation to that case (e.g. Petitioner, Defendant, Parcel Owner, etc.), which may matter for some LAMA functions like sending notifications, setting a license holder's name, who is selected as the default payer, and so forth.
On the Contacts tab, if the contact you want to change isn't already selected (it will have a light blue background if is), select it by clicking on the space to the left of the envelope icon.
From the Options drop-down on the Contacts tab, select "Change Relation Type".
Which Relation options you'll see will depend on the module you're in. This example is from the Permits module. A contact can have more than one Relation Type, so you can check all of the types that apply.