Justia Professional Malpractice & Ethics Opinion Summaries

Letgolts and Plattner (plaintiffs) remodeled their home in 2008. The contractor, Pinchevskiy, did some demolition and then walked away, causing extensive damage to the home. The plaintiffs retained attorney Marks, who sued Pinchevskiy, the plaintiffs’ home insurer, and their insurance agent who allegedly inaccurately advised the plaintiffs that their existing homeowners' policy would cover possible property damage by Pinchevskiy. The complaint detailed property damage but did not mention personal injury. Marks withdrew from the case in 2012. The plaintiffs retained Pierce, who secured a default judgment against Pinchevskiy in 2015; his insurer, National, filed for liquidation before Pierce could collect on the judgment. Pinchevskiy was bankrupt.The plaintiffs sued Pierce for negligent delay in seeking recovery from National. Pierce’s lawyers argued the plaintiffs could never have prevailed against National because Pinchevskiy’s policy did not cover construction defects. The court entered judgment for Pierce. The court of appeal affirmed, rejecting the plaintiffs’ attempt to assert a personal injury claim based on Plattner’s alleged 2008 fall from temporary stairs installed by Pinchevskiy. National’s policy did cover personal injuries but the tardy, uncorroborated claim was at odds with the detailed lists of problems given to the insurer years before. Pursuing insurance money from National was a lost cause from the start, so whether Pierce committed malpractice did not matter, View "Letgolts v. David H. Pierce & Associates PC" on Justia Law

Following a preliminary hearing, petitioner Dr. Sanjoy Banerjee was charged in an information with two counts of presenting a false or fraudulent health care claim to an insurer (a form of insurance fraud, counts 1-2), and three counts of perjury (counts 3-5). The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause. Banerjee petitioned for a writ of prohibition to direct the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The Court of Appeal issued an order to show cause and an order staying further proceedings on the information, pending the Court's resolution of the merits of Banerjee’s petition. The State filed a return, and Banerjee filed a traverse. The State argued the evidence supported a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury, based on his violations of Labor Code section 139.3(a) between 2014 and 2016. During that period, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges were based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.” Banerjee argued: (1) the evidence showed he did not violate the statute's referral prohibition; (2) even if he did not comply with section 139.3(e), the “physician’s office” exception to the referral prohibition applied to all of his referrals to his two other legal entities; and (3) the patient disclosure requirement of section 139.3(e), the referral prohibition of section 139.3(a), and the physician’s office exception to the referral prohibition were unconstitutionally vague. The Court of Appeal concluded: (1) Banerjee did not violate section 139.3(a) by referring his patients to his two other legal entities; and (2) the evidence supported a strong suspicion that Banerjee specifically intended to present false and fraudulent claims for health care benefits, in violation of Penal Code section 550(a)(6), by billing the workers’ compensation insurer substantially higher amounts through his two other legal entities than he previously and customarily billed the insurer for the same services he formerly rendered through his professional corporation and his former group practice. Thus, the Court granted the writ as to the perjury charges but denied it as to the insurance fraud charges. View "Banerjee v. Super. Ct." on Justia Law

In this legal malpractice action by an insurer against a law firm retained to represent its insured in a separate prior litigation, the Supreme Court held that, where the insurer had a duty to defend, the insurer had standing through its contractual subrogation provision to maintain the malpractice action against counsel hired to represent the insured.The trial court granted summary judgment in favor of the law firm, concluding that the insurer lacked standing to directly pursue a legal malpractice action because there was no privity between the law firm and the insurer. The Fourth District Court of Appeal affirmed, concluding that the insurer lacked standing to pursue the professional negligence action. The Supreme Court quashed the decision below, holding that the insurer had standing to maintain this legal malpractice action because the insurer was contractually surrogated to the insured's rights under the insurance policy. View "Arch Insurance Co. v. Kubicki Draper, LLP" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of ALPS Property & Casualty Insurance Company and declaring that ALPS owed no duty to defend or indemnify Defendants in a malpractice suit, holding that the district court correctly granted summary judgment to ALPS.ALPS brought this action seeking a declaration that it owed no duty to defendant or indemnify Keller, Reynolds, Drake, Johnson & Gillespie, P.C. (the firm) or any of its members for claims Bryan Sandrock, GG&ME, LLC and DRAES, Inc. (collectively, Sandrock) asserted in a malpractice suit against the firm and three of its attorneys. In granting summary judgment for ALPS, the district court held that the firm's ALPS policy did not provide coverage for Sandrock's claim. The Supreme Court affirmed, holding that the district court correctly concluded that there was no coverage under the policy because a member of the firm knew the basis of the legal malpractice claim before the effective date of the policy. View "ALPS Property & Casualty Insurance Co. v. Keller" on Justia Law

The Louisiana Supreme Court granted this writ application to determine whether “collectibility” was a relevant consideration in a legal malpractice action. Specifically, the issue presented was whether plaintiff’s damages in this legal malpractice action were limited to the amount she could have actually collected on a judgment against the tortfeasor in the underlying lawsuit. Elaine Ewing was injured in an automobile accident in 2015, when her vehicle was hit by a vehicle driven by Marc Melancon. Her counsel failed to forward the original petition for damages within seven days as required by La. R.S. 13:850. The original petition was filed on April 22, 2016, after the one-year prescriptive period had passed. Ms. Ewing’s suit was dismissed on an exception of prescription. Ms. Ewing subsequently filed a legal malpractice action against her attorney and Westport Insurance Corporation, counsel's malpractice insurer. Defendants filed a motion for partial summary judgment asserting the court should apply the “collectibility rule.” Defendants alleged Ms. Ewing’s recovery could be no greater than her potential recovery in the underlying personal injury lawsuit, and recovery in this case should have been capped at Mr. Melancon’s insurance policy limits. The Supreme Court held that proof of collectibility of an underlying judgment was not an element necessary for a plaintiff to establish a claim for legal malpractice, nor could collectibility be asserted by an attorney as an affirmative defense in a legal malpractice action. View "Ewing v. Westport Ins. Co., et al." on Justia Law

David Murray purchased used computer equipment worth nearly $40,000, which was damaged by the United Postal Service (UPS) while it was being transported from California to Texas. Murray believed he purchased appropriate insurance to cover this loss, but the insurance company denied his claim. Murray sued his insurance broker, UPS Capital Insurance Agency (UPS Capital), for breach of contract and negligence, claiming UPS Capital owed him a special duty to make the insurance policy language understandable to an ordinary person and to explain the scope of coverage. The court granted UPS Capital’s motion for summary judgment after concluding there was no heightened duty of care and dismissed Murray’s lawsuit. On appeal, Murray asked the Court of Appeal to create a new rule that brokers/agents, specializing in a specific field of insurance, hold themselves out as experts, and are subject to a heightened duty of care towards clients seeking that particular kind of insurance. While the Court declined the invitation to create a per se rule, it concluded Murray raised triable issues of fact as to whether UPS Capital undertook a special duty by holding itself out as having expertise in inland marine insurance, and Murray reasonably relied on its expertise. Therefore, the Court reversed the judgment of dismissal and remanded the matter for further proceedings. View "Murray v. UPS Capital Ins. Agency, Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the circuit court directing a verdict in favor of Defendant, an insurance agent, on Plaintiff's claim that Defendant was negligent because he procured an insurance policy that did not conform to Plaintiff's requirements, holding that Plaintiff must prove that it would have qualified for an insurance policy with better terms than the policy it actually obtained.Plaintiff sold new and used camper trailers. Plaintiff asked Defendant, an insurance agent, to acquire a policy to cover its camper inventory. Plaintiff thought Defendant had acquired a policy with a deductible for $1,000 per camper in the event of hail damage with a $5,000 aggregate deductible limit, but the policy actually required a $5,000 deductible per camper, with no aggregate limit. After a hailstorm damaged many of the campers on its lot, Plaintiff sued Defendant. The circuit court directed a verdict due to Plaintiff's failure to introduce evidence that an insurer would have insured Plaintiff with the deductible limits it thought it had. The Supreme Court affirmed, holding that Plaintiff must not only prove that an insurance policy with the requested deductibles was commercially available but that Plaintiff would actually have qualified for that policy. View "Emer's Camper Corral, LLC v. Western Heritage Insurance Co." on Justia Law

The Louisiana Supreme Court granted review in this case to determine whether the Louisiana Commissioner of Insurance was bound by an arbitration clause in an agreement between a health insurance cooperative and a third-party contractor. The Louisiana Health Cooperative, Inc. (“LAHC”), a health insurance cooperative created in 2011 pursuant to the Patient Protection and Affordable Care Act, entered an agreement with Milliman, Inc. for actuarial and other services. By July 2015, the LAHC was out of business and allegedly insolvent. The Insurance Commissioner sought a permanent order of rehabilitation relative to LAHC. The district court entered an order confirming the Commissioner as rehabilitator and vesting him with authority to enforce contract performance by any party who had contracted with the LAHC. The Commissioner then sued multiple defendants in district court, asserting claims against Milliman for professional negligence, breach of contract, and negligent misrepresentation. According to that suit, the acts or omissions of Milliman caused or contributed to the LAHC’s insolvency. Milliman responded by filing a declinatory exception of lack of subject matter jurisdiction, arguing the Commissioner must arbitrate his claims pursuant to an arbitration clause in the agreement between the LAHC and Milliman. The Supreme Court concluded, however, the Commissioner was not bound by the arbitration agreement and accordingly could not be compelled to arbitrate its claims against Millman. The Court reversed the appellate court's judgment holding to the contrary, and remanded the case for further proceedings. View "Donelon v. Shilling" on Justia Law

In 2010, the Foundations and their insurance broker, Gallagher, discussed the renewal of the Foundations’ $25 million directors and officers (D&O) insurance coverage. The Foundations wanted to obtain the same coverage with a reduced premium. Gallagher offered renewal of the existing Chubb policy or the purchase of a $25 million Chartis policy, stating that the Chartis policy provided the same coverage with a premium that was $3400 lower. Unbeknownst to the Foundations, the Chartis policy contained a broad exclusion of claims related to securities transactions; the Chubb policy contained a narrower exclusion. In 2007, the Foundations sold their Tribune stock for $2 billion during a leveraged buyout. A year later, the Tribune filed for bankruptcy. The Foundations were named in suits filed by aggrieved shareholders, alleging fraud. The Foundations tendered the litigation to Chartis, which denied coverage. The Foundations, asserting that Chubb would have defended and indemnified them, sued Gallagher for breach of contract and professional negligence. Gallagher’s defenses asserted that the Foundations’ conduct was fraudulent and uninsurable and that the Foundations knew of “an ongoing, progressive loss” before changing insurers. Gallagher subpoenaed the Foundations and their attorneys, seeking communications related to the Tribune bankruptcy and the litigation. The Foundations asserted attorney-client privilege. The circuit court applied an exception, finding that Gallagher had a “common interest” with the Foundations because it was “standing in the insurer’s shoes for the purposes of this malpractice issue and may bear the ultimate burden of payment of the underlying claims and defense costs.”The Illinois Supreme Court reversed. The common-interest exception to the attorney-client privilege does not extend to these circumstances, where there is no insured-insurer relationship between the parties and the party claiming the privilege is bringing suit based on the defendant’s negligence in failing to procure appropriate insurance as a broker. View "Robert R. McCormick Foundation v. Arthur J. Gallagher Risk Management Services, Inc." on Justia Law

At the summary judgment stage, the district court found that an employee of Greenwald Neurosurgical, P.C. caused over $100,000 in losses to the P.C., while he was acting in the ordinary course of the P.C.’s business. The district court then issued a judgment to the P.C. for the policy amount of $100,000 pursuant to a Dishonesty Bond issued by Western Surety Company. Western appealed the district court’s determinations that the employee caused the loss while acting in the ordinary course of business and that the P.C. actually suffered the loss. The P.C. cross-appealed the district court’s findings that it was the only entity insured under the bond and argued it was awarded too little by way of attorney’s fees. The Idaho Supreme Court determined: (1) the district court correctly concluded that only the P.C. was an insured and the only entity that could recover under the bond; (2) whether the employee was acting the “ordinary course of [the P.C.’s] business” was a jury question; (3) a genuine issue of fact existed regarding the amount of losses the P.C. sustained; and (4) the district court erred in awarding attorney’s fees to the P.C. The Supreme Court therefore vacated summary judgment, and remanded for further proceedings. View "Greenwald v. Western Surety" on Justia Law