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Ohio Court Rules In Favor Of Attorney In Insurance Dispute

Insurance coverage dispute

Goodman v. MEDMARC INS., 2012 Ohio 4061 – Ohio: Court of Appeals, 8th Appellate Dist. 2012 – Google Scholar.

This case involves an insurance coverage dispute. The lawyer was the policyholder and he was sued for legal malpractice. An Ohio court has ruled in favor of an attorney who tendered a claim to his carrier but was denied coverage.  Such litigation is common. The risk to the lawyer is that he ends up litigating two cases (a) the underlying malpractice case; and (b) the declaratory judgment case against the insurer.

The attorney answered a question on the insurance application – whether there were any pending or threatened claims against him – with the answer “No.”

The court explains that there was no claim pending at the time the question was answered in the negative:

“{¶13} The uncontroverted affidavits from Goodman and Stephens establish that, at the time the “Appeal Resolution” was executed, there was no demand for money or services made against Goodman, nor any suit, arbitration proceeding, motion, complaint, grievance, or other allegation of wrongdoing. Rather, the affidavits establish that Goodman informed Stephens that he had not filed the appeal; that Goodman agreed to return the $6,000.00 Stephens had given him to file the appeal; and that at that time neither party contemplated any further action. Stephens indicated in his affidavit that he was not displeased with Goodman’s representation and did not intend to sue Goodman at the time that they executed the “Appeal Resolution.”

{¶14} Stephens did not communicate any intention to file a claim against Goodman until he sent Goodman a letter, dated February 18, 2010. The complaint was not filed until March 8, 2010. As the policy period was from February 15, 2010 to February 10, 2011, the claim was made during the policy period.”

The court then held that Medmarc had a legal duty to defend Stephens in the underlying malpractice claim. This means that Medmarc will be required to hire a lawyer and defend the underlying legal malpractice case.

Edward X. Clinton, Jr.