Lawyer prevails in dispute with malpractice insurer in legal malpractice case
This is a dispute between a lawyer and his legal malpractice insurer. One of the major trends in recent years is the coverage lawsuit filed by the insurance company against the lawyer. Legal malpractice insurance is usually purchased for a one-year period. The insurer agrees to indemnify and defend the insured against any and all claims arising in that year and only that year. The policies are known as “claims made” policies, which means the insurance company must receive the claim during the policy period or there is no coverage.
The problem is, of course, that many client relationships predate the year that is covered.
The insurance company usually alleges that the lawyer failed to disclose a known or likely claim against him. Here, the federal district court denied the summary judgment motion of the insurance company. The court explained that the defendant should have submitted expert testimony or a learned treatise on the legal malpractice principles. The court wrote:
“Moving defendants’ indication that the court erred by not undertaking to determine itself whether Foster’s conduct in representing Yavorka should have given him notice of an impending claim is unavailing, as the court’s consideration of the evidence is not susceptible to second-guessing on a motion for reconsideration. Merely because other courts have been sufficiently persuaded without expert opinion in similar declaratory judgment cases does establish that it was clear error for this court to note that expert opinion would have perhaps helped it determine whether moving defendants had met their burden of proof, such that no reasonable jury could find they had failed to establish their affirmative defense. Moving defendants did not point to any learned treatise, practice manual, case law, or other source from which the court could discern the applicable standard of care without the assistance of expert testimony on the matter.”
This case highlights the endless battle between lawyers and their insurance companies.
Edward X. Clinton, Jr.