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Legal Malpractice Insurer Has No Duty To Defend Lawyer in Lien Dispute

ISBA Mutual has won an appeal against a case filed by the McNabola Law Group, P.C., 2019 IL App (1st) 182386. McNabola handled a case for Scot and Patricia Vandenberg against Brunswick. While that jury was deliberating, there was a dispute as to whether McNabola obtained inside information about the jury’s deliberations before accepting the settlement. (That dispute is itself complicated and the facts are disputed. There have been multiple proceedings to sort out that dispute). The Vandenbergs discharged McNabola and retained new counsel. After the Vandenberg case settled, the Vandenbergs challenged the validity of McNabola’s lien. The Vandenbergs also sued McNabola for legal malpractice.

McNabola requested that his insurer, ISBA Mutual, handle the lien dispute. ISBA mutual refused on the ground that the dispute involved legal fees, not a malpractice claim. The trial court ruled that ISBA mutual had a duty to defend McNabola, but the Illinois Appellate Court disagreed and reversed. The holding follows:

ΒΆ 29 We find that the underlying motion did not seek damages arising from wrongful conduct as defined in the malpractice policy and contemplated by the parties. Accordingly, ISBA Mutual had no duty to defend McNabola against the Vandenbergs’ motion to adjudicate an attorney’s lien, and the trial court’s finding to the contrary was error.

Comment: the ruling is correct. The insurer should not have a duty to defend lien proceedings.

Ed Clinton, Jr.

https://www.clintonlaw.net/legal-malpractice.html