Professional Malpractice

Plaintiff’s counsel achieved a verdict in a professional malpractice case totaling $894,000, (exclusive of interest and attorney fees), which was comprised of a modest award for negligence and a much larger award for a “willing and knowing” violation of c. 93A.

The defendant’s insurance company had assigned counsel but defended their insured in the underlying litigation under a reservation of rights.  The insurer ultimately refused to indemnify their insured yet insisted on filing an appeal of the verdict despite their insured’s objection. The appeal failed at both the state appellate court and the SJC thereby creating an even larger accruing personal liability for the insured.

The insured assigned to plaintiff’s counsel its rights against its insurer. Eventually, the insurer filed a declaratory judgment action in the Federal District Court seeking a declaratory judgment that it owed no duty to indemnify its insured. The insured filed a counterclaim including allegations that the insurer failed to settle a claim where liability was reasonably clear.

Discovery revealed numerous communications between the insurer and their assigned counsel in the underlying Superior Court litigation. Because they were optimistic of success at trial, the insurer and assigned defense counsel rejected numerous settlement demands. The insured argued that his defense counsel had in fact urged the insurer not to settle. Despite the confidence of the insurer and defense counsel, the jury returned a verdict against the insured thereby causing him to incur personal liability.

By way of assignment, the insured eventually instituted a case against his underlying counsel and his insurer alleging that the underlying case should have been settled. In defense, his former lawyer suggested that a “tripartite” relationship existed and that he never violated his obligations to his client, the insured.

A global settlement was reached at mediation in sum of $1,150,000 which included contributions from both the defense counsel’s insurer as well as the original insured’s malpractice insurer.