The Rare Insurance Company v. Law Firm Legal Malpractice Case

95% of the cases we see are former plaintiff versus their attorney, and the balance are former defendant against their attorney.  Of those, only one or two are the insurance company versus their attorney after a settlement.  Here, in The Insurance Corp. of N.Y. v Smith, Mazure,
Director, Wilkens, Young & Yagerman, P.C. 
 
2014 NY Slip Op 30494(U)   March 3, 2014
Supreme Court, New York County   Docket Number: 102485/2008  Judge: Saliann Scarpulla plaintiff has avoided summary judgment, and the law firm comes back for a second shot.

"Briefly, in this legal malpractice action, plaintiff The Insurance Corporation of  New York (Inscorp) alleges that a Smith Mazure member, Joel Simon, Esq., provided  negligent legal advice to Inscorp in late 2004 and early 2005 regarding the coverage  available under a general liability policy issued by Inscorp to G.B. Construction LLC (the  policy). Inscorp alleges that Simon negligently advised Inscorp's third-party claims administrator, Ward North America (Ward), that Inscorp was contractually obligated to provide a defense and indemnification to both G.B. Construction and West Perry, LLC in an underlying Labor Law action, captioned Soto v. West Perry, LLC, et al. (Sup Ct, NY County, index No. 114283/2001) (the Soto action). Inscorp further alleges that Smith
Mazure improperly advised it to rescind as invalid and untimely two valid late-notice-of claim
disclaimers issued by Inscorp to G.B. Construction, a subcontractor, and to West Penn, the construction site owner. Inscorp alleges that the disclaimers were, in fact, enforceable because West Perry was not an additional insured under the policy, and because neither G.B. Construction nor West Perry had satisfied the policy's notice-of claim requirements."

In the prior order, this court denied Smith Mazure's summary judgment motion, holding that the parties raised triable issues regarding, among other things, whether Smith Mazure improperly simultaneously represented Inscorp and United National Insurance Group (UNG) on the relevant dates in November 2004 through February 2005 with respect to available insurance coverage for West Pen;r and G.B. Construction in the Soto action. In the prior order, the court also found that triable issues existed regarding whether the alleged negligent legal advice was a proximate cause of Inscorp's damages, and held that the damages alleged were sufficiently ascertainable to sustain a legal malpractice claim.

Smith Mazure contends for a second time that Inscorp cannot demonstrate the damages element of a cognizable legal malpractice claim because it cannot distinguish between the money that it expended in defending and indemnifying West Perry from the money that it expended in defending and indemnifying G.B. Construction, inasmuch as the defense and indemnification of both companies were handled simultaneously by a single law firm, Smith Mazure. In the prior order, this court considered this argument, and held that Inscorp's allegations that it incurred "$563, 173.13 in defending and settling the underlying Soto action on behalf of G .B. Construction and West Perry directly as a result of Simon's allegedly negligent coverage advice to Weiss [were] sufficiently actual and ascertainable to sustain a cause of action for legal malpractice."  Last, Smith Mazure argues for the first time that Inscorp cannot prove damages as a result of Smith Mazure's conduct because Inscorp was aware that West Perry was not an additional insured under the policy, prior to its settlement of the Soto action on behalf of West Perry. Inasmuch as Smith Mazure admittedly makes this argument for the first time, the argument cannot form a basis for reargument."

 

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