Insurance Law
$50K Payment Ends Indy Law Firm’s $18M Nightmare
Posted Jul 8, 2008, 03:56 pm CST
By Martha Neil
After worrying for two years about an $18 million jury verdict, partners of Fillenwarth Dennerline Groth & Towe were presumably delighted to ante up $50,000 to the Indiana Department of Insurance in order to win release from the judgment against the law firm.
In return, the Indianapolis-based law firm has transferred to the department its bad-faith claim against its malpractice insurance carrier, Alabama-based ProNational Insurance Co., reports the Indianapolis Business Journal. The carrier refused to settle the case before trial for the Fillenwarth's firm $1 million policy limit, and a Marion County jury then handed down the massive $18 million verdict.
The judgment concerned legal work done for the Indiana Construction Industry Trust by partner Frederick Dennerline III, who served as outside counsel for the collapsed trust. It provided health care coverage to non-union construction workers.
Settling with the law firm made sense, because the department is more likely to collect from the insurance carrier than from the law firm's limited assets, says Doug Webber, the department's chief legal counsel.
A ProNational lawyer could not be reached by the Business Times for comment. However, attorney Joseph Chapelle told an Indianpolis Star blog that the insurer denies that it acted in bad faith and intends to defend the case fully.
Partners at the 45-year-old law firm declined to discuss the settlement, but are undoubtedly relieved writes IndyStar reporter John Ketzenberger. "Attorney Bill Hurst told me two years ago, 'It's the worst, most god-awful thing I've ever seen.' "
Meanwhile, Ketzenberger says, they have restructured the firm to limit individual partners' personal liability.