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Court Reinstates Malpractice Verdict

Posted Oct 9, 2007 7:15 AM CDT
By Debra Cassens Weiss

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A Pennsylvania appeals court has reinstated a $3 million verdict against an insurer and law firm for failing to settle a defamation case.

A Philadelphia jury had ordered the insurer, Continental Casualty Co., to pay $2.1 million for breach of contract and ordered lawyer Jonathan Herbst and his law firm, Margolis Edelstein, to pay $900,000 for legal malpractice, the Legal Intelligencer reports.

A trial judge had set aside the jury verdict and ruled against the plaintiff on a nonjury claim of bad faith against the insurer. The appeals court said the judge had no basis to overturn the award.

Plaintiff Marie Miller claimed she had asked Herbst several times to settle the case for the $1 million policy limit. She was hit with an $11.4 million verdict in the defamation case for an employee’s memo that falsely said a mortgage company was about to close.

The opinion (PDF posted by How Appealing) by the three-judge panel of the Pennsylvania Superior Court said the evidence showed "Herbst failed to adequately assess the settlement value of the defamation case and never offered more than $25,000 to settle the case prior to the trial."

The court also said testimony at trial showed "Herbst engaged in questionable conduct during the course of the litigation, including reading golf magazines during depositions, walking out of the most important deposition and thereby leaving Miller unrepresented, failing to file a motion for summary judgment with respect to the punitive damages claim, [and] failing to retain an expert who could rebut the mortgage company's expert."

Herbst told the Intelligencer that Miller had failed to prove the insurer would have paid more than $25,000 to settle the case, and he was disappointed by the ruling.

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