Insurance Law

Insurer sues own lawyer for $43M in Big Dig coverage case, says competing carrier was a client, too

Edwards Wildman Palmer is facing a New York malpractice claim from an insurance company the law firm represented in a Boston coverage matter.

At issue in the underlying case was a fatal 2006 accident in which some 26 tons of ceiling tile from the so-called Big Dig highway tunnel project fell onto and partially crushed a vehicle traveling through the tunnel nearly a decade after the project was completed. National Union Fire Insurance Co. of Pittsburgh, which provided commercial liability insurance coverage to a company that installed ceiling tile in the tunnel, asked Edwards Wildman to determine whether National Union should defend and pay the claim against its policyholder, Modern Continental Construction, Courthouse News reports.

But, unbeknownst to National Union, the law firm also represented The Travelers Cos. Inc., a competing carrier which, through a subsidiary, had provided a performance bond or bonds concerning Modern Continental’s work on the Big Dig project. That conflict precluded Edwards Wildman from representing Modern Continental but was not disclosed for at least two years, contends a lawsuit filed by Modern Continental against Edwards Wildman in Manhattan Supreme Court. The insurer has its headquarters in New York.

Although attorney John Hughes, working on the matter in the law firm’s Boston office, recognized the conflict issue in 2010, it was not until 2012, as a damages suit brought by the city of Boston and the state of Massachusetts against Modern Continental was about to go to trial, that Edwards Wildman bowed out, via an emergency motion, the new lawsuit says. As a result, National Union had to spend millions to bring in another law firm and get its new counsel up to speed on the case.

“Notwithstanding Hughes’ admitted recognition of the existence of a conflict in February 2010, until early summer 2012, neither Hughes nor anyone at Edwards Wildman ever informed National Union about an actual or potential conflict involving Travelers in connection with the coverage representation, nor did Edwards Wildman consult with National Union, nor did Edwards Wildman ever seek or obtain a written waiver in writing from National Union of the conflict,” the insurer alleges in the malpractice suit.

A spokeswoman for Edwards Wildman said the firm believes “the allegations in the complaint have no merit” and promised a vigorous defense. She declined to comment specifically on a matter that is in litigation, Courthouse News reports.

The suit seeks $10 million in damages, attorneys fees and costs; disgorgement of some $3 million in legal fees previously paid to Edwards Wildman; punitive damages; and either treble damages or $30 million under a New York law that punishes lawyers determined to have been involved in deceit or collusion.

See also: (2008): “Final Answer for Victim’s Family in Boston ‘Big Dig’ Death: $28M”

Boston Globe (2008): “Manslaughter charges dismissed in Big Dig collapse”

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