1 novembre, 2006 18:20

Tardy Notice Cancels Insurer's Duty to Fight Legal Malpractice Claim

By Anthony Lin

New York Law Journal

11-01-2006

A professional liability insurer need not defend a law firm that failed to provide advance notice of a malpractice claim that "any reasonable" attorney would have foreseen, a New York judge has ruled.

Manhattan attorney Alan M. Cass and his firm, Alan M. Cass & Associates, had represented Elaine M. Lupo in a disability claim before the state Workers' Compensation Board stemming from an injury Lupo received while an employee of the New York City Board of Education.

Lupo's disability benefit, once $400 a week, was first reduced then suspended based on the report of an orthopedist hired by the city. Two doctors retained by the Cass firm failed to appear for hearings and their testimony was precluded. The hearing judge determined Lupo had no disability in a Nov. 4, 2005, decision.

After hiring new counsel in December 2005, Lupo sued Cass and his firm for malpractice on March 15, 2006. The firm informed their insurer, American Guarantee & Liability Insurance Co., the same day, but were denied coverage two weeks later on the grounds that the firm had not provided immediate notice of a potential claim as required by their policy.

In a decision issued Monday, Manhattan Supreme Court Justice Walter Tolub backed the insurer, finding that Cass and his firm should have known at the time of the Nov. 4 Workers' Compensation Board decision that they faced a potential malpractice claim.

The judge noted in Alan M. Cass v. American Guarantee & Liability Insurance Co., 601180/06, that the written decision noted a number of alleged missteps on the part of lawyers at the Cass firm, including their failure to notify the hearing judge that one of the doctors they had retained would not be able to appear at an already re-scheduled hearing. The hearing judge's decision also noted that the Cass firm did not seek to cross-examine the city's expert, whose finding that Lupo was not disabled went uncontradicted.

"These facts, taken together, would have led a reasonable attorney to have expected a potential malpractice claim by their former client," Tolub wrote. "Clearly, plaintiffs' first notice to AG&L on March 15, 2006 -- more than four months after a lawyer with plaintiffs' knowledge reasonably could have expected a claim -- was untimely as a matter of law."

The judge rejected the firm's argument that the malpractice claims were meritless.

"The issue is not whether or not plaintiffs actually committed malpractice, or whether they subjectively believed there was no conduct which could give rise to a claim, but whether a reasonable attorney would have expected a malpractice claim under the circumstances," the judge wrote.

Tolub also said that, based on the facts, the Cass firm had no reasonable belief that they were not liable that would excuse their late notice.

The Cass firm was represented by William G. O'Donnell of O'Donnell & Fox. American Guarantee & Liability was represented by Steven A. Coploff of Steinberg & Cavaliere.