WWM Obtains Summary Judgment For Clients in Bad Faith Failure to Settle Lawsuit


On July 13, 2018, Walker Wilcox obtained summary judgment for Westport Insurance Corporation and its parent, SR Corporate Solutions America Holding Corporation (“SR Corporate”), in Anastasios Papadopoulos v. Westport Insurance Corp., pending in the Court of Common Pleas of Philadelphia County, Pennsylvania.

In 2011, Plaintiff Papadopoulos filed a legal malpractice lawsuit against a Philadelphia-area attorney insured by Westport. That lawsuit resulted in an excess judgment against the insured. The parties subsequently settled, and, as part of the settlement, the insured assigned his purported bad faith claim to Papadopoulos who sued Westport and SR Corporate. Papadopoulos also sued defense counsel that Westport retained to provide a defense to the insured in the underlying lawsuit.

In the bad faith lawsuit, Papadopoulos alleged that Westport and SR Corporate failed to advise the insured of the exposure he faced and, along with defense counsel, improperly eroded the policy limits by defending the lawsuit rather than settling. After extensive discovery, Westport and SR Corporate moved for summary judgment, arguing that: 1) SR Corporate is not an “insurer” within the meaning of the Pennsylvania bad faith statute, 42 Pa. C.S.A. § 8371; and 2) plaintiff has not met his burden of establishing bad faith by clear and convincing evidence as required by Pennsylvania law. The court agreed with both arguments.

With respect to SR Corporate, the court ruled that it is “simply a holding company as its name suggests.” Because Westport acted as the insurance provider, plaintiff could not assert a bad faith claim against SR Corporate.

With respect to Westport, the court cited to evidence developed in discovery that the insured was involved in all aspects of his defense and settlement. Westport reported regularly on defense costs incurred and the amount remaining in the policy. The policy also required that Westport obtain the insured’s consent to settle and the court noted that “Westport never denied [its insured] the ability to extend an offer.” The insured made the decision to go to trial, despite being fully apprised of the risks by Westport and defense counsel. In sum the court found that plaintiff failed to produce any evidence of bad faith conduct by Westport.

Westport and SR Corporate were represented by WWM lawyers Robert Conlon and Doug Walker.

WWM Successfully Represents Insurer in Bad-Faith Action Alleging Failure to Settle

WWM attorneys Robert P. Conlon, Christopher A. Wadley, and Ryan J. Rodman successfully represented RSUI Indemnity Company before the United States Court of Appeals for the Seventh Circuit in a lawsuit alleging that RSUI failed, in bad faith, to settle an underlying claim. In the lawsuit, West Side Salvage, Inc. alleged that RSUI breached a duty to settle an underlying lawsuit arising out of a grain bin explosion at a ConAgra facility in Chester, Illinois. In response, RSUI argued that it did not breach a duty to settle because either the claim was not covered or, even if covered, it did not act in bad faith. The trial court entered summary judgment in RSUI’s favor, concluding that the claim was covered, but that RSUI did not act in bad faith as a matter of law. The Seventh Circuit affirmed. The court concluded that the claim was excluded from coverage under the policy’s exclusion for damage to property on which the insured was performing operations. Accordingly, the court held that RSUI did not breach a duty to settle. West Side Salvage, Inc. v. RSUI Indem. Co., No. 16-3928 (7th Cir. Dec. 18, 2017).

WWM Wins Appeal in Washington

WWM attorneys Robert Conlon and Christopher Wadley won an appeal on behalf of WWM’s client, a professional liability insurance carrier, in the Court of Appeals of the State of Washington, Division Three.  The ruling affirmed the reasonableness of a reduced consent settlement ruling of the lower court, potentially saving the client more than $3 million.

A motion was filed by the claimant and an individual attorney insured under a professional liability insurance policy, in which the claimant and insured sought court approval of a proposed $3.8 million consent judgment to be entered against the insured without the consent of the insured’s liability carrier.  WWM successfully opposed the motion and the court found the proposed $3.8 million judgment to be excessive and reduced the amount to $688,875.  As the claimant and insured’s first settlement was not final, they entered a second settlement over a year later for $2.9 million or whatever lesser amount the court deemed reasonable.  Claimant then filed a “Petition for Finding New Settlement Reasonable and/or Motion for Reconsideration of Verbal Ruling.”  WWM moved to strike the petition, arguing that it was untimely and did not identify a basis in fact and law seeking reconsideration as required by CR 59(b). The court denied the new motion and granted WWM’s motion to strike.  The Judge entered an order finding that the reasonable settlement value of the consent judgment was $688,875, which claimant appealed.

On appeal the claimant attempted to argue that not having a hearing on the second settlement was improper under CR 59 and that the court failed to explain how it applied the individual reasonable factors delineated in Glover v. Tacoma Gen. Hosp., (98 Wn.2d 708, (1983)).  The Washington Division III Court of Appeals panel disagreed.  “He provides no legal authority suggesting that any of the three matters he relies upon is a reversible abuse of discretion and his arguments are unpersuasive.”  Accordingly, the court affirmed the lower court’s judgment.

Manuel Hidalgo v. Jeffrey Barker et al., 309 P.3d 687 (Wash. Ct. App. 2013)

WWM Wins Appeal in the United States Court of Appeals for the Third Circuit

WWM attorneys Robert Conlon and Robert Arnold won an appeal on behalf of WWM’s client, a professional liability insurance carrier, in the United States Court of Appeals for the Third Circuit.  The ruling affirmed the United States District Court for the District of New Jersey (USDCNJ) grant of summary judgment for WWM’s client.  WWM’s client declined coverage for a third-party claimant’s lawsuit for legal malpractice against one of the insured law firm’s attorneys on the basis that the lawsuit related back to another claim against the attorney made outside of the policy period and, thus, did not constitute a “Claim” made during the policy’s term of coverage. In response to the denial, the insured attorney and law firm filed a declaratory judgment action against WWM’s client in New Jersey state court alleging that the client breached the insurance contract by declining coverage for the claim. WWM successfully removed the matter to the USDCNJ and thereafter the insureds filed a motion for summary judgment. WWM’s client also filed a cross-motion for summary judgment. Continue reading

WWM Secures Significant Number of Occurrences Ruling from the Illinois Appellate Court in Wrigleyville Porch Collapse Coverage Litigation

Bob Conlon Successfully Argued for the Limitation of the “Time and Space” Test Adopted by the Illinois Supreme Court in Addison Ins. Co. v. Fay  to Cases Involving “Ongoing Negligent Omissions”

On January 11, 2013, the Illinois Appellate Court, First District issued a significant ruling on the issue of number of occurrences under a comprehensive general liability policy. As explained below, the Court’s ruling provides clarification and refinement of the Illinois Supreme Court’s number of occurrences decision in Addison Ins. Co. v. Fay, 232 Ill. 2d 446 (2009). Continue reading

WWM Obtains Summary Judgment for Client Insurer: No Duty to Defend or Indemnify Legal Malpractice Claims

In January 2012, Gilbert Sollek brought a declaratory judgment complaint seeking a declaration of rights under a claims-made-and-reported legal malpractice policy that Westport Insurance Corporation had issued to Sollek’s former lawyer, Vann Leonard. Sollek asserted a claim against Leonard in an underlying lawsuit alleging negligence, legal malpractice, and unjust enrichment due to Leonard’s alleged failure to negotiate a successful settlement of Sollek’s home equity line of credit with Sollek’s bank. Westport denied coverage for Sollek’s claim against Leonard, and for the claims of other former clients against Leonard, after Leonard pled guilty to multiple counts of embezzling clients’ funds from his trust account. Sollek sued Westport in Mississippi state court seeking to recover under Leonard’s malpractice policy. Westport subsequently removed the action to the U.S. District Court for the Southern District of Mississippi. Continue reading

WWM Successfully Defends Favorable Trial Ruling on Bad Faith Before 9th Circuit Court of Appeals

WWM Attorneys Robert Conlon and Christopher Wadley successfully defended, on appeal before the Ninth Circuit, a trial judgment they obtained in favor of a legal malpractice liability insurer in a complex, multimillion-dollar coverage and bad faith lawsuit. Weinstein & Riley, P.S. v. Westport Ins. Corp., Nos. 11-35325, 11-35341, 2012 WL 2024770 (9th Cir. June 6, 2012).

The case arose out of two underlying lawsuits involving the insured attorney. The first action, which was filed against the insured attorney in Oregon, involved the forced sale of a company that the attorney owned and controlled, and the separation of that company from the insured attorney’s law firm. The second action, which was filed against the insured attorney in Washington, involved malpractice claims against the insured attorney and his firm brought by the company he formerly owned and controlled, after the insured attorney sold his interests in the company. The insured attorney sought coverage from his legal malpractice carrier for approximately $2 million in attorney’s fees incurred in the underlying lawsuits. Continue reading