Insurance settlement didn't cover fees, Justices rule

CHARLESTON – Erie Insurance attorneys thought they covered the other side's legal fees when they settled three sexual harassment claims against a bar in Wheeling, but the West Virginia Supreme Court of Appeals has ruled that the settlement didn't cover fees.

The Justices reversed Ohio County Circuit Judge James Mazzone, who told attorney Michael Olejasz of Wheeling to take his fee out of a $39,000 settlement he negotiated.

Now, each victim can keep her $13,000 share of the settlement, and Mazzone must figure out how much Erie Insurance owes Olejasz in fees and costs.

The decision sent a message to insurers that a settlement offer doesn't include legal fees unless it specifically says it does.

Erie Insurance covered TJ's Sports Garden and Restaurant in Wheeling, when three employees filed sexual harassment claims against the restaurant.

The three alleged violations of the state Human Rights Act, which allows a court to award attorney fees to a person with a successful claim.

Erie Insurance and the three settled at $13,000 each.

Olejasz asked Mazzone to award fees and costs, Mazzone denied it, and Olejasz petitioned the Supreme Court of Appeals.

Chief Justice Spike Maynard and Justices Joseph Albright, Robin Davis and Larry Starcher sided with Olejasz.

"While the language cited by the appellees arguably implies that costs and fees are included in the offers, it does not state it explicitly," their unsigned opinion stated.

"The apellees do not claim, and this Court can find nothing in the record to indicate that the parties discussed specifically the issue of whether attorney fees and costs would be included in the lump sum offers of judgment," they wrote.