Charleston law firm files breach suit against malpractice insurer

By Lawrence Smith | Sep 9, 2011

R. Lindsay

CHARLESTON – A Charleston law firm is alleging its malpractice insurance carrier abandoned them in their time of need.

Richard D. and Pamela E. Lindsay, and their firm, Tabor Lindsay and Associates, filed a breach of contract suit against Attorneys Liability Protection Society, Inc. in Kanawha Circuit Court on June 17. In their complaint, the Lindsays allege the Missoula, Mont.-based insurance company denied last year their claim for coverage in a legal malpractice case.

According to their suit, the Lindsays became insured through ALPS in May 2004. Since then and through 2010, they kept the policy current paying all premiums in full.

In January 2008, the Lindsays were named as defendants in a pro se legal malpractice suit filed by Ronnie Smith. In his suit, Smith, in both his personal capacity, and as the administrator of the estate of Nancy E. Smith, alleged the Lindsays misappropriated funds they helped him obtain through settlement of a medical malpractice case in the mid-1990s.

Following its initial filing, Smith amended his complaint twice. The second complaint, which was filed on Sept. 23, included a claim for negligence.

According to the suit, Richard submitted a claim for coverage to ALPS on May 20, 2010, which included details of the minimal discovery completed at that time. Five days later, he received a letter from Jim N. Mickelson, ALPS' claims attorney, that, following consultation with the company's coverage counsel, he would receive an answer to his claim.

A month later, the Lindsays say they received a letter from John G. O'Neill denying their claim for coverage. In the letter dated June 23, 2010, O'Neil said the reason for denial was due to the failure of Smith to assert any claims against the Lindsays, and their failure to timely report the filing of the suit to ALPS.

Six days later, the Lindsays, again, asked for ALPS to provide them coverage in Smith's suit which they, again, denied on July 20. After Smith asserted his claim for negligence in his second amended complaint in September, the Lindsays made a third request for coverage which ALPS denied on Oct. 1.

Following the third denial, the Lindsays filed a third-party complaint against United Bank, and Charleston law firm of DiTrapano, Barrett and DiPiero requesting a finding they were entitled to coverage in Smith's suit. Despite subsequent discovery in Smiths' suit that "has revealed the lack of any culpability for any improper acts as alleged by Ronnie Smith," the Lindsays maintain "ALPS has continued to deny coverage."

In addition to breach of contact, the Lindsays make claims against ALPS for violation of the state Unfair Trade Practices Act, and common law bad faith. They allege the denial of coverage in the Smith suit has resulted in them not only incurring "substantial costs, expenses and attorneys' fees," but also suffering "severe emotional distress, mental anguish, inconvenience, annoyance, aggravation, humiliation, embarrassment [and] economic damage."

The Lindsays seek unspecified damages, interest, court costs and attorney fees. They are represented by Robert B. Warner and Tammy Bowles Raines of the Warner Law Offices in Charleston.

The case is assigned to Judge Charles E. King Jr.

Kanawha Circuit Court case number 11-C-1012

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