Legal Fee-Sharing Dispute re $400K Wasn't Covered by Malpractice Insurance, Federal Court Rules
When attorney Adam Clermont left Freedman DeRosa & Rondeau to form his own firm, he took several plaintiff’s personal injury files with him.
He and his former firm agreed to split the fees 50-50, but after Clermont got a $686,000 payout on one of them he didn’t ante up, writes Brian Margolies of Traub Lieberman Straus & Shrewsburg in an article posted on Lexology.
The FDR firm sued him in Massachusetts state court for the money, and federal insurance coverage litigation also resulted in the District of Massachusetts when . Although Continental Casualty Co. eventually agreed to defend Clermont in the case, it denied indemnity for the $400,000 he was required to pay, the article recounts, and the federal court agreed in a March 29 opinion (PDF) that the insurer wasn’t required to do so.
While the lawsuit against Clermont contained some malpractice allegations, it was, at its core, a fee dispute the federal court found and hence concerned a ministerial function rather than the practice of law. In reaching this conclusion, the court noted that law school courses usually don’t focus on fee arrangements or billing clients.
Hence, the federal court granted a summary judgment motion by the insurance company and dismissed the suit.
