Thursday, March 8, 2012

Daley-Sand Violation Deemed Legal Malpractice

The following legal malpractice verdict in Levenson v. Debbie A. Carlitzwill will serve as sobering notice to Pittsburgh personal attorneys handling motor vehicle cases to adhere to the protocols of Daley-Sand v. West American Insurance Company, which requires the UIM carrier to“purchase” subrogation rights by matching the BI policy limit offer. The insured must provide the carrier with written notice of the policy limit offer together with reasonable time in which to match the offer.

On June 18, 1996, plaintiff Susan Glasshofer Levenson, 40s, unemployed, was a passenger in a car that was involved in an accident. The collision caused her to suffer a torn rotator cuff injury that would later require surgery. Levenson sued the driver of the vehicle that struck the car she was in.  Levenson's attorney recovered the driver's full insurance policy limit of $15,000.  The attorney, however, failed to obtain consent from Nationwide, the underinsured motorist carrier of the car that Levenson was a passenger in, prior to accepting the $15,000 from the other driver.  This oversight prevented Levenson from recovering additional damages from the driver's underinsured motorist coverage.

Levenson sued her attorney for legal malpractice alleging that the lawyer breached her duty to locate and file a claim against the driver's underlying auto insurance.

Plaintiff's counsel argued that the attorney didn't learn of the existence of the Nationwide underinsured motorist policy until 2002.  When the claim was finally filed the carrier denied it because the attorney had waived the carrier's right to litigate against the first carrier by accepting the $15,000 settlement.

Defense counsel argued that driver's carrier was not prejudiced because the tortfeasor had no assets that could be recovered after the policy was exhausted.

Plaintiff's counsel countered by contending that the defendant attorney was still obligated to file the claim and allow Nationwide to determine the viability of litigation prior to accepting any other offer. Counsel also asserted that the tortfeasor owned a home and that Nationwide could have litigated against the driver's assets. Counsel noted that Nationwide had obtained proof that the tortfeasor owned real estate, which could have been a source of satisfaction of its subrogation claim.

Following a bench trial, the judge  ruled that the defendant attorney was liable for legal malpractice and she awarded Levenson $85,000 in damages.

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