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Malpractice 'Notice' and 'Claims' Issues In Suits Against Entertainment Attorneys
The increase in recent years in malpractice claims against lawyers has impacted entertainment attorneys, too. If a malpractice complaint is filed, will the attorney's liability policy cover the suit? Two primary concerns here are whether the attorney has timely notified his or her insurer of a malpractice claim and how to determine the number of malpractice 'claims' for purposes of the insurer's malpractice-coverage obligations.
A recent ruling by the U.S. District Court for the Western District of Wisconsin addressed both issues, as well as which state's law should apply in interpreting malpractice policies. McCraw v. Mensch, 06-C-86-S. In the case, Ilinois-based music attorney Linda Mensch had served as counsel for the Wisconsin-based rock group the BoDeans for 12 years, beginning in 1985. She handled the legal work for the formation of the BoDeans operating entity, Keshaw Inc., as well as the group's publishing company, Lla-Mann Music Partnership. Mensch also negotiated a 1996 employment agreement between the BoDeans and their long-time manager Mark McCraw. The band-manager relationship later soured. In the summer of 2004, Mensch was deposed in litigation between the BoDeans and McCraw in Milwaukee County Circuit Court. (The band-manager litigation was settled after the circuit court judge ordered a retrial, following a 2005 trial.) On Dec. 3, 2004, the BoDeans' counsel wrote Mensch that the band planned to file a malpractice complaint against her. '[B]ased on your own testimony, I sincerely doubt that you are surprised to receive this letter,' the BoDeans' lawyer stated in the letter. Mensch sent a copy of the letter to her malpractice insurer, Illinois State Bar Association Mutual Insurance Co. (ISBA), which received it on Dec. 9.
Mensch's ISBA malpractice policies covered claims made against her during or within 60 days of the policies' expiration dates. Mensch was required to inform ISBA of any claims 'as soon as practicable.' The policy definition of a 'claim' was:
1. a demand received by YOU for money or services, or the service of a suit or the initiation of an arbitration proceeding against YOU that seeks DAMAGES arising out of YOUR WRONGFUL ACT;
2. an incident or circumstance of which YOU have knowledge that may result in a demand against YOU that seeks DAMAGES arising out of YOUR WRONGFUL ACT.
In addition, the policies stated:
Two or more CLAIMS arising out of a single act, error or omission or a series of related acts, errors or omissions will be treated as a single CLAIM ' all such CLAIMS will be subject to the Limit of Liability.
In a malpractice-policy renewal application Mensch filed in October 2004, she had responded 'no' to the question: 'During the past 12 months, has any current member of Applicant become aware of any circumstance or incident that could result in a claim or suit which has not been previously reported to ISBA Mutual?'
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