Nation Union Fire Ins. v. Wuerth, C-2-03-0160.

• Citation: 540 F.Supp.2d 900
• Decision Date: 17 July 2007
• Docket Number: No. C-2-03-0160.,C-2-03-0160.
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Plaintiff, v. Richard O. WUERTH, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

540 F.Supp.2d 900

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Plaintiff, v. Richard O. WUERTH, et al., Defendants.

No. C-2-03-0160.

United States District Court, S.D. Ohio, Eastern Division.

July 17, 2007.

COPYRIGHT MATERIAL OMITTED

Richard Leo Creighton, Jr., Joseph M. Callow, Jr., Keating Muething & Klekamp, Cincinnati, OH, for Plaintiff.

Lawrence David Walker, Taft Stettinius & Hollister, Michael Hiram Carpenter, Carpenter & Lipps LLP, Columbus, OH, Thomas Thomsen Terp, Taft Stettinius & Hollister, Cincinnati, OH, for Defendants.

OPINION AND ORDER

GEORGE C. SMITH, District Judge.

Plaintiff National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("National") brings this action against Defendants Richard Wuerth and Lane Alton & Horst, who represented National's insureds in a federal trial in February, 2002, which resulted in an adverse verdict.

Defendants Wuerth and Lane Alton & Horst have moved for summary judgment (Doc. 105) and Plaintiff National has also moved for summary judgment (Doc. 109). For the reasons that follow, the Court GRANTS Defendants' Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.

I. FACTS

A. Background

Plaintiff National is an insurance company based in Pittsburgh, Pennsylvania. Defendant Lane Alton & Horst (hereinafter "Lane Alton") is a law firm in Columbus, Ohio and Defendant Richard Wuerth is an attorney and a partner of the firm.

This case is a legal malpractice action arising out of a lawsuit filed by Nationwide Mutual Insurance Company (hereinafter "Nationwide") against National Catastrophe Adjusters (hereinafter "NCA"), McLarens Toplis North America, Inc. (hereinafter "McLarens"), and McLarens' employee Lany Wood in the Court of Common Pleas of Franklin County, Ohio on August 26, 1999. The case was removed to this Court pursuant to the provisions of 28 U.S.C. § 1441, docketed as Case No. C2-99-1022 (hereinafter "the Nationwide case"). The matter was initially assigned to the late Judge Joseph P. Kinneary and was subsequently transferred to the docket of the Honorable Algenon L. Marbley.

Plaintiff National provided liability insurance coverage to McLarens and Lany Wood for the claims asserted against them in the Nationwide case. Richard 0. Wuerth of the Lane Alton law firm was retained to represent them. Plaintiff did not insure NCA, and Defendant Wuerth did not represent it in the Nationwide litigation. Nationwide's claims against McLarens, Lany Wood, and NCA exceeded $16 million. The trial to the jury, with Judge Marbley presiding, began on February 4, 2002.¹ Prior to the submission of the case to the jury, Plaintiff entered into a "high-low" settlement agreement with Nationwide on behalf of McLarens and Larry Wood. That agreement provided, among other things, that Plaintiff would pay Nationwide the amount of the jury's verdict up to the maximum of $8.25 million. On February 21, 2002, the jury returned a verdict in favor of Nationwide and against McLarens and Larry Wood for $16.2 million. Plaintiff paid Nationwide $8.25 million in settlement and was reimbursed by its reinsurers in the amount of $1,625,000. Plaintiff instituted this action on February 21, 2003 against Defendant Wuerth and his law firm claiming that Defendant Wuerth had committed malpractice in his representation of McLarens and Larry Wood in the Nationwide case, demanding the full $8.25 million it paid in settlement, notwithstanding that it has already recovered over $1.6 million from its reinsurers.

B. The Underlying Nationwide case

In 1997, Nationwide Mutual Insurance Company ("Nationwide") entered into a contract with NCA to provide claims adjusting services to Nationwide and its subsidiaries. Nationwide provided property damage insurance to Professional Hospitality Resources, Inc. ("PHR") for six hotels which it operated in Virginia Beach, Virginia. All six of those hotels were damaged by Hurricane Bonnie on August 28, 1998. Nationwide received notice of the potential claims from the insured and requested that NCA assist in adjusting the claims. NCA contacted McLarens to assist with this process and they in turn retained Larry Wood, an individual adjuster, to work on the project.

Mr. Wood was on the job eleven days before being removed. Nationwide alleged that Mr. Wood exceeded his authority and was negligent in adjusting the claims. Nationwide claimed that he improperly committed Nationwide to compensate PHR for over $16 million more than it otherwise would have paid if the claims had been properly adjusted. Nationwide initiated a lawsuit against NCA, McLarens, and Mr. Wood, referred to the Nationwide lawsuit above. McLarens was an insured of National and National retained Defendant Lane Alton to defend the case.

Defendant Wuerth assumed responsibility for the case and handled it almost exclusively by himself. The trial began on February 4, 2002. Defendant Wuerth, along with an associate, Beth Lashuk, represented McLarens and Larry Wood, National Union's insureds. Early in the second week of trial, Defendant Wuerth advised several Lane Alton partners that he was not feeling well. At about the same time, he also told the Court he felt unwell. However, he continued with the trial until Thursday, February 14, when he suffered from tremors, and was taken by Emergency Squad to Mt. Carmel East Hospital. He was examined by his family physician, James B. Soldano, the following day. Dr. Soldano opined, also in an affidavit, that Defendant Wuerth was physically incapable of continuing to participate in the trial and would be so for a significant period of time.

The Defendants moved for a mistrial arguing that Defendant Wuerth had become incapacitated and could no longer proceed with the trial. The Motion was argued before Judge Marbley on February 20, 2002. Judge Marbley, however, declined to grant a mistrial and other Lane Alton attorneys stepped in and completed the trial. In addition to the fact that Defendant Wuerth became ill and was unable to complete the trial, Plaintiff also claims that Defendant Wuerth has personal problems and alcohol abuse that interfered with his ability to practice as an attorney and properly defend National's insureds. Plaintiff highlights numerous incidents in which Defendant Wuerth made mistakes, failed to properly prepare for trial, and failed to inform National of critical issues and decisions regarding trial preparation.

In addition to asserting legal malpractice and misrepresentation claims against Defendant Wuerth, Plaintiff also alleges that Defendant Lane Alton is vicariously liable for Defendant Wuerth's legal malpractice as well as directly liable for its own wrongful acts, errors, and/or omissions. Plaintiff has moved for summary judgment. Defendants have also moved for summary judgment asserting various alternative grounds for its motion.

II. SUMMARY JUDGMENT STANDARD

The standard governing summary judgment is set forth in Fed.R.Civ.P. 56(c), which provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate, however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

When reviewing a summary judgment motion, the Court must draw all reasonable inferences in favor of the nonmoving party, and must refrain from making credibility determinations or weighing the evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).² The Court disregards all evidence favorable to the moving party that the jury would not be not required to believe. Id. Stated otherwise, the Court must credit evidence favoring the nonmoving party as well as evidence favorable to the moving party that is uncontroverted or unimpeached, if it comes from disinterested witnesses. Id.

The Sixth Circuit Court of Appeals has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice" ushering in a "new era" in summary judgments. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476 (6th Cir.1989). The court in Street identified a number of important principles applicable in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.

Additionally, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id. (quoting Liberty Lobby, 477 U.S. at 257, 106 S.Ct. 2505). The nonmoving party must adduce more than a scintilla of evidence to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party to merely "`show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita, 475 U.S. at 586, 106 S.Ct. 1348).

Moreover, "[t]he trial court no longer has a duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Id. at...