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Divorce lawyer’s notice too late, carrier says

If a divorce lawyer suspects he screwed up a settlement agreement, should he quick call his carrier? Or should he try to make amends and just hope he won’t be served?

It depends. What did the lawyer know, when did he know it, and what did he do about it? Decisions about notice of claim come down to these questions. Here’s the timeline of a case pending in Richmond federal court.

Richmond-area lawyer Terry Batzli represented Richard Chasen in his 2006 divorce from Karen Chasen. According to Richard, he told Batzli he wanted to obtain Karen’s 20 percent interest in the family business, Chasen Properties LLC. Batzli made that proposal to Karen but received no response. He drafted an agreement that stated Richard would receive only “his” interest, not both his and Karen’s interest.

The drafting error was discovered after the agreement was signed, and Batzli filed a “motion to correct scrivener’s error” in August 2006 in Richmond Circuit Court. That court denied the motion in December 2006, and the Virginia Court of Appeals upheld that denial on May 20, 2008.

On Jan. 8, 2009, Richard Chasen sued Batzli for legal malpractice in Henrico County Circuit Court. On Jan. 14, Batzli notified Minnesota Lawyers Mutual, his malpractice carrier. MLM filed a dec action in Richmond U.S. District Court, saying Batzli had knowledge of sufficient facts that could have supported a claim “more than two years prior to the date of notice to MLM.”

On Nov. 4, U.S. District Judge Henry Hudson denied both sides’ motions for summary judgment, saying the notice issue turned on whether it was reasonable for Batzli to anticipate that his drafting error, which occurred before the MLM policy kicked in, would result in a claim under the policy.

This “critical factual dispute” could not be resolved on summary judgment, Hudson said.
By Deborah Elkins

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