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Lawyer’s notice to carrier not too late

A Richmond U.S. District Court upheld a jury verdict for a lawyer whose malpractice carrier denied coverage because of an alleged late notice of claim. But the court set aside nearly all of the $8,400 damage award to the lawyer.

On March 2, a Richmond federal jury awarded Richmond-area family law practitioner Terry Batzli damages in his suit against his carrier, Minnesota Lawyers Mutual Insurance Company.

A client complained about an alleged drafting error in a settlement agreement and sued Batzli for malpractice.

When the unhappy client filed his legal malpractice suit in Henrico Circuit Court on Jan. 8, 2009, Batzli gave notice of the claim to MLM on Jan. 14. 2009, two and one-half years after an alleged scrivener’s error in the client’s property settlement agreement. MLM denied coverage based on late notice of the claim, and followed up with a dec action in federal court. Batzli counterclaimed for breach of contract.

On May 18, Hudson upheld the liability finding for Batzli, but said he failed to provide evidence of the reasonableness of the legal fees he claimed as damages. The court awarded nominal damages of $1.00.

As to the notice issue, Hudson said Batzli provided “reasonable justification as to why he lacked the objective knowledge of facts that could support a demand for damages.” The fact that his client’s goal of maintaining control of a family business was “simply unattainable,” coupled with the client’s apparent overall satisfaction with the property settlement Batzli negotiated, “provided a legally sufficient basis for the jury to conclude Batzli did not reasonably believe that his drafting error could support a claim for damages.”

Not only did the former client testify he never indicated he might sue Batzli or his firm, the client promply paid his fees and continued a positive attorney-client relationship with Batzli.
By Deborah Elkins

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