Aiming straight for the source, client sues his lawyer's insurance carrier for legal malpractice
Client James Irwin sued his ex-attorneys and their insurer, Texas Lawyers Insurance Exchange, alleging the insurer's advice caused him to miss a deadline.
This is ironic.
New litigation alleges that a legal-malpractice insurance carrier has committed legal malpractice.
A client sued his ex-attorney for allegedly filing a document too late in connection with a real estate transaction. Now, in a twist, he’s also targeting the lawyer’s legal-malpractice insurance carrier, because it allegedly told him to wait too long to file his insurance claim.
The new litigation is by Central Texas resident James Irwin. It alleged that Texas Lawyers Insurance Exchange claims attorney Patricia Peterson told Irwin that the insurer and lawyers had accepted liability, and would pay his damages.
But the complaint alleged Peterson also said Irwin shouldn’t do anything until after a separate piece of litigation concluded, because it would determine his damages amount. But a couple of years later, Peterson told Irwin the statute of limitations had passed for him to file his insurance claim, the lawsuit alleged.
“I do not take lightly to suing attorneys, but this is such an egregious case,” said Joe Webber, an Austin solo practitioner who represents Irwin. “The thing that really causes me concern about this case is the way TLIE handles cases.”
Mike Yarber, president of Texas Lawyers Insurance Exchange, declined to comment. Peterson didn’t return a call seeking comment.
‘A plan and scheme’
The petition in the case said that Irwin’s former attorneys, Adam Stephen Wilk and Joseph Allen Halbrook Jr. of Sneed, Vine & Perry in Austin, represented him when he bought a piece of property in Austin.
Wilk, who declined to comment, allegedly made a mistake by waiting for 30 days to file a memorandum of purchase record and transmit it to local title insurance agencies, said the petition in Irwin v. Texas Lawyers Insurance Exchange. Because of the delay, the property’s seller entered an agreement with another party to sell the property. It was only after this occurred that Wilk filed Irwin’s memorandum of purchase, the petition said.
But Wilk and Halbrook, who didn’t return a call seeking comment, did not disclose this “negligence” to Irwin, the petition said. Instead they advised Irwin that his only chance of buying the property was to file a lawsuit. His lawyer in the 2016 litigation was Halbrook, the petition said.
“During discovery in the lawsuit Irwin learned of Wilk’s negligence and the fact that Wilk and Halbrook and Sneed Vine had failed to disclose Wilk’s negligence to him,” the petition said.
The attorneys then allegedly acknowledged the negligence and they withdrew from representing Irwin, the complaint said. Halbrook said that the law firm’s legal-malpractice insurance carrier, Texas Lawyers Insurance Exchange, would pay for Irwin’s damages. Halbrook said to call claims attorney Peterson to make his claim.
“Peterson indicated that she accepted Irwin’s claim and she did not deny the liability of Wilk and Sneed Vine. However, Peterson advised Irwin that she (TLIE) could not pay him his damages now because she (TLIE) wouldn’t know the extent of his damages until the Anglim lawsuit was finally concluded,” said the petition.
Peterson allegedly advised Irwin not to do anything until the end of his lawsuit.
But two years later, Irwin won his lawsuit in the trial court and it was pending on appeal, so he called Peterson again. The petition alleged Peterson told him the statute of limitations had run on his legal malpractice claim, and that he no longer had a claim, and he would need to hire an attorney.
“The defendants entered into a plan and scheme to insure that Irwin’s claim would never be honored by TLIE, and that he would never be paid for the damages he sustained as a result of Wilk’s admitted negligence,” the petition claimed. “The goal of the defendants’ plan was to make sure that Irwin ‘did nothing,’ until the two-year statute of limitations, as calculated by defendants, had purportedly expired.”
Bill Brown, president and shareholder of Sneed Vine, which is also a defendant in the case, didn’t return an email seeking comment.
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