Speculative Damages Doom Malpractice Suit

The Montana Supreme Court affirmed the dismissal of a legal malpractice claim in a matter involving injuries sustained in a boating accident.

The plaintiff had suffered severe injuries when thrown overboard and struck by the outboard motor.

On July 12, 2007, the Plaintiffs were passengers in the boat and Wurth was the driver. The boat encountered a wave, and Wurth and Young were thrown from the boat. The propeller from the outboard motor struck Young several times and she was severely and permanently injured. Rose, who was a child at the time, witnessed her mother’s injuries and also suffered compensable injuries as a result of the boating accident. It is undisputed that the boat was outfitted with an 85-horsepower Evinrude outboard motor at the time of the accident that was not the same outboard motor attached to the boat when Rod Wurth [defendant’s father] purchased and titled the boat in 1994.

The defendant boat owner in the underlying litigation (who had taken the boat when his father died) was serving a sentence for money laundering.

The defendant (here) law firm secured a $1.3 million judgment but were unable to collect.

Plaintiff secured new counsel who discovered a Travelers insurance policy for $500,000 of the defendant’s mother

Some years later, the Plaintiffs hired new counsel, Evan Danno, to collect on the judgment. Danno discovered Wurth’s mother, Carolyn Jenson, had a homeowners insurance policy (the “Policy”) through Travelers Insurance Company with a $500,000 policy limit. The Policy was in effect on July 12, 2007, and provided coverage for certain liabilities incurred by resident relatives. Wurth resided in his mother’s home on the date of the boating accident and as a resident relative qualified as an insured.

Travelers paid $100,000 as a “costs of litigation” settlement; plaintiffs sued the first law firm for failure to discover the policy and collect policy limits .

Unfortunately, the policy did not cover

Here, the Plaintiffs alleged they were injured by HHJF’s failure to discover the Policy and make a claim for damages under it. HHJF has established there was no coverage under the Policy for the Plaintiffs’ losses incurred from the boating accident and a claim against the Policy would not have survived a motion for summary judgment in a declaratory judgment action. “[A] claim completely devoid of merit is truly no loss at all.” Labair I, ¶ 33. While the Plaintiffs argue and submitted affidavits from experts who opined Travelers may have settled for policy limits regardless of actual coverage had HHJF submitted a claim in 2007 or 2008, the District Court correctly concluded such alleged injury was too speculative to survive summary judgment.

(Mike Frisch)