Insurance Defense Violations Draw Sanction

An attorney has been indefinitely suspended without leave to reapply for three years by the Missouri Supreme Court for misconduct in defending an insurance claim.

The matter

Petruska was admitted to practice law in Missouri in September 1995. His license is currently in good standing, and he has no previous disciplinary history. In December 2013, Petruska was hired as a chief trial attorney for Zurich Insurance Company, doing business as the Law Office of Craig A. Hansen. The law office would defend Zurich’s insureds who were sued for claims covered by their insurance policies. As a chief trial attorney, Petruska mostly handled large, catastrophic injury claims. Petruska worked with litigation specialists or adjusters in the Zurich claims department. Those claim professionals would normally control the final decision for settling a case.

In July 2018, Petruska was assigned a case to represent Zurich and its insured, an automobile dealership. An automobile dealership employee was involved in a serious automobile accident with a mother and her daughter. The injured parties (“plaintiffs”) sued the automobile dealership and the employee (“defendants”). The Zurich adjuster supervising the case was an individual with whom Petruska had previously worked, and Petruska found it difficult to work with this particular adjuster. Petruska and the adjuster would clash over the settlement value of cases.

Among the ethics violations

Rule 4-8.4(c) states an attorney commits professional misconduct by “engag[ing] in conduct involving dishonesty, fraud, deceit, or misrepresentation.” Petruska violated this rule in multiple respects. He falsely told plaintiffs’ counsel he had the authority to settle the lawsuit. He provided unauthorized settlement agreements to the plaintiffs. He then misrepresented to the circuit court, several times, that the case was settled. He falsely strung along plaintiffs’ counsel, repeatedly stating settlement funds were forthcoming and blaming Zurich for delays. This falsehood culminated in Petruska sending an empty envelope to plaintiffs’ counsel in an attempt to continue the farce. At the same time Petruska was dishonest with the plaintiffs concerning payment of the settlement, Petruska  continued to misrepresent the status of the case to Zurich’s adjuster. Petruska also, with the apparent assistance of plaintiffs’ counsel, misrepresented the true reason for a payment from Zurich. The payment was to cover the cost of a sanction entered against the former employee, but Petruska submitted an invoice describing the cost as “Expert Charge (reimbursement).” Finally, Petruska attempted to obtain the settlement funds from the automobile dealership by misrepresenting that “a unique timing circumstance” necessitated the dealership advancing settlement funds that would be reimbursed by Zurich. At that point, Zurich had no knowledge of any settlement.

(Mike Frisch)