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Law firm pays $50,000, ending $18M nightmare

January 1, 2008
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An Indianapolis law firm has paid $50,000 to the Indiana Department of Insurance in a deal that extricates it from an $18 million jury verdict stemming from the collapse of a health insurance trust.

The department released Fillenwarth Dennerline Groth & Towe from the massive judgment that a Marion County jury handed down against the law firm two years ago. In return, the firm transferred to the department the bad-faith claims it is pursuing against its malpractice insurer, Alabama-based ProNational Insurance Co.

That's where the real money is, said Doug Webber, chief legal counsel for the department.

"It is our view that the law firm had limited assets," and even those would be difficult to get at if the firm sought bankruptcy court protection, Webber said.

In addition, he said he believes the law firm's bad-faith claims are strong. Fillenwarth Dennerline was hit with the judgment only after the insurer refused the department's offer to settle for a mere $1 million - the maximum amount of the firm's insurance coverage.

The legal tangle stems from the 2002 collapse of the Indiana Construction Industry Trust, which provided health coverage to non-union construction workers. The jury found that Fillenwarth Dennerline partner Frederick Dennerline III, who served as outside counsel for the trust, failed to notify trustees of its growing financial problems. The verdict equaled the amount of unpaid claims due 8,200 Hoosiers after the trust went bust.

Those insurance customers have collected nearly $4 million from other parties that previously settled. Any additional sums the department collects on the bad-faith claims would go to those customers, after attorneys' fees are paid. As a result of the agreement with Fillenwarth Dennerline, "We have a much better chance to recover the amounts necessary to make these 8,200 people whole," Webber said.

Joseph Chapelle, an attorney for ProNational, could not be reached. The insurer previously has denied acting improperly.
Check out the July 9 - July 22, 2008, edition of Indiana Lawyer or the Indiana Lawyer Web site Wednesday for more information about this suit.
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  1. Oh yes, lifetime tenure. The Founders gave that to the federal judges .... at that time no federal district courts existed .... so we are talking the Supreme Court justices only in context ....so that they could rule against traditional marriage and for the other pet projects of the sixties generation. Right. Hmmmm, but I must admit, there is something from that time frame that seems to recommend itself in this context ..... on yes, from a document the Founders penned in 1776: " He has refused his Assent to Laws, the most wholesome and necessary for the public good."

  2. Payday loans take advantage of people in many ways. It's great to hear that the courts are using some of their sins to pay money back to the community. Hopefully this will help change the culture of many loan companies, and make lending a much safer endeavor for those in need. http://lawsuitlendingnow.com/lawsuit-loans-post-settlement.html

  3. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  4. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

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