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. I commend Joe for standing up to this tyrant attorney! You ask why? Well I’m one of David Steele victims. I was in desperate need of legal help to protect my child, David saw an opportunity, and he demanded I pay him $3000. Cash. As I received motions and orders from court he did nothing! After weeks of emails asking him to address the legal issues, he responded by saying he was “on vacation “and I should be so lucky to have “my attorney” reply. Finally after lie on top of lie I asked for a full refund, which he refused. He then sent me “bills” for things he never did, such as, his appearance in the case and later claimed he withdrew. He never filed one document / motion for my case! When I finally demanded he refund my money he then turn to threats which scared my family for our lives. It seem unreal we couldn’t believe this guy. I am now over $100,000 in debt digging out of the legal mess he caused my family. Later I was finally able to hire another law office. I met Joe and we worked diligently on my case. I soon learn Joe had a passion for helping people. As anyone who has been through a legal battle it is exhausting. Joe was always more than happy to help or address an issue. Joe was knowledgeable about all my concerns at the same time he was able to reduce the stress and anxieties of my case. He would stay late and come in early, he always went the extra mile to help in any way he could. I can only imagine what Joe and his family has been through, my prayers go out to him and all the victims.

  2. Steele did more than what is listed too. He purposely sought out to ruin me, calling potential employers and then lied about me alleging all kinds of things including kidnapping. None of his allegations were true. If you are in need of an ethical and very knowledgeable family law paralegal, perhaps someone could post their contact information. Ethics cannot be purchased, either your paralegal has them or they do not.

  3. This is ridiculous. Most JDs not practicing law don't know squat to justify calling themselves a lawyer. Maybe they should try visiting the inside of a courtroom before they go around calling themselves lawyers. This kind of promotional BS just increases the volume of people with JDs that are underqualified thereby dragging all the rest of us down likewise.

  4. I think it is safe to say that those Hoosier's with the most confidence in the Indiana judicial system are those Hoosier's who have never had the displeasure of dealing with the Hoosier court system.

  5. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise