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State settles with legal malpractice insurer

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A legal malpractice insurance carrier has agreed to pay $16.5 million to Indiana's insurance department, settling a federal lawsuit that had come on the heels of a state malpractice claim where an Indianapolis law firm got hit with an $18 million verdict.

Indianapolis attorney Joe Chapelle with Barnes & Thornburg, who represented ProNational Insurance, said the settlement involves paying $16.5 million in response to the 4-month-old bad faith and breach of contract suit filed in the Southern District of Indiana. Payment instructions haven't been finalized, Chapelle said.

"It's important that there was no finding by the department of bad faith," he said. "We are pleased with the outcome and the company is pleased to be able to put this behind them."

Cohen & Malad attorney Irwin Levin, who represented the Indiana Department of Insurance, acknowledged a settlement had been reached but declined to comment before his client had an opportunity to respond. State agencies are closed today in observance of Columbus Day. The proposed agreement came Oct. 10 in Jim Atterholt v. ProNational Insurance Company, No. 1:08-cv-0834-DFH-WTL, which came against ProNational for declining multiple opportunities to settle a state court malpractice claim against attorney Frederick W. Dennerline III and firm Fillenwarth Dennerline Groth & Towe.

That claim involved Dennerline's involvement in a failed health plan that left 8,200 Hoosiers with unpaid medical bills. He had served as outside counsel for the health plan Indiana Construction Industry Trust that ultimately went defunct. Earlier this year, the law firm assigned its rights to the insurance commissioner and paid $50,000, releasing it from any obligation to pay the multi-million dollar verdict.

Check out tomorrow's Indiana Lawyer Daily for an update of this story.

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  1. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  2. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  3. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

  4. The fee increase would be livable except for the 11% increase in spending at the Disciplinary Commission. The Commission should be focused on true public harm rather than going on witch hunts against lawyers who dare to criticize judges.

  5. Marijuana is safer than alcohol. AT the time the 1937 Marijuana Tax Act was enacted all major pharmaceutical companies in the US sold marijuana products. 11 Presidents of the US have smoked marijuana. Smoking it does not increase the likelihood that you will get lung cancer. There are numerous reports of canabis oil killing many kinds of incurable cancer. (See Rick Simpson's Oil on the internet or facebook).

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