Two St. Louis lawyers who won an uncollected $11 million judgment will face legal malpractice proceedings now that an appellate court reversed a lower trial court dismissal.
“I’m surprised the appellate court reversed but there's not always consistency between appellate opinions and panels can come out differently,” said Laurence Mass, a legal malpractice attorney in Clayton, Missouri.
Attorneys Matthew O’Grady and James O’Leary were sued for alleged negligence by their former client Daniel McCullen who lost his foot in a motorcycle accident and did not receive the $11 million judgment that a St. Louis County circuit judge had previously entered, according to media reports.
“They could have pursued the insurance company more with a garnishment under Missouri statute 537.065,” Mass told the St. Louis Record. “They could have done that in greater pursuit.”
Section 537.065 allows any person with an unliquidated claim for damages from bodily injuries, or death to contract with a defendant or insurer on his or her behalf or both if the insurer has refused to withdraw a reservation of rights or declined coverage.
“It seems to me that even though they got a judgment, it didn't mean they were going to get coverage under the insurance policy,” Mass said in an interview. “The insurance company was going to defend that there was no coverage and if the insured didn't tell them for two years, for example, they could have defended on a reservation of rights saying they didn't get the cooperation of the insured and therefore they were prejudiced and there's no coverage.”
McCullen sued the ProCycle motorcycle dealership in the underlying lawsuit, which sold him the Honda motorcycle he was riding. McCullen was eventually awarded $11,031,096 by St. Louis County circuit court judge Michael Burton however St. Louis City circuit court judge David Dowd subsequently ruled in favor of ProCycle’s insurer Federated.
The Columbia Daily Tribune reported that Jo and Allen Shernaman co-owned the ProCycle motorcycle dealership at the time. It has since been acquired at auction for $1.22 million by the Boone County National Bank.
“Here, it is clear that Federated was not provided timely notice and was prejudiced by the late notice of the McCullen lawsuit,” Dowd wrote in the 2016 ruling.
As previously reported in Missouri Lawyers Media, when McCullen sued his previous attorneys for legal malpractice, the complaint was dismissed because the statute of limitations had expired.
But Missouri Court of Appeals Eastern District judges Robert M. Clayton III, Angela T. Quigless, and Sherri B. Sullivan unanimously reversed the decision last month.
“When this ruling was entered, and despite Defendants’ assertions to the contrary, all potential avenues of recovery of the approximate $11 million judgment had effectively closed in that Plaintiff could not recover from Federated because of the grant of summary judgment in its favor, Plaintiff could not recover from the Shernaman defendants personally pursuant to the terms of the 2014 settlement agreement, and Plaintiff could not recover from Honda because it was dismissed as a party in 2011,” Clayton wrote in the opinion.