• Fourth District Court of Appeal
  • Broward Circuit Court
  • 4D12-3560
  • Mar 26 2014 (Date Decided)

ARCH SPECIALTY INSURANCE, APPELLANT, V. KUBICKI DRAPER, APPELLEE

Case No.: 4D12-3560

Date: March 26, 2014

Case type: Attorney malpractice

Court: Fourth District Court of Appeal

Author of opinion: Judge Cory J. Ciklin

Lawyer for petitioner: Carlos E. Mustelier Jr., Winget, Spadafora & Schwartzberg, Miami

Lawyers for respondent: Christopher J. Lynch and Steven K. Hunter, Hunter, Williams & Lynch, Miami

Panel: Judges Ciklin, W. Matthew Stevenson and Mark W. Klingensmith

Originating court: Broward Circuit Court

Arch Specialty Insurance Co. is a subsidiary of Arch Insurance Co. but using the wrong name as a plaintiff in a legal malpractice lawsuit almost got it barred from the Broward County courthouse.

Arch Specialty sued Kubicki Draper in 2008, claiming that due to the law firm's negligence in defending its insured, an accounting firm, Arch was forced to fund a settlement that was higher than it should have been.

The Florida-based litigation firm withdrew from the case before settlement.

Arch has been fighting ever since to recover the settlement money, more than $4 million, according to its appellate counsel, Carlos Mustelier Jr.

In 2012, well into the professional malpractice litigation in Broward Circuit Court, Kubicki moved for summary judgment, arguing the name on the settlement check wasn't plaintiff "Arch Specialty Insurance" but "Arch Insurance." Therefore, Arch Specialty lacked standing to pursue the action, the law firm asserted.

Arch Specialty tried to convince Judge John Murphy III that it should be allowed to amend its pleadings with the correct name. Instead, he ruled for Kubicki.

The Fourth District Court of Appeal reversed Murphy on March 26 and remanded the case for further proceedings.

"The pleadings and the trial are intended to 'arrive at the truth' rather than to engage in a game in which the 'technique of the maneuver captures the prize,' " Judge Cory Ciklin wrote, quoting from a 1956 Florida Supreme Court decision.

Mustelier of Winget, Spadafora & Schwartzberg in Miami said the ruling shows "the preference is getting to things on the merits as opposed to who's the cleverer lawyer."

Kubicki's appellate counsel from Hunter, Williams & Lynch in Miami did not respond to a message seeking comment by deadline.

Attorney Liability

Mustelier said there have been hints of a possible settlement in the Kubicki case, so it may never get to trial.

If it does, the deck isn't stacked in favor of either side, according to a law professor who studied hundreds of Florida lawyer liability cases.

"There are lots of cases where courts find against attorneys," said Robert Jarvis of Nova Southeastern University's Shepard Broad Law Center. Jarvis co-wrote a book on Florida legal malpractice that was published last year.

"It's really just a matter that the attorney did make a mistake rather than the attorney made a judgment call that didn't happen to work out. We don't punish with Monday-morning hindsight."

Jarvis, speaking generally and not about the Kubicki litigation, said, "What we punish lawyers for is making real mistakes, blowing a statute of limitations, not passing on a settlement proposal that would resolve the case."

The standard is what a reasonable attorney would do under the circumstances, he said. "That's where most malpractice claims go to die—you're unable to show that a reasonable attorney wouldn't do that."

Still he believes, "Our legal malpractice cases line up exactly as they should" with other states.

"Certainly we should have robust legal malpractice case law so that injured plaintiffs have redress when their lawyers make mistakes that cost them money."

Settlement Error

In 2000 the Fourth District issued a much-cited attorney malpractice decision about a rejected settlement proposal. In Sauer v. Flanagan and Maniotis, the court reversed a summary judgment for a law firm.

Susan Sauer was permanently disabled after falling in a store where she worked.

She said her attorneys talked her out of accepting a $1 million settlement offer by assuring her she'd get much more from a jury.

Her attorneys said they gave her the best advice they could at the time and she decided to reject the offer. At trial she not only lost, she had to pay the other side's attorney fees and costs.

The Fourth District concluded a trial would be necessary to determine whether the attorneys were liable for the bad call.

"The importance of settlement to clients and to society mandates that we recognize that an attorney has a duty to utilize ordinary skill and knowledge in advising the client," Judge Barry Stone wrote for the panel.

In the Kubicki case, it's unclear how the settlement in the underlying accounting malpractice action came about. Also unclear is how the firm's pre-settlement withdrawal affected the numbers.

The Fourth District didn't address those allegations but showed how Kubicki's apparent strategy in its own malpractice case could have knocked the ground out from under Arch's feet.

The relation-back doctrine holds that when a party is found to be mislabeled, the corrected cause of action relates back to the original filing. When the named party turns out to be the wrong party, however, a whole new lawsuit has to be filed.

In 2012, if Kubicki had succeeded with its argument that Arch Specialty and Arch Insurance are separate entities, the insurer wouldn't have been able to refile because the statute of limitations had run years earlier.

Coincidence?

Kubicki knew all about its former client Arch Specialty, "yet it lulled Arch into believing that the correct plaintiff had been named in the complaint by undertaking discovery … and waited until after the statute of limitations expired to make this challenge," Mustelier wrote in his reply brief.

The Fourth District said the trial judge should have just let the company amend its pleadings. Clearly Arch Specialty and Arch Insurance shared enough—common directors, the same New York City address, etc.—to fit the "identity of interest" exception to the relation-back doctrine.

Mustelier said the court was sensitive to the fact that a ruling for Kubicki would essentially have been a ruling on the merits. "We couldn't ever bring this claim."