The insured attorney received a claim, but failed to report it to his insurer.  Claiming that delivery of his professional liability policy to his insurance broker, and not to him, prevented him from understanding the significance of the "claims made and reported" language under his policy, the attorney sought indemnity for a judgment against him two years after the claim was first made. Delivery to the broker and knowledge of the policy terms was imputed to the lawyer, however, and dismissal of the action for failure to state a claim was affirmed by the First Circuit, under Massachusetts law.  Gargano, et al. v. Liberty International Underwriters, Inc., et al., C.A.1, 08-2287, July 14, 2009.

A lawyer’s demand to settle ongoing litigation for $5,000, or his adversary’s client would risk the consequences of various reports to state agencies about the underlying facts that sparked the controversy, left in a voice mail, did not amount to extortion and could not support termination of a distribution contract for harming the supplier.  Waldron v. George Weston Bakeries, C.A. 1, 08-2554, June 19, 2009.

A district court sanction for vexatious conduct on an attorney’s part, based not on Rule 11 but on 28 USC §1927 (“any attorney … who so multiplies the proceedings in any case unreasonably and vexatiously” may be required “personally” to pay excess costs, expenses, and attorneys’ fees)  was upheld by the First Circuit.  Before charging an adversary’s counsel with actions that were “corrupting the process”, the lawyer failed to conduct an investigation or establish a reasonable basis for his charges.  The sanctions are only appropriate for behavior that is more than mere negligence, inadvertence, or incompetence, but a finding of subjective bad faith is not required.  Northwest Bypass Group, etal. V. U.S. Army Corps of Engineers, et al., C.A.1, 08-2116, June 16, 2009.