Legal Malpractice/Error

A law firm with a primary area of practice in civil litigation, was retained to file a bad faith complaint against an insurance company on behalf of homeowners. According to the complaint, the insurance company had denied the homeowners’ water and mold damage claims. After the plaintiffs settled the bad faith claim for $190,000, they sued the insured for legal malpractice, alleging the bad faith claim filed by the law firm had not been filed in a timely manner and contained serious errors. The homeowners claimed they had been forced to settle the underlying bad faith case for less than full value because their case had been weakened. The initial demand was $635,000; however, the case against the insured was settled through mediation for $120,000. Defense costs were $100,000.

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