Firm’s missed deadline didn’t hurt client, jury rules

A law firm’s failure to meet a discovery deadline during its representation of an insurance company’s customer didn’t significantly affect the case’s settlement outcome, a South Carolina federal jury has ruled, in the first federal jury trial held in South Carolina since the COVID-19 pandemic began.

Sentry Insurance Co. hired the Maybank Law Firm of Charleston to defend a trucking company against a personal injury lawsuit, said attorneys David Overstreet and Steve Kropski of Earhart Overstreet in Charleston, who represented the law firm. The plaintiff, who suffered serious injuries from a collision with a tractor-trailer, asked the trucking company to admit fault, but the law firm didn’t respond to the requests before the deadline. The plaintiff then sent a $1 million demand, and Sentry ultimately settled the case for $900,000. 

Sentry then sued Maybank in federal court, alleging malpractice. That prompted a certified question to the South Carolina Supreme Court, which ruled in 2018 that insurers can file malpractice suits against the attorneys they hire to represent customers. Justice John Few, writing for the court, said that an insurer finds itself in a “unique position” when it hires an attorney to represent an insured person, which allows an insurer, in certain circumstances, to bring a direct malpractice action.

During the four-day trial, Sentry argued that it wouldn’t have settled the underlying case had Maybank not missed the deadline, Overstreet said. Maybank admitted to a breach of standard of care, but argued that the error didn’t cause Sentry any damages, because the requests for admissions didn’t ultimately impact the underlying settlement, as the value of the case exceeded the $900,000 settlement. 

After 90 minutes of deliberations on Sept. 18, the jury agreed that Maybank’s actions didn’t cause any damages to Sentry and returned a verdict for the law firm.

Overstreet said that jurors were separated by acrylic glass and wore masks for the entire trial. Attorneys also had had to wear masks unless they were speaking.

Daryl Hawkins of Columbia represented Sentry. He could not be reached for comment. 

Follow Bill Cresenzo on Twitter @bcresenzosclw

VERDICT REPORT — LEGAL MALPRACTICE

Amount: $0 (Defense verdict)

Injuries alleged: $900,000 in settlement costs

Case name: Sentry Select Insurance Company v. Maybank Law Firm LLC and Roy P. Maybank

Court: U.S. District Court for the District of South Carolina 

Case No.: 5:15-cv-04984 

Judge: J. Michelle Childs

Date of verdict: Sept. 18

Attorney for plaintiff: David Overstreet and Steve Kropski of Earhart Overstreet in Charleston

Attorney for defendant: Daryl Hawkins of Charleston