Kansas City law firm battles insurers over two large settlements

Daily Record and the Kansas City Daily News-Press, Mar 12, 2009 by Scott Lauck

The jury's or judge's verdict is rarely the end of the story, as a pair of lawsuits recently filed by Davis, Ketchmark & McCreight show.

In one lawsuit, filed Feb. 17, the Kansas City plaintiffs' firm sued The Bar Plan Mutual Insurance, seeking to recover a $4.5 million judge's verdict entered earlier this year over legal malpractice claims against another Kansas City firm.

In separate suit, filed a day later, Davis, Ketchmark & McCreight sued Great American Insurance Co., of New York, in a dispute over who should pay a mediator for his work on a recent $5 million settlement. The lawsuit was voluntarily dismissed last week.

The first lawsuit stems from a civil action filed in 2002 by John Shiddell after he suffered paralyzing injuries in a car accident. Cameron Mutual Insurance Co. insured the defendant, Airborne Express.

According to the lawsuit filed last month, the Kansas City firm Dysart Taylor Lay Cotter & McMonigle was hired to determine whether the insurance company was obliged to defend and indemnify Airborne. Dysart Taylor determined there was no coverage. The firm then filed a lawsuit on behalf Cameron Mutual Insurance against Shiddell, claiming he had committed fraud.

According to the recent Davis Ketchmark suit, the purpose of the suit against Shiddell was to force his insurance carrier to pay the policy limits toward settlement of the underlying car accident case. Shiddell's insurance carrier wouldn't agree to mediate, and Dysart Taylor dismissed the case in 2004.

Shiddell then sued for malicious prosecution. Cameron Mutual eventually agreed to settle with Shiddell, leaving Dysart Taylor as the sole remaining defendant. On Jan. 16 this year, Jackson County Circuit Judge Robert Schieber approved a settlement of $4.5 million plus 9 percent interest, finding that Dysart Taylor was "motivated by legal malice."

"In other words, Dysart Taylor initiated and continued civil proceedings against the plaintiffs primarily for a purpose other than that of securing the proper adjudication of the claims on which they were based," Schieber wrote.

Thirty days after the judgment, Davis Ketchmark sued to collect the money from The Bar Plan, a legal malpractice carrier in Missouri. Dysart Taylor had insurance through The Bar Plan, which initially agreed to provide representation under a reservation of rights. According to the lawsuit, Dysart Taylor demanded that the reservation be removed. When The Bar Plan refused, Dysart Taylor resumed its own defense and eventually agreed to settle the case.

The lawsuit claims The Bar Plan is still liable for "all or a portion" of the judgment. The case is pending before Judge David Byrn.

A message left with Stephen Bahr, Dysart Taylor's managing director, was not returned.

Steven Couch, vice president of The Bar Plan's claims department, declined to comment on the ongoing litigation.

Meanwhile, Davis, Ketchmark & McCreight's lawsuit against Great American Insurance was the final twist in the unusual history of Helen and Christopher Teuber's January 2008 jury verdict. The Teubers were the wife and son of John Teuber, who died in an August 2005 crash with a Vance Brothers company dump truck. A Jackson County jury awarded the Teubers $12 million, but a judge later reduced the amount to $5.5 million.

The verdict was appealed and argued before the Missouri Court of Appeals Western District on Dec. 9. The two sides had already begun mediating the issue, using the services of Richard Ralston, a retired federal judge for the Western District of Missouri, who is now with Armstrong Teasdale.

Vance Brothers, through Great American, was represented by John Roche, of Snell & Wilmer's Denver office. According to a letter attached as an exhibit in Davis Ketchmark's lawsuit, Roche sent Ralston three briefs from the appeal to provide him "with a complete understanding of the nature and specifics of the parties' disputes."

"Because this appeal raises interesting questions of law and because plaintiffs' counsel (Michael Ketchmark and Scott McCreight) and I have litigated the post-trial matters in the trial court and this appeal with mutual respect and courtesy, I believe you will enjoy your service as a mediator in the parties' efforts to reach an amicable resolution of the case," Roche wrote in the Dec. 1 letter.

According to the lawsuit, Ralston decided it would be easier to attend the oral arguments than to read the three briefs. As a result of the mediated settlement talks, the parties settled the case for $5 million, according to court records. (In their brief to the Court of Appeals, Vance Brothers and Great American claimed the case was worth "$1.5 million but no more than $2.5 million.") The appeal was dismissed in early January, and the trial court accepted the $5 million settlement on Feb. 4.

In a Feb. 10 e-mail attached as exhibit, Jim Siessel, divisional vice president for Great American's excess liability claims division, advised Ralston that it would not pay him for his time spent watching the Court of Appeals arguments, saying the company hadn't requested that he review the material or attend the arguments.