National Union Fire Ins. Co. of Pittsburgh, PA v. Wuerth, ___N.E.2d___, 2009 WL 2341993 (Ohio 2009)

Brief Summary
Under Ohio law, a law firm cannot be directly liable for malpractice and can only be vicariously liable if one or more of its attorneys is liable for malpractice.

Complete Summary
National Union Fire Insurance Company (“National Union”) retained law firm Lane Alton & Horst, L.L.C. (“Lane Alton”) to represent several of National Union insureds. Lane Alton assigned the case to Richard Wuerth. Wuerth had to be replaced midway through litigation due to a health issue. After Lane Alton lost the lawsuit, National Union sued both Wuerth and Lane Alton for legal malpractice. The district court dismissed Wuerth, but not Lane Alton, on statute of limitations grounds.

In light of Wuerth’s dismissal, however, the district court then dismissed the vicarious liability claim against Lane Alton. The district court further held that Lane Alton could not be directly liable for legal malpractice and therefore granted summary judgment to the defendants. On appeal, the Sixth Circuit certified two issues to the Ohio Supreme Court regarding the potential malpractice liability of law firms: whether a law firm may be directly liable for malpractice, and under what circumstances a law firm may be vicariously liable for malpractice.

The Ohio Supreme Court first held that under Ohio law, law firms cannot be held directly liable for malpractice. The court drew from precedent in the area of medical malpractice in determining that professional malpractice claims apply to individual professionals rather than entities. The court noted that only individuals are capable of being admitted to practice law in Ohio and thus only individuals can have direct liability for legal malpractice.

The court then held that under Ohio law, a law firm cannot be vicariously liable for malpractice “when no individual attorneys are liable or have been named.” 2009 WL 2341993 at * 5. The court adopted this holding based on principles of agency law.

Significance of Opinion
This opinion clarifies when and how a law firm may be liable for malpractice in Ohio. At least in Ohio: “A law firm may be vicariously liable for legal malpractice only when one or more of its principals or associates are liable for legal malpractice.” Id. at * 6. It remains to be seen whether, or to what extent, this case will cause plaintiffs’ legal malpractice lawyers in Ohio or other jurisdictions to seek to name all potentially involved lawyers as individual defendants in addition to naming their law firms.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.

Register Today for the 8th Annual Law Firm General Counsel Forum: Risk Management in Troubled Times

Presented by Hinshaw & Culbertson LLP, The Hildebrandt Institute and WestLegalEdCenter

Date: December 2-3, 2009

Location

Thomson Reuters
Thomson Hall, 4th Floor
195 Broadway
New York, NY

Who Should Attend?

• Law Firm General Counsel
• Chief Human Resources Directors
• Chief Compliance Officers
• Human Resources Professionals
• Risk Management Partners

Register

Space is limited so register early by contacting WestLegalEdCenter at 1-800-241-0214 or by clicking on the link below. Provide offer code 000000.
http://westlegaledcenter.com/program_guide/course_detail.jsf?courseId=19390351&sc_cid=ws_hild

Topics Include

• Managing opportunities and risks in the current economy
• The evolving role of the general counsel
• Risks of disagreeing litigation services
• Implications of abandoning the hourly fee
• Legal issues surrounding laterals

Fee and Discounts

$1,495 for Law Firm Registration

5,000 for Non-Law Firm and Non-Corporate Law Department Registration (Insurance Professionals: Mention Hinshaw to Receive Law Firm Rate of $1,495)

Receive a 10% discount off the registration fee for all participants if you send three or more people from the same organization to the Forum.

CLE Credit

States have widely varying regulations regarding MCLE credit. Please note that some jurisdictions do not accredit Law Practice Management programs. WestLegalEdCenter is an approved provider in AK, CA, GA, IL, ME, MO, ND, NV, NY, OK, SC, VT and WV. Credit may be applied for in additional jurisdictions upon request and in accordance with state MCLE rules.

REGISTER NOW for the Ninth Annual Legal Malpractice & Risk Management Conference and receive a 10% Early Bird Discount before December 1, 2009

Attend the industry's premier annual event focused on current and important developments in the law and litigation of malpractice claims, legal malpractice insurance and risk management strategies. Each conference panel examines recent case law and significant developments throughout the last year. One and one-half days will be devoted to legal malpractice (March 3-4), and one and one-half days will be devoted to risk management (March 4-5). The conference will be held in Chicago at The Westin Chicago River North Hotel.

Earn up to 15 hours of CLE credit, including up to 6.50 ethics credit!

Conference Topics

Legal Malpractice Sessions (March 3-4)

• Standing to Sue, Privity and Duty of Disclosure
• Litigation/Litigation Attorney
• What's Your Little Secret? They Want to Know
• Judgmental Immunity
• Insurance Coverage Update: The Year in Review – Prior Knowledge Redux and the Definition of Professional Services
• 2009 Updates and Statutory Causes of Action
• Stump the Panel

Legal Malpractice/Risk Management Cross-Over Sessions (March 4)

• The Insurance Marketplace and Considerations
• Who is the Client and Standing to Sue – Successor Entities, Affiliates and Subsidiaries
• Advance Conflict Waivers, Screening and How to Do It

Risk Management Sessions (March 4-5)

• The General Counsel Forum
• Suits for Fees/Mandatory Fee Arbitration
• Risk Management Considerations in Restructuring and Winding-Up Law Firms
• Managing Client and Law Firm Data, and What Gives When Client and Firm Policies Conflict?
• On the Horizon – The Slow Motion Revolution

Registration Fees

$1,300 for the Entire Conference - March 3-5
$925 for the Legal Malpractice Sessions Only - March 3-4
$925 for the Risk Management Sessions Only - March 4-5

Discounts (maximum 15% discount per registration)

Returning registrants receive 5% off the conference price
Multiple registrants receive 15% off when two or more colleagues from the same company register for the conference
Early birds receive 10% until December 1, 2009

For more information, please visit www.LMRM.com or click here to Register Now!

To speak with the Conference Planner, Katherine McCormack, please call 312-704-3329.