O’Donnell, Ferebee, Medley & Frazer of Houston wants to select the lawyer who will defend the firm from some malpractice counterclaims instead of using a defense attorney picked by its liability insurer.
In a petition filed April 3 in the 269th District Court in Harris County, O’Donnell Ferebee seeks a declaratory judgment that it has a conflict of interest with Travelers Casualty and Surety Co. of America that would prevent Travelers from selecting the defense counsel.
“Therefore, defendant has the duty to defend O’Donnell Ferebee and the law firm can choose the counsel to represent it and that defense will be paid for by defendant,” O’Donnell Ferefee alleges in O’Donnell, Ferebee, Medley & Frazer PC v. Travelers Casualty and Surety Co. of America.
John Schutza, the Travelers claim counsel handling the O’Donnell Ferebee claim, did not return a telephone message left at his office in Richardson or respond to an emailed request for comment.
O’Donnell Ferebee alleges in the petition that it filed a lawsuit in 2012 against former clients for attorney fees “owing from the trial of a case.” The defendants in that fee collection suit filed counterclaims alleging malpractice “under a variety of theories.”
In the underlying case, O’Donnell Ferebee filed a motion seeking a no-evidence summary judgment in response to the counterclaims.
O’Donnell Ferebee alleges that Travelers notified it by letter on Feb. 7 that it would provide the firm with a defense but reserved the right to limit coverage and stated there may be no coverage for “damages for civil or criminal fines; sanctions; liquidated damages; payroll or other taxes; penalties; the multiplied portion of any multiplied damages award; equitable or injunction relief; any return, withdrawal, restitution or reduction of professional fees, profits or other charges; or damages or types of relief deemed uninsurable under applicable law.”
“The letter then sought to control the defense of the claim by assigning the defense to a law firm chosen by defendant,” O’Donnell Ferebee alleges in the petition.
O’Donnell Ferebee alleges that a conflict of interest prevents Travelers from “conducting the defense” in the underlying litigation because it selected defense counsel and because the facts to be adjudicated in the underlying litigation are the same as the facts upon which the defendant will determine coverage.
O’Donnell Ferebee requests that the court declare that Travelers has a conflict of interest in the underlying case, and the firm can employ its own independent counsel for the counterclaim, and Travelers should pay reasonable attorney fees for the defense.
The firm also seeks up to $75,000 for costs and attorney fees for the declaratory judgment action.
John Venzke, who represents O’Donnell Ferebee in the declaratory judgment suit, said O’Donnell Ferebee would like to use the lawyer representing it in the underlying litigation to defend it from the malpractice counterclaims.
Venzke, of the Venzke Law Firm of Houston, said O’Donnell Ferebee filed the declaratory judgment action to get attention from Travelers.
“We are trying to force the issue and to get the lawyer we’ve got,” Venzke said.