UPS has filed a legal malpractice suit in federal court in Philadelphia against the law firm of Salmon, Ricchezza, Singer & Turchi, also naming three specific attorneys.
Salmon Ricchezza had handled UPS's defense against a personal injury lawsuit filed by an employee of Air Transport International Inc. (ATI) who worked at the UPS terminal in the Philadelphia airport. That suit ended up settling for $5.5 million plus attorney fees totaling more than $170,000 with a different law firm. UPS is seeking to recoup those costs as well as "punitive damages as a result of defendants' outrageous conduct," according to its complaint.
Lawyers at Salmon Ricchezza did not return phone messages seeking comment.
The matter stems from a cargo aircraft charter agreement signed by UPS and ATI that laid out the terms by which ATI would defend and indemnify UPS for lawsuits arising from ATI's services.
According to its complaint, UPS read the contract as clearly covering the underlying suit, which involved an experienced ATI mechanic who was injured when a truck he was in flipped over near the UPS terminal. The truck was a model not typically used for airline maintenance — it had a high center of gravity — and it had been poorly loaded with metal nitrogen and oxygen tanks, in violation of Occupational Safety and Health Administration regulations. The profile of the truck combined with a gust from an approaching UPS 747 caused it to flip over, leading to the worker's injuries.
After the worker, Gary DeVaco, filed his suit in December 2009, UPS tendered its right to defense from ATI, under the terms of the cargo aircraft charter agreement, according to the complaint. After about six months of communications between Salmon Ricchezza and ATI weighing whether or not ATI would actually be obligated to cover UPS's defense, Salmon Ricchezza accepted UPS's tender on behalf of ATI unconditionally, according to the complaint.
ATI's lead insurer was Chartis Aerospace Insurance Group.
For 15 months, Salmon Ricchezza handled UPS's defense.
Referring to one communication from the firm during the six-month period that it advised ATI about taking up the defense, UPS said in its complaint, "in light of … the opinion that 'there would be no indemnity obligation if UPS's pilot was guilty of gross negligence,' the Salmon Firm handled UPS's defense and reported to ATI and/or Chartis in ways that improperly prejudiced UPS's interests and furthered the interests of ATI and/or Chartis."
Also during the period in which Salmon Ricchezza was handling UPS's defense, the firm exchanged letters and emails with ATI and Chartis, and also had phone calls and in-person meetings with them without alerting UPS, according to the complaint.
In a June 22, 2012, letter to Chartis, Salmon Ricchezza provided the insurer with an "update regarding the liability picture," according to the complaint. The letter said "most of the liability depositions have been conducted and the majority of the testimony has been extremely unfavorable," according to the complaint. It also included other information but didn't take into account factors that would have weighed in UPS's favor, according to the complaint.
Salmon Ricchezza also neglected to get any expert liability opinions on behalf of UPS, the company alleges.
That letter "painted a one-sided liability picture adverse to UPS by telling ATI's lead insurer, Chartis, that the evidence of record was 'extremely unfavorable' to UPS," the complaint alleged.
It "stated that it was their 'opinion that a jury would find UPS liable for Mr. DeVaco's accident' and ignored defenses plainly available to UPS. The letter concluded that 'at this point, it appears that UPS does not have any liability defense available,'" according to the complaint.
Salmon Ricchezza withdrew after Chartis told UPS in July 2012 that ATI wouldn't be obligated to indemnify UPS. The following month, the firm told UPS that Chartis would stop paying for its services and withdrew immediately after a court-ordered mandatory settlement conference.
The case has been assigned to U.S. District Judge Timothy J. Savage of the Eastern District of Pennsylvania.
Neither of the attorneys representing UPS — Christopher Merrick of Keenan Cohen & Howard in Jenkintown, Pa., and George Spellmire of Spellmire Law Firm in Chicago — could be reached for comment.