A Philadelphia personal injury firm is suing its insurer for failing to provide coverage for a legal malpractice claim.
Zavodnick, Zavodnick & Lasky filed a complaint Tuesday against National Liability & Fire Insurance Co. in the U.S. District Court for the Eastern District of Pennsylvania.
The firm bought its lawyers’ professional liability policy from National in October 2016, the complaint said, and it included coverage for legal expenses resulting from a claim against the firm. Then, in July, Kenneth and Pamela Ayers sued the firm, as well as Todd Lasky, in the Philadelphia Court of Common Pleas.
That suit is ongoing. The Ayers alleged that Lasky had failed to relay critical information to them when negotiating a workers’ compensation settlement with Kenneth Ayers’ employer’s workers’ compensation insurer, Donegal Insurance Group.
The Ayers had believed that under the settlement, they would receive more than $150,000 free of any taxes or workers’ compensation lien, the Ayers complaint said, and Lasky informed them that Donegal had waived its right to a credit for future workers’ compensation benefits. But after agreeing to the settlement, the complaint said, the Ayers learned that Donegal had not agreed to a waiver, and did not expect to pay any additional benefits until the Ayers exhausted the settlement funds.
After the Ayers sued, the Zavodnick firm filed a claim with National requesting insurance coverage for the legal expenses arising from the Ayers case. But National replied by letter in August, denying the law firm’s claim. The complaint does not include National’s reasoning for denying coverage.
The Zavodnick firm is alleging damages of more than $75,000.
Michael Barrie of Benesch Friedlander Coplan Aronoff in Philadelphia is representing the Zavodnick firm. He said his client disagrees with National’s reason for denying coverage, which will come out in discovery.
Louis Kozloff of Goldberg Segalla, who represents National Liability & Fire, declined to comment on the complaint.