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Friday, June 20, 2008

Ind. Courts - State Insurance Commissioner sues Insurer in Dennerline matter

Following on the Court of Appeals May 16th opinion in the case of Frederick W. Dennerline, III and Fillenwarth, Dennerline, Groth & Towe v. Jim Atterholt, Insurance Commissioner of the State of Indiana as Liquidator of Indiana Construction Industry Trust (ICIT) [see ILB summary here], yesterday the Indiana Insurance Commissioner, as assignee of the firm, filed a bad faith claim in federal court arising out of the multi-million dollar jury verdict. The case is Atterholt v. ProNational Ins. Co.

Access the 8-page complaint of the Indiana Insurance Commissioner here.

For background, start with this Sept. 3, 2006 ILB entry, including this quote from a column by Indianapolis Star reporter John Ketzenberger:

Fillenwarth Dennerline was on the hook because everyone else involved in the collapse of the Indiana Construction Insurance Trust already had settled with the Indiana Department of Insurance.

When the state liquidated the trust, it collected $7 million to pay back the medical claims of 8,200 Hoosiers.

Frederick Dennerline III wanted the law firm's insurance company to settle for $1 million, too, according to a separate lawsuit. He was the attorney for the trust, which was a medical insurance collective of union contractors.

The insurance company refused to settle, the case went to trial and, last week, the law firm and ProNational Insurance Co. were hit with an $18 million judgment.

"Guys like me lose our jobs when we don't settle for $1 million, and then it turns into $18 million," said Jeffrey Goode. He's an attorney and vice president with XL Select Professional in Dallas, which writes malpractice insurance for attorneys.

ProNational rolled the dice when it decided not to settle for the policy's $1 million limit. The gamble left Fillenwarth Dennerline's fate in the hands of a six-person jury, which showed no mercy. It could have spread liability over 50 other people or entities. But the jury put the blame squarely on Dennerline. Snake eyes.

Posted by Marcia Oddi on June 20, 2008 02:22 PM
Posted to Ind Fed D.Ct. Decisions