Joseph Oliva, Author at Professional Liability Matters

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October 28, 2019 General

Duty to Defend Wire Fraud

In Quality Sausage Company, LLC, et al v. Twin City Fire Ins. Co., Civil Action No. 17cv111 (S.D. Texas, Sept. 18, 2019), one of the plaintiff corporations (Plaintiff) fell victim to a fraudster who submitted fraudulent wiring instructions via email to Plaintiff on behalf of one of Plaintiff’s clients. Per those wire instructions, Plaintiff improperly transferred $1 million from the client’s account to the account of a sham company. Uh oh.

The client sent a letter to Plaintiff and demanded compensation as this loss occurred …

June 17, 2019 Insurance Products

Bond…Terminated Bond.

A New York court recently held that the termination condition in a fidelity bond applied to terminate coverage in respect of losses allegedly caused to an insured insurance company by the insured’s managing general agent. The Court found that termination was appropriate because the insured knew of the managing agent’s dishonest acts prior to applying for the bond.

In Starr Insurance Holdings, Inc. v. United States Specialty Insurance Company, Index No. 652164/2016 (N.Y. Supr. Ct. 2019), Plaintiff started insuring Warranty contract. Starr utilized Global …

October 29, 2018 Coverage

Crime Policy Coverage: Direct Means Direct

In a recent decision, a Federal District Court grappled with the definition of “direct loss” under a commercial crime policy. The court in CP Food & Beverage, Inc. v. U.S. Fire Ins. Co., concluded that “direct means direct” and an insured’s losses from payment card charge-backs when certain employees made fraudulent charges on customers’ payment cards were only the “indirect” result of employee theft, and therefore not covered under the insured’s policy.

The facts are interesting. The insured operated a club (the “Club”) where …

May 17, 2017 Miscellaneous Professionals

Debt Collectors Earn Win on FDCPA Claim for Stale Debt

Debt collectors recently won an important victory in the U.S. Supreme Court, which ruled that filing a stale claim in bankruptcy court does not run afoul of the Fair Debt Collection Practices Act (the “FDCPA”). Although the Opinion does not affect a debtor’s potential claim for sanctions under frivolous filing rules, it does remove at least one potential avenue for recovery.

In Midland Funding, LLC v. Johnson, Midland filed a claim in the debtor’s Chapter 13 bankruptcy case for unpaid credit card debt Midland …

July 7, 2016 Ethics / Legal Malpractice

Unethical ≠ Negligent

It’s not uncommon to see allegations of ethical breaches incorporated into malpractice claims. Former clients may argue that their attorney’s failure to comply with the rules of professional conduct evidences negligence. Often, however, that’s insufficient to sustain a claim. An ethical breach may be considered by the fact-finder but, without more, is unlikely to support a claim. Consider the recent decision from the New York State Appellate Division which continued a trend of dismissing legal malpractice claims based purely on ethical violations.

In Fletcher v …

March 30, 2016 Accountants

Auditor Securities Fraud: Negligence isn’t Enough

Unlike most malpractice scenarios, alleged negligence is not enough to sustain a claim in the context of securities fraud against an independent auditor. Rather, in most jurisdictions the plaintiff must establish that the audit was of such little value that it was a “pretend” audit which provided no benefit. Alleging that the auditor could have done more is insufficient absent properly pled allegations that the auditor maintained an evil intent or acted with reckless conduct. This standard is fairly well-developed. Yet, the exposure is often …

March 10, 2015 Employment Practices Liability

Decision Limits Defenses to FLSA Overtime Claims

You’ve heard it before, here and likely elsewhere, of the risks of FLSA overtime lawsuits. Yet, these suits continue to make headlines. Simply put, qualified employers must pay employees at least 1.5 times their regular wage for every hour worked in excess of 40 hours per week. This applies to certain professionals who, of course, employee non-exempts personnel. Whether it’s tax season, preparing for trial or meeting a tight deadline, professionals may ask employees to work beyond 40 hours and therefore may be subject to …

October 23, 2014 Experts

Experts are Like Produce: Buy Local

A key issue in most professional malpractice cases is whether the professional complied with the applicable standard of care. Given that this standard is defined by individual professional communities, an expert is almost always needed to assist the fact-finder. Not just any expert will do. Rather, an ideal expert must be in a position to opine whether the questionable conduct complied with the standard upheld in the defendant’s jurisdiction. This issue was recently raised in Delaware when an expert’s opinion was ignored because he lacked …

June 24, 2014 Privileges

The Litigation Privilege: Who, What, When and Where?

Anything you say can and will be used against you. Well, not always. Attorneys, litigants, and experts may be immune from liability arising from certain acts and statements made in connection with the pursuit of litigation in light of the litigation privilege. This privilege can provide an important and useful defense for professionals. But what is it and when may it be asserted? Read on to find out.

The litigation privilege, or the “judicial privilege,” is a deeply rooted doctrine established to allow attorneys, experts …