Sunday, January 06, 2008

Nebraska Supreme Court reverses Douglas County District Court summary judgment that was in favor of plaintiffs whose attorney had forged their signatures on settlement documents, forged their settlement checks and stole their funds against their attorney's malpractice insurer. The Supreme Court holds the fraud and misappropriation exclusion clauses in the attorney's malpractice insurance policy voided coverage. On remand the Nebraska Supreme Court directs the District Court to give summary judgment to Coregis, the former attorney's malpractice insurer. Fokken v. Steichen, S-06-614, S-06-615, 274 Neb. 743. Coregis should have received summary judgment for the plaintiffs' claims that the attorney misappropriated their settlement funds by converting the funds for the attorney's use. When the District Court determined the attorney fraudulently settled the cases, the malpractice insurer wins summary judgment for the balance of the plaintiffs' malpractice claims that the attorney settled their cases for less than their true value.Steichen’s unauthorized endorsement of Miller’s and Fokken’s names constituted a dishonest act. Because the district court in both Fokken’s and Miller’s cases adjudicated Steichen of committing those dishonest acts, coverage is precluded under exclusion A (dishonesty) of the Policy for the balance of the appellees’ judgments against Steichen."

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