Brooklyn judge sanctions insurance company for failure to follow ethics rules

September 17, 2013 By Charisma L. Miller, Esq. Brooklyn Daily Eagle
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An employee of an insurance company embroiled in a personal injury lawsuit was sanctioned $10,000 for an attempt to make contact with plaintiffs without the plaintiff’s attorney.

New York’s Code of Professional Conduct prohibits contact with a party to a lawsuit when it is known that an attorney represents the party. The “no contact rule” mandates that all communication be directed exclusively to the party’s attorney.

In the case of Miller v. Lewis, an employee of ACE America Insurance Company (ACE) violated the “no contact rule” when claims director Miriam Mosseri entered into a conversation with the plaintiffs while their attorneys were in the judges’ chambers discussing settlement negotiations.

In December 2008, a Duane Reade truck struck Shirley Miller, leaving her brain damaged with very limited communication skills. Miller and her parents filed suit against driver Henry Lowis and, via the doctrine of vicarious liability, his employer, Duane Reade. The case was initially assigned to Brooklyn Supreme Court Justice Arthur Schack. Schack recused himself from the case after a “Wanted” poster was found in his courtroom displaying a picture of a member of the defense counsel team. The case was subsequently reassigned to Brooklyn Supreme Court Justice Leon Ruchelsman.

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During settlement negotiations, claims director Mosseri, who is fluent in Hebrew, the Millers’ native tongue, accompanied ACE, insurers for Duane Reade. According to court papers, Mosseri was brought in to “help humanize the defendants” and make the Millers feel more comfortable. At some point during settlement negotiations in April, Mosseri found herself alone in the courtroom with the Millers. Mosseri introduced herself in Hebrew and informed the Millers that she was not an interpreter.  

After pleasantries, the conversation quickly turned to the case. Mosseri asserted that ACE had “the best intentions to settle the case” and had already made a series of settlement offers.  The Millers contend that Mosseri gave a specific dollar amount for the settlement offer and told them that the Millers’ attorney had declined the offer because of an interest in obtaining as much publicity from the case as possible.

Upon notification of Mosseri’s contact with their clients, the Millers’ attorneys filed a motion for relief on the grounds of violation of the “no contact rule.” ACE claims that the “no contact rule” only applies to attorneys and not non-attorney contact with parties to a lawsuit. As such, ACE asserts, Mosseri’s communication with the Millers was neither improper nor unethical, since Mosseri is not a lawyer.

In assessing the merits of ACE’s argument, Ruchelsman advised that the “no contact rule” can, in certain circumstances, be extended beyond attorneys. For example, the “no contact rule” has been applied to sophisticated non-attorney insurance claims adjusters, Ruchelsman noted, citing case precedent.  Further, the American Bar Association has made it clear that insurance companies and their representatives are not allowed to “deal directly with any claimant represented by an attorney without the consent of the attorney.”

For Ruchelsman, ACE knew what it was doing when it asked Mosseri, an experienced claims adjuster who is fluent in the plaintiffs’ native language, to accompany during settlement negotiations. Mosseri’s presence in the courtroom “was not merely done to act in a courteous and friendly manner, but was done with a specific and definitive goal and purpose,” Ruchelsman noted in his written opinion. The conversation that ensued should have “been avoided,” Ruchelsman continued.  

In evaluating the conversation and the decision to have Mosseri present, Ruchelsman concluded that ACE, and not Mosseri, was directly responsible for the ethical violations. Mosseri stated in her affidavit that she was “specifically invited to attend the conference because of her fluency in Hebrew.”

Ruchelsman ordered Ace to pay $3,000 to the Millers’ attorneys and $7,000 to the Lawyers Fund for Client Protection.  Ruchelsman made it a point to note that Duane Reade’s defense counsel was not involved or implicated in ACE’s ethics violation.

“It’s unfortunate that ACE conducted themselves in that manner and that they would do anything to deprive this brain-damaged woman of justice,” said Evan Torgan of Torgan Cooper & Aaron, attorney for the Millers.

ACE did not immediately return a request for comment.

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