In a recent personal injury lawsuit involving a dog bite, the judge fined the lawyer $50,000. The lawyer represented the dog owner’s insurance company. He failed to have the appropriate authority to settle the case.

The lawyer came to the settlement meeting in Nevada court. His settlement authority was $600,000 on behalf of the insurance company. The plaintiff’s attorney came to the court initially seeking $75,000 in medical bills and $850,000 in punitive damages. During negotiations, the plaintiff’s attorney was willing to accept $750,000 in damages to settle the claim. Since the insurance company only provided the attorney with $600,000 settlement authority, he rejected the offer.

Injured Plaintiff

James Moberly, a landscaper, was the plaintiff in this action. In 2011, while working, a German shorthaired pointer attacked and bit him several times. The Mathis family owned the dog. After being bit, Moberly fell backwards and re-aggravated an existing spinal condition. Moberly’s attorney claimed the dog previously bit three other people. The landscaper sought damages from the Mathis family for his personal injuries. Additionally, he sought $850,000 in punitive damages because the family recklessly allowed the dog to repeatedly bite people.

Negotiating in Bad Faith

Because the insurance company did not send an attorney with sufficient settlement authority, the judge found the defendant in contempt of court. As part of the contempt sanction, the judge fined the company $50,000. The judge determined the attorney’s settlement authority was far from the damages the plaintiffs sought. As a result, the judge found that the defendant was negotiating in bad faith.

It is both unprofessional and unethical for a party to negotiate in bad faith.  The insurance company argued that it sent its attorney with a reasonable settlement authority.

According to Nevada court rules, a settlement representative should have “full settlement authority.” Full settlement authority means the attorney is able to settle for the full amount the plaintiff requests in the complaint. Because the judge found the lawyer in contempt for not settling, some felt the judge overstepped his authority. Parties are always able to refuse a settlement. On the other hand, some agreed with the judge for holding the attorney accountable.

While settlement interested the parties, it appears the case will now go to trial.

If you have questions about legal malpractice, contact us for guidance.