Facts

Onebeacon Insurance Co. sued T. Wade Welch & Associates, Ross Wooten, T. Wade Welch, Joseph Boyle, Chad Hagan, and David Noll, concerning a dispute over insurance coverage. DISH intervened in the action, and filed a counter-claim against Onebeacon.

PLAINTIFF'S CONTENTIONS:
Plaintiff alleged that Welch was a lawyer and sole owner of the Welch law firm, located in Texas. Plaintiff alleged that Wooten was also a lawyer and formerly employed by the law firm. Meanwhile, DISH sued Welch for malpractice allegedly committed by Wooten while Wooten represented DISH in an underlying case in Connecticut. DISH ultimately obtained a judgment in its favor, and against the firm for Wooten's malpractice for about $13 million.

Plaintiff alleged that it provided insurance coverage to the firm under a policy. Welch and the firm then submitted a claim under the policy for the Dish malpractice claim. However, plaintiff denied coverage for the claim. As such, it rejected the claim, prompting defendants to sue. Plaintiff alleged that the policy was void from the beginning because defendants made certain misrepresentations on the insurance application. As such, plaintiff alleged it owed no obligation to defendants to defend or settle the DISH malpractice claim. Consequently, plaintiff filed an action seeking a finding that the policy was rescinded and void and a claim seeking a finding that the prior knowledge exclusion in the policy precluded insurance coverage for the DISH malpractice claim.

DEFENDANTS' CONTENTIONS:
Defendants alleged that the DISH malpractice claim was a valid claim that plaintiff should have covered under its policy. Defendants then sued plaintiff, asserting claims for breach of the policy, unfair insurance practices in violation of Texas insurance laws, and a claim for failing to settle the DISH malpractice claim for the policy limits.

INTERVENOR'S

Result

The jury rendered a verdict in favor of defendants, and awarded defendants $3 million in damages for past lost profits, $5 million for future lost profits, $5 million in exemplary damages, and $7.5 million in actual damages.

Other Information

FILING DATE: Aug. 22, 2011.