WATERLOO, Iowa (CN) - An insurance company asked a federal judge to rescind its contract with an Iowa law firm after the suicide of one of its lawyers left dozens of potential malpractice claims in its wake.
David Roth, an attorney for defendant Gallagher, Langlas and Gallagher, hung himself in September 2014 because of depression, according to Iowa press reports. His Sept. 23 suicide came just a week before the firm's insurance with plaintiff Minnesota Lawyers Mutual Insurance Co. was set to expire, according to the Feb. 13 complaint.
A year before his death, Roth claimed he knew of no malpractice claims against the firm, nor any incidents that might result in claims, when he renewed the firm's insurance policy, the insurer says. He also said that none of the lawyers at GLG were engaged in business other than law, though he had been "providing financial planning and investment services for some years," according to the complaint.
Minnesota Lawyers Mutual asks the court to allow it to rescind its policy - which would have covered up to $5 million in malpractice claims - because it claims Roth lied on the renewal application.
The complaint details 29 incidents tied to Roth that the insurer says could evolve into legal malpractice claims. The insurer also claims that Roth had "maintained a secret bank account" in the firm's name since 2006, which he used to receive client funds and convert them to his own use.
According to the complaint, these deposits ranged from $5,000 to $1.2 million, and mostly came from his clients' personal injury and workers' compensation settlements, insurance payouts and refundable retainers. He even forged clients' names so he could deposit their insurance checks into his account, the complaint states.
Claims against Roth totaled $1.5 million as of Nov. 13, 2014, according to KWWL-TV, the Waterloo NBC station. His estate, which includes a vacation home, is valued at $700,000, according to KWWL, which said the FBI is investigating the case.
Minnesota Lawyers Mutual claims it offered GLG mutual rescission of the policy, which the firm declined.
The insurer wants to refund the firm's $38,000 premium in full "to return the contracting parties to the status quo before the policy was issued."
It is represented by Kevin Driscoll, with Finley, Alt, Smith, Scharnberg, Craig, Hilmes & Gaffney, of Des Moines.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.