Insurance Company Sues Lawyers For Billing Fraud

Vermont Mut. Ins. Co. v. McCABE & MACK, LLP, 2013 NY Slip Op 2392 – NY: Appellate Div., 2nd Dept. 2013 – Google Scholar.

This case was filed by an insurance company against lawyers who were assigned by the insurance company to handle a subrogation action. The complaint asserted two legal theories; legal malpractice and fraud.

The trial court dismissed the fraud claim. The Appellate Division reversed. It held that the insurance company had properly alleged fraud when it claimed the lawyers (a) billed it for filing a motion for default judgment; (b) received payment for the work when (c) the lawyer never actually filed the motion for default judgment.

Comment: this is a complaint which contains allegations that have not been proven. Billing fraud cases are rare. By citing this decision of the New York Appellate Division, I am not in any way commenting on the merits of the allegations in the complaint.

Edward X. Clinton, Jr.