Experience Richard D. Porotsky, Jr.

Experience

Successful Dismissal of Malpractice Coverage Claims in Fraud and Negligence Case

On behalf of a professional malpractice insurer, we obtained a dismissal of key claims by tort claimants who were seeking professional malpractice coverage from the insurer of a doctor who was found liable for a series of unnecessary surgeries. The jury found both negligence by the doctor and fraudulent misrepresentations about the need for surgeries. Claimants alleged that they were entitled to coverage under Ohio law, noting that the tort verdicts included a negligence component as well as a fraud component. However, by submitting trial transcripts from the tort trials, the jury verdict, jury interrogatories, and pertinent case law involving damages arising from multiple causes, we obtained a dismissal on the merits under Civil Rule 12. The Court agreed with our arguments that negligence damages were not independent of the fraud, and instead were in consequence of the fraud. The Court dismissed the claims for coverage.

Multi-party Insurance Dispute About Additional Insured Coverage and Indemnity Obligations Related to Construction Lawsuit

Client: An Insurer

At the request of our insurer client, we successfully analyzed the allegations of a multi-party construction-related lawsuit and the tender of defense between parties for purposes of determining coverage and defense obligations. The underlying lawsuit involved construction of a natural gas pipeline for the energy industry. The suit presented allegations of breach of contract, negligence, blasting liability, trespass, emotional distress, and fraud. The insurance issues involved additional insured coverage, property damage coverage, contractual indemnity rights, and anti-indemnity statutes. After presenting our opinion, we assisted the insurer client in obtaining payment from the insurer of another party based upon the indemnity and insurance rights between the parties.

Successful suit by minority shareholder against majority owners of family business enterprise

Client: A Minority Shareholder

To assist our client, a minority shareholder who was being denied her share of the profits in a lucrative family business, we filed suit against the majority owners alleging breach of fiduciary duty. After filing suit and obtaining access to certain business and financial records, we employed forensic accountants and valuation experts to calculate the value of the client’s losses and ownership share. As discovery demonstrated the unfairness of the majority’s actions, we obtained a successful settlement of the lawsuit for our client through mediation efforts.

CAE, Inc., et al. v. Three Cities Research, Inc., et al., District of Oregon

I played a lead role in obtaining dismissal in 2009-2010 of a $97 million claim brought against a private equity fund and pertinent directors and officers in Federal District Court in Oregon. The case, brought under civil RICO provisions, involved an international transaction with Canadian entities, and concerned alleged contingent consideration owed under a stock purchase agreement. The issues had been previously raised in Canadian proceedings and remain subject to international arbitration in Canada. I served as the lead attorney in extensive briefing on issues involving forum non conveniens, abstention, arbitration, and RICO, which led the Court to dismiss the case with prejudice.

Employee Policyholder v. Insurance Agent

I successfully represented an insurance agent who had been sued for misrepresentation in selling an employee benefit plan to a small business. The plan included disability and life insurance benefits. When an employee sought substantial benefits beyond those set forth in the policy, I filed and argued a motion to dismiss, invoking contract law and the ERISA statute, which required benefits to be described in writing, preempting common law misrepresentation claims. I thus obtained a dismissal of claims from state court due to exclusive federal jurisdiction over the alleged claims for benefits beyond those set forth in the written ERISA plan.

Executive Spouse v. ERISA Benefit Plan for Large Corporation

I successfully represented an ERISA plan and plan administrator in a suit where a participant's spouse, during the course of a divorce, sought a share of the participant's retirement benefits via a qualified domestic relations order (QDRO). The QDRO that she sought was contrary to the plan's terms and it was denied by the plan administrator. Unhappy with the plan administrator's actions, the spouse sued in federal court to force a particular apportionment of the retirement benefits. Invoking the discretion conferred upon administrators, and highlighting some related procedural shortcomings in the spouse's efforts, I was able to obtain a dismissal of the suit.

Group of Employees v. Employee Leasing Company

We successfully negotiated a dismissal of our client from a suit involving alleged failure to provide health insurance. Certain employees claimed that our client was liable as the successor to a prior company which had experienced problems in setting up a self-insured ERISA plan. The prior company had utilized a third party administrator (TPA) to procure excess insurance coverage and to handle medical claims, but the TPA failed to procure the insurance or pay the claims. After investigating the claims for coverage under the ERISA plan, and analyzing the issues of successor liability, we obtained a dismissal of our client from the litigation.

Insurance Coverage Opinion

I provided coverage opinions to a large insurance company on complex issues arising out of an alleged scheme by alcohol manufacturers to market and sell to underage consumers. The underlying plaintiffs sought to pursue a class action on behalf of the underage consumers and their parents, alleging intentional actions and certain negligent actions by the alcohol manufacturers. The manufacturers, in turn, sought insurance coverage. The coverage opinion addressed a number of issues, including the alleged marketing plans of these consumer products manufacturers and whether these could form the basis for a duty to defend or duty to indemnify under the insurance policies.

Local Manufacturer v. Supplier of Electronic Component Parts

I served as lead counsel in 2010-2011 for local manufacturer in a case involving alleged breach of contract and breach of warranty against out-of-state supplier of electronic component parts. The case involved detailed analysis of product defects, compilation of extensive out-of-pocket damages, and formulation of claim for lost profits. I successfully negotiated resolution via mediation and then obtained enforcement of settlement in court when post-settlement difficulties arose.

Materials Supplier v. Brewing Company (In receivership)

I successfully represented our client, a beer brewing company, in enforcing its right of first refusal with respect to trademark rights in certain local beer brands. A receiver who took control of these trademarks from a defunct brewery sought to sell both the brewery and the trademarks to another entity, in violation of our client's rights. After objecting to the sale, I argued our client's position at a hearing in state court in Northern Ohio. The hearing involved the receiver, the bank, a competing buyer, and other creditors. After the argument, the client and I successfully negotiated a resolution whereby our client obtained the desired beer brands at a favorable price.

Official Committee of Unsecured Creditors of Genesis Worldwide, Inc., et al. v. Three Cities Research, Inc., et al.

I played a lead role in successfully assisted our clients, two private equity funds and their investment advisors, in resisting a $62 million claim made against them. The case centered around the sale of the stock of Precision Industrial Corporation, a company which manufactured and serviced steel coil processing machinery. After the sale, and amid an industry downturn, the buyer defaulted on its loans and filed for bankruptcy. The buyer then claimed that it had substantially overpaid for the stock of Precision and that our clients had unfairly benefited as part of an alleged leveraged buyout. Filing an adversary proceeding in Bankruptcy Court, the Plaintiffs sought to recover most or all of the original sale price. They blamed the selling stockholders and their advisors for subsequent industry problems and technical issues which surfaced after the stock purchase. When settlement negotiations proved unsuccessful, I argued and prevailed in discovery motions in Court. I then lead the effort to obtain detailed accounting, engineering, and business data which ultimately vindicated our clients in demonstrating that the deal had been fair and reasonable. I worked with expert witnesses, including forensic accountants and business valuation experts, to gather and analyze the pertinent data. I personally took numerous key depositions of the critical fact and expert witnesses. When we presented our case in Court on summary judgment, we convinced Plaintiffs to dismiss their fraud claim, and admit that as to remaining claims, it was "impossible to say Plaintiffs were likely to succeed at trial." The Bankruptcy Court then approved a nuisance value settlement in an amount less than the remaining cost of defense, less than one-half of one percent of the amount claimed in the Complaint.

Policyholder-Attorney v. Legal Malpractice Insurer, U.S. District Court

I served as lead, local trial counsel for insurer in successfully obtaining summary judgment in 2011 in a claim for coverage and bad faith involving underlying allegations of legal malpractice. In the only oral hearing in the case, I presented our position to the federal judge in a related-discovery motion that ultimately formed the basis for the summary judgment.

Regional Insurance Company v. Local Manufacturer

I obtained favorable rulings from the trial and appellate courts on the insurer's duty to defend certain underlying intellectual property claims. The underlying claims involved trade dress infringement, patent infringement, and unfair competition. The coverage issue arose because one of our client's insurance policies provided coverage for certain trade dress claims, among other types of advertising injury. I obtained summary judgment on the duty to defend, served as co-counsel in conducting a trial on damages issues, and then was the lead author of the brief that prevailed in the First District Court of Appeals.