According to the complaint, this assertion was false because
LEB did not disclose on the Application that LEB and Lipscomb had knowledge of circumstances that would likely result in a professional liability claim or suit by Malibu Media.
Numerous emails were exchanged between Lipscomb and Pillar Law prior to May 10, 2016 that show that LEB and Lipscomb had knowledge of circumstances that could result in a professional liability claim or suit by Malibu Media.
Indeed, by no later than April 18, 2016 LEB and/or Lipscomb prepared documents that specifically acknowledged their awareness of Malibu Media’s threat to pursue legal action against LEB and/or Lipscomb.
And, as a result,
MIC relied on LEB’s misrepresentation in the Application in issuing the Policy.
The misrepresentation in the Application was material to the risk assumed by MIC and increased the risk of loss.
If these facts, as recited above, were known to MIC, it would not have issued the Policy and/or would not have offered coverage on the same terms and conditions and/or for the same premium.
I didn’t dedicate much time to reading the exhibits yet. However, a cursory look revealed at least two interesting pieces:
On p. 20 Lipscomb stated that
Revenue earned from Malibu Media accounted for approximately 60% of the Firm’s revenue.
This statement contradicts his 2015 interview for the Chicago Lawyer Magazine, in which he said:
“I’ve never been in this for money,” Lipscomb said, adding that Malibu Media only comprises one-third of his law practice. “I’ve been in this for the fact that I love what I do and I actually, passionately believe that what I’m doing is right.”
Words can’t describe how shocked I am by the very idea of Keith not being truthful.
Exhibit A (p. 35) presents an email from Angela Lipscomb to the insurer (emphasis and links are mine):
I am writing in response to your inquiry regarding the recent reduction in attorneys at our firm. Recently, one of our partners was elected to the Florida Board of Governors. She decided she needs a bigger platform to pursue her bar and political ambitions and is joining a larger law firm, Greenspoon Marder. One of our associates is transitioning to that firm and will work for her. Also, we stopped doing work for a large client, which work was focused on copyright litigation. That work stopped after a new investor became involved and began using a firm with which he has a connection. We had associates that spent 100% of their time doing work for that client, the firm had attempted to obtain litigation funding in order to take on contingency work which would have provided sufficient volume to continue to employ those associates. We learned on Monday afternoon that such funding was not available. Consequently, we had to lay off those associates. The firm intends to re-focus on more commercial litigation, trademark and patent cases and to re-build organically with more diverse portfolio.
I have an idea who that “new investor” is, but need another independent confirmation before saying anything about it.
After two stipulated delays to submit the case management statement, the plaintiff dismissed the case without prejudice (i.e. no settlement) on 11/22, and on 11/30 the judge ordered to close this case:
THIS CASE has been DISMISSED without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), with each party to bear their or its own attorney’s fees and costs.