WASHINGTON – A federal judge has ruled in favor of an insurance company that sued the Baltimore law firm of Miles and Stockbridge for its handling of an asbestos case that the judge called a “monstrosity” of errors and a “Frankenstein.”
But in a bluntly worded opinion, U.S. District Judge Frederic N. Smalkin spread the blame far and wide for “the comedy (or, perhaps, tragedy) of errors that occurred” in the case, which stemmed from the 1994 mesothelioma death of a New Jersey man.
Smalkin said those errors “allowed a plaintiff — who at one time was prepared to accept a settlement of $125,000 — to collect $1.6 million,” even though her asbestos suit was barred by questions of timeliness, jurisdiction and a release she had signed with another insurance company.
“In the wake of this monstrosity, the parties footing the bill and successive sets of lawyers are slinging the barbs of blame at one another,” Smalkin wrote in the decision released Thursday.
The parties include Salomon Inc., which was sued by Corrine Jerome for the asbestos-related death of her husband, and Salomon’s insurer, Royal Insurance Company of America.
They also include Miles, which originally defended Royal and Salomon against Jerome’s claims, and the law firm of Parler and Wobber, which took over after Royal replaced Miles.
In an effort to recoup some of the settlement it ultimately paid to Jerome, Royal sued Miles, which in turn filed a complaint against Parler for its subsequent handling of the case.
Smalkin ruled that Miles bore primary responsibility for the negligence that led to the $1.6 million settlement, but cited judicial errors and ruled that Parler could also be held responsible to help pay some of the settlement.
Theodore Jerome, a lab technician with a New Jersey company that manufactured “friction products,” was diagnosed with mesothelioma in February 1994 and died four months later, according to his widow’s law firm.
The case began in 1997, when Corinne Jerome sued Salomon Inc. in New York Supreme Court and Baltimore City Circuit Court. The New York case was thrown out because the statute of limitations had expired, and Smalkin said the Baltimore case should have been thrown out for similar reasons.
But the case started to go wrong as soon as it arrived in Salomon’s mailroom in Baltimore. The suit was never forwarded to the legal department. Since it did not see the suit, Salomon did not respond, leading to a default order against the company in circuit court.
Salomon contacted Royal, who hired Miles’ Mauricio E. Barreiro. He got the default order set aside and unsuccessfully petitioned the case to federal court. Back in circuit court, another default motion was granted by Circuit Judge Edward J. Angeletti, who scheduled a trial on damages owed to Jerome.
Smalkin said Angeletti erred in that judgment, which “led to a series of misguided arguments by Miles in attempt to set aside the (erroneous) judgment.”
Court papers said Jerome was originally willing to settle for $125,000. In August 1998, she offered to settle the case for $450,000, but Royal declined. She again offered to settle, this time for $1.5 million, after Angeletti rejected another Miles’ motion to overturn the ruling.
In September 1998, Royal replaced Miles with Parler, which also had a series of motions rejected by the judge. In January 1999, Jerome’s settlement offer had jumped to $3 million, at which point Miles’ malpractice insurance carrier became involved in the case.
On Jan. 15, 1999, Parler asked the Court of Appeals to overturn the ruling. After that motion was rejected, the parties settled for $1.6 million.
Smalkin said that Miles bore primary responsibility for negligence in the case, regardless of mistakes committed later by Parler and Royal. But he also said that the case should not have been settled, as it would have been overturned eventually, and that Parler was negligent in advising Royal to agree to the settlement.
Representatives of Miles, Parler and Royal did not return calls for comment. Jerome’s lawyer was out of town.
Corinne Jerome is reportedly now living part of the year in Florida, and could not be reached for comment. This ruling should not affect Jerome’s settlement, lawyers said.