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Lawyers' catfight may cost Washington taxpayers $17.8 million

The fur is flying in Washington. Taxpayers will have to pay all of the largest personal injury award ever levied against the state because a rivalry between two state trial lawyers ended up with one of them ignoring — out of spite — a deadline to appeal the $17.8 million award.

The conflict came to a head after the state lost the verdict and Capps failed to forward legal documents to Lamb.

On May 11, 2001, Pierce County Superior Court Judge Karen Strombom ruled that the state — not a group of insurers with whom the state held numerous liability policies — must pay a record jury verdict because the state Attorney General's office missed the appeal deadline in the original lawsuit. That lawsuit was brought by three developmentally disabled men who were abused in a state-licensed family home. A Pierce County Superior Court jury ruled last year that the state was negligent in licensing the home.

Although the state was self-insured for $5 million, and held other insurance to pay the remaining $13.8 million, the insurers, including Zurich Specialties and Lloyd's of London, refused to pay. The insurers said the state breached its contracts by failing to appeal the original verdict. The insurers filed the lawsuit last November.

The state has not decided if it will appeal, says Gary Larson, a spokesperson with the state Attorney General's office. According to Larson, the three men have already been paid from the state's self-funded insurance and an account specifically set up to pay unexpected liability costs. The state was expecting reimbursement from its policies with the insurers. If the state doesn't appeal Strombom's decision, that fund will have to be "tapped more deeply," says Larson.

Washington Attorney General Christine Gregoire says it is "disappointing" that the insurers "sought to avoid their responsibilities to their customers — the citizens of the state of Washington."

However, the insurers proved in court that the state had responsibilities of its own.

"Mistakes were made in this case," says Larson, "but that's why you have insurance. It's supposed to protect you against unforeseen circumstances."

Turf battle sparks conflict

The conflict between former state trial lawyers Janet Capps and Lori Lamb developed when Lamb replaced Capps as lead attorney on the original case, according to an investigation ordered last year by Gregoire. The report revealed the conflict came to a head after the state lost the verdict and Capps failed to forward legal documents to Lamb and fellow attorneys, notifying them of the judgment hearing.

"Mistakes were made in this case," says Larson, "but that's why you have insurance."

As a consequence, when the judgment hearing was held on April 14, 2001 — signaling the start of the 30-day time limit to file an appeal — no state attorneys were present.

The Attorney General's office only learned of its embarrassing mistake when the plaintiffs' attorney sent a letter a month later, stating that the deadline had passed and inquired about the men's settlements.

The investigation revealed Capps not only withheld information from members of her own legal team and failed to appear in court, but also, during the trial, Lamb exploded in temper tantrums in open court.

The "internal dynamics of that trial team" have led to significant changes in the tort division of the Attorney General's office, says Larson, such as a "more sophisticated case management tracking system" that documents court-imposed dates and deadlines.

Both Capps and Lamb have resigned their positions. Capps has filed a $5 million defamation lawsuit against the state.

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