Opinion ID: 1171472
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: These appeals arise from judgments in an attorney malpractice case and a related indemnity claim. The jury returned a verdict setting damages suffered by plaintiff Phillip Bohna and assigning fault among: 1) Allstate Insurance Company (Allstate), 2) Hughes, Thorsness, Gantz, Powell & Brundin (HT), and 3) Bohna himself. The superior court entered two judgments on the verdict. The principal judgment was in favor of Bohna and against HT. The other judgment was on Allstate's cross-claim for indemnity and was in favor of HT and against Allstate. The basis of the malpractice claim was HT's handling of Bohna's defense after Bohna was involved in an automobile collision which resulted in catastrophic injuries to the other driver. The crux of Bohna's complaint is that in order to save money for Allstate, HT pursued a strategy of making offers of judgment in excess of policy limits under Alaska Civil Rule 68 instead of settling the case within insurance policy limits. This strategy, approved by Allstate and agreed to by Bohna, caused Bohna to incur a large uninsured judgment. Bohna sued both Allstate and HT. Before trial, Allstate settled with Bohna for $1 million. They also entered into a loan receipt agreement under which Allstate loaned Bohna $3 million, which would be repayable out of (and to the extent of) any recovery Bohna might obtain in his suit against HT. After the settlement, Allstate cross-claimed against HT for indemnity. The jury returned a verdict of approximately $6 million for Bohna. Based on its interpretation of the law and the agreements between Bohna and Allstate, the trial court reduced the verdict by the $1 million settlement and part of the $3 million loan. The court also deducted 15% for Bohna's negligence and failure to mitigate damages, as found by the jury. Finally, in accord with a pretrial ruling that comparative indemnity principles do not apply in Alaska, the court entered judgment in HT's favor on Allstate's cross-claim because the jury also found Allstate partially at fault. On appeal the parties dispute the validity of the loan receipt agreement and to what extent  if any  it should result in a setoff. Also disputed are the alleged assignment of Bohna's malpractice claim, the propriety of the jury's consideration of the issues of Bohna's failure to mitigate damages and contributory negligence, the sufficiency of the evidence relating to an attorney's standard of care, the court's allocation of peremptory challenges, the exclusion of certain evidence, various jury instructions, and the award of costs and attorney's fees. With regard to Allstate's failed indemnity claim, the issues are whether the trial court erred by ruling that Allstate had to be found fault-free to recover, denying Allstate's motion to amend its cross-claim, and refusing to allow the jury to decide if Allstate breached its covenant of good faith and fair dealing. For the reasons set forth below, the Bohna judgment is reversed and remanded with direction to enter an amended judgment in Bohna's favor. The HT judgment is affirmed.