In April ’05, the Georgia law firm of Garland , Samuel and Loeb (Garland) was sued. The plaintiff was a law firm from Florida. That firm had referred business to Garland in exchange for an agreement to provide it one-third of the resulting fees. The lawsuit claimed damages after Garland failed to provide any payment. At the time of the legal action, Garland was covered under a lawyer’s professional liability policy from American Safety Casualty Insurance Company (American).

After Garland received a grant of summary action against the Florida firm, it sought reimbursement from American for its legal expenses to defend itself. American denied the claim when Garland requested coverage. The insurer filed for summary judgment on the grounds that the loss did not involve professional services. A trial court ruled in favor of American and Garland appealed. In the appeal, the higher court reviewed the matter. The matter turned out to be a simple matter for the higher court. It viewed the underlying claim as involving a fee-sharing arrangement. In its view, fee-sharing is a transaction that is common to many businesses. Since fee-sharing did not rise to a level of a professional service, the trial court’s decision appeared appropriate. The lower court decision was affirmed in favor of American.

Garland, Samuel & Loeb, P.C., Appellant v American Casualty Insurance Co., Appellee. Court of Appeals of Georgia, No. A07AI900. Filed August 14, 2007. WL 651 S.E. 2d 177