West Bend Mutual Insurance Co. v. Schumacher

An employee filed a workers’ compensation claim against an employer insured by West Bend Mutual Insurance Company (West Bend) (plaintiff). West Bend retained a law firm that gave attorney Paul Schumacher (defendant) primary responsibility for defending against the claim. Allegedly Schumacher failed to adequately investigate the claim or the employee’s preexisting medical condition and did not depose the employee’s expert, a doctor whose testimony would have helped West Bend. Schumacher also allegedly failed to advise West Bend about material facts and its legal options before the hearing, did not know a material witness would be unavailable, and inappropriately revealed West Bend’s defense theory to opposing counsel. West Bend sued Schumacher for malpractice, claiming those failures ultimately made it accept a disputed settlement to limit its exposure and pay more. After multiple amendments, West Bend’s complaint summarily claimed that “there existed certain factual defenses and a medical causation defense” to the employee’s claim that forced West Bend “to accept a disadvantageous position which greatly compromised its ability to defend the claim,” without explaining what those defenses were or exactly how West Bend was forced into accepting a worse settlement than it otherwise would have. West Bend did allege that it had to pay more money because of a stipulation Schumacher made about the compensability of the claim but again did not specifically explain how it would have paid less had Schumacher not made the stipulation. The district court dismissed the complaint for failure to plead a cause of action for legal malpractice with sufficient specificity. West Bend appealed.