A recent Law 360 story by Emily Sawicki, “Bottini & Bottini Inks Deal To End Lloyd’s $1.5M Fee Fight”, reports that Lloyd's of London has agreed to toss its $1.6 million legal fee complaint against law firm Bottini & Bottini Inc. after the two sides came to a private settlement agreement, dismissing the action from California federal court and thus ending a three-year battle over attorney fees in two underlying legal malpractice actions. The two sides entered a joint stipulation and agreement stating that the suit should be dismissed with prejudice, with both parties bearing their own costs, though no further details about the agreement were immediately available. A San Diego federal judge signed the order.
Lloyd's filed its initial complaint against the firm and name partner Francis Bottini in April 2020, seeking declaratory relief stating it would not be on the hook to defend and indemnify Bottini & Bottini, as well as reimbursement for defense fees and costs in underlying suits where Bottini represented clients who incurred $1.6 million in fees. Bottini represented two California residents, Carol Costarakis and Jeremy Melton, in a 2015 class action against real estate brokers over alleged hidden fees. According to the complaint filed by Lloyd's, Costarakis and Melton provided documentation that Bottini repeatedly assured them the firm was working on a "contingency fee basis," which the clients took to mean they would incur no out-of-pocket expenses in the action, no matter the outcome.
Upon reaching arbitration, Lloyd's said, the clients were ordered to pay brokers' $1.3 million attorney fees, triggering suits by Costarakis and Melton against the firm alleging legal malpractice, breach of contract, breach of fiduciary duty and fraud. "Bottini has failed to live up to his written promises to pay any judgment for costs (including prevailing party attorney fees) entered against Costarakis," the client said in her April 2020 complaint against the firm, later adding, "Bottini's misconduct has led to Costarakis' potential financial ruin."
Lloyd's argued in its complaint that the firm issued its promises to Costarakis and Melton prior to securing its policy and did not disclose the action on its September 2018 insurance application. Lloyd's issued a $1 million lawyers professional liability policy to Bottini & Bottini just days before lawyers for Costarakis notified the firm of a potential legal action. The suit Lloyd's filed against Bottini was stayed in October 2020 due to the pending underlying suits; the stay was lifted in July 2022.