A Chicago-based personal injury firm facing a lawsuit from one of its former attorneys over almost $1 million worth of unpaid sick and vacation time may need to fend off the claim or pay any potential damages without the aid of its insurance company.
On April 22, Connecticut-based Hartford Casualty Insurance Co. filed complaint for declaratory judgment asking Chicago's federal court to determine it has no duty to defend or indemnify Karlin, Fleisher & Falkenberg LLC (KFF) in the suit brought by former firm employee Ronald Fleisher.
Fleisher, who is now retired according to state attorney registration records, filed his action in Cook County Circuit Court in August 2013, alleging the firm owed him at least $951,000 in accrued and unused sick time and vacation pay.
Fleisher began working for the firm’s predecessor in 1974, and continued working there as it underwent various name changes, eventually operating under the name of K&F. The firm, which employs two other attorneys with the last name Fleisher, became KFF in 2008, according to the complaint.
In his suit, Fleisher asserts he came to work for the firm under an employment agreement guaranteeing him the ability to roll over any sick or vacation pay he accrued but did not use to following years.
While the policies governing unused sick and vacation time changed through the years, Fleisher contends he made sure his employment terms continued to include the provisions under which he first came to work at the firm.
Further, Fleisher alleges in his suit that his employment terms included provisions guaranteeing unused vacation time would be paid at 100 percent of his final salary, while sick time would be paid at 75 percent of what he was earning when he left the firm.
According to the suit, Fleisher retired in May 2011 with an annual salary of $358,800. He asserts when he retired, the firm owed him for 90 weeks of unused vacation time valued at $620,000 and 322 days of unused sick time worth at least $330,000.
He claims, however, the firm has opted not to pay him what he believes he is owed. This, he alleges, constitutes breach of contract and violates the Illinois Wage Payment and Collection Act, as he was an employee of the firm throughout his time with the company, and did not hold an ownership interest in the business.
Fleisher is being represented in his suit by attorneys Mark A. Cisek, Terence J. Moran and Karyn Bass Ehler of Hughes, Socol, Piers, Resnick & Dym Ltd. in Chicago. County court records show this case is set on the May 29 status call.
In its complaint against KFF, Hartford states it issued various liability insurance policies to the firm from 2010 to 2013 and that each of the policies include “employee benefits liability” coverage retroactive to 1999.
However, the insurance company asserts the terms of the policies exclude Fleisher’s suit from coverage because, among other reasons, his allegations include actions taken by the firm prior to 1999; the firm’s decision to not pay Fleisher the back pay for the sick and vacation time would stand as a “failure” by the firm “to perform any obligation or to fulfill any guarantee with respect to the payment of benefits;” and the employee benefits liability coverage “excludes coverage for any dishonest, fraudulent, criminal or malicious act.”
Hartford is being represented in the action by attorneys Michael J. Duffy and Ashley L. Conaghan of Tressler LLP in Chicago.