A federal judge has granted a Chicago law firm a chance to dispute at trial an insurance company’s allegations the firm’s lawyers bungled the defense of a malicious prosecution suit brought against the city of Markham by a police officer who had been found not guilty on charges of theft for allegedly working for the city while clocked in as a bank security guard.

On April 30, U.S. District Judge Matthew F. Kennelly declined to grant a request from Scottsdale Insurance for summary judgment in its legal malpractice claim against the law firm of Johnson & Bell and attorneys Moyenda M. Knapp and Juanita B. Rodriguez.

Scottsdale’s litigation came in the wake of a $2.2 million jury verdict awarded in 2011 to Markham police officer Terrance White.

White had sued the southwestern Cook County city in 2008 for malicious prosecution, after a jury found him not guilty of theft. Those charges had been brought against him in 2005 after a city investigation prompted officials to allege White had not only worked two jobs as a law enforcement officer and a bank security guard, but had worked shifts for the police department while on the clock at the bank.

When White sued, the city attempted twice to put in a claim on its liability insurer, Scottsdale, to assume the defense. However, Scottsdale twice – first in 2008 and again in 2010 - rejected the claim, saying coverage was excluded by the policy’s “employment policies or practices” clause.

Markham then retained Johnson & Bell to represent them at trial, ultimately suffering the $2.25 million judgment in February 2011.

However, Markham then filed a third claim on Scottsdale for defense and indemnification, and the insurer then agreed to take up the defense. Scottsdale then fired Johnson & Bell, retained new counsel and settled the case for $1.7 million.

At the same time, the city had moved against White, firing him for “violating Markham’s secondary employment policy.” In 2013, a judge ruled against the city. In a settlement, the city agreed to reinstate White and credited his pension for the years he had been off the force.

At that time in 2013, Scottsdale then sued Johnson & Bell for legal malpractice, alleging the firm was negligent in its defense of Markham.

Scottsdale later moved for summary judgment in its favor.

Kennelly, however, said more argument was necessary before he could rule one way or another regarding the legal malpractice claim.

The dispute centers on whether the lawyers from Johnson & Bell erred in potentially limiting their own options in defending the city, which they alleged allowed White to collect more in damages than he otherwise should have.

According to the law firm, they were limited by a judge’s order granting a motion barring the lawyers from introducing “any evidence of any other lawsuits or claims pending or previously raised against” White. That, they said, prevented them from using “testimony, evidence, documents, argument or reference to the outcome of” the administrative proceedings that resulted in White’s termination.

Scottsdale, however, argues Johnson & Bell itself “negligently crafted an overly broad (motion) and thus caused the trial court to exclude evidence that would have been highly beneficial to Markham.”

The judge said evidence in the court record on who actually crafted the motion was inconclusive with “facts supporting each party’s interpretation of what transpired.”

Kennelly has set a hearing on May 11 to discuss trial dates and the possibility of a settlement.

Scottsdale is represented in the action by the firm of Flaherty & Youngerman, of Chicago.

Johnson & Bell is represented by the firm of Konicek & Dillon, of Geneva, and attorneys David M. Macksey and Joseph R. Marconi, of Johnson & Bell.

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