Continental Casualty Company has formally stated in a federal court filing that it bears no duty to defend or indemnify California-based law firms and attorneys accused in a $100 million Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuit filed by Ford Motor Company.
In its complaint filed Friday in the U.S. District Court for the Central District of California, Continental Casualty Co. clarified that the professional liability policies issued to Knight Law Group LLP and Wirtz Law APC do not provide coverage for the claims at issue. The insurer emphasized that the underlying lawsuit involves allegations related to administrative fee collection and billing practices rather than the performance of legal services covered under the policies.
Ford’s original suit, filed in May, accuses Knight Law, Wirtz Law, the Altman Law Group, and six individual attorneys of orchestrating a scheme to defraud automakers by inflating legal fees under California’s Song-Beverly Consumer Warranty Act. Allegations include submission of fictitious billing, such as claims for attorneys working impossible hours or attending multiple distant trials simultaneously. Ford identifies Knight Law and its founding partner, Steve B. Mikhov, as leaders of this alleged fraudulent enterprise.
Despite requests from Knight Law and Wirtz Law for insurance coverage, Continental asserted that coverage is barred under California Insurance Code Section 533 due to the willful acts of the insured. Additionally, the policies’ intentional acts exclusion precludes coverage for claims stemming from dishonest or fraudulent conduct.
Continental further noted that damages sought under the RICO claims, including treble damages and disgorgement of funds paid to the insured firms, fall outside the definition of insurable damages under the policies and applicable law.
Legal representatives for Continental Casualty Co. include Jennifer Mathis, Peter Bloom, and James A. Hazlehurst of Troutman Pepper Locke LLP. Counsel for the defendants has not been disclosed.
The case is docketed as Continental Casualty Co. v. Knight Law Group LLP et al., case number 2:25-cv-07126.
