Pa. Firm Without Legal Existence Loses Standing in Malpractice Coverage Fight

The plaintiffs tried to argue that the firm’s name carried legal weight because the brothers shared office space, letterhead, malpractice insurance, sometimes worked cases together, and even shared a trust account. But Judge Murphy dismissed those as “somewhat halfhearted details” that were outweighed by plaintiffs’ “repeated assertions that D’Angelo & Eurell was not an entity.” 

The ruling makes clear two points that lawyers and insureds ignore at their peril. First, a trade name isn’t a substitute for an actual legal entity; if you want the benefits of suing as a firm, you have to properly form one. Second, malpractice insurers draft conversion exclusions broadly, and courts will enforce them when client funds or misappropriation claims are involved. Plaintiffs must show evidence that the underlying claim isn’t tethered to conversion. Here, Judge Murphy emphasized, they simply didn’t.

The case is D’Angelo & Eurell et al. v. Allied World Specialty Insurance Co., No. 2:23-cv-00397, in the U.S. District Court for the Eastern District of Pennsylvania.