Wolkowitz

Edward M. Wolkowitz, as chapter 7 bankruptcy trustee for Shamrock Tire, Etc., Inc. (Shamrock), sued Shamrock’s insurer, and the attorneys retained by the insurer to defend Shamrock, alleging (1) the insurer’s bad faith refusal to accept a pretrial offer to settle a personal injury action against Shamrock within policy limits and (2) the attorneys’ legal malpractice and breach of fiduciary duty in connection with such refusal to settle. The trustee seeks to recover as damages the amount of an allowed claim filed by the personal injury claimant. The allowance of the claim (in an amount in excess of $26 million) was the result of an agreement between the claimant and the trustee and occurred upon the bankruptcy court’s granting of the trustee’s motion seeking such allowance.

The trial court sustained the insurer’s and the attorneys’ demurrers to the trustee’s complaint without leave to amend. The trustee appeals from the resulting dismissal of his complaint, raising several contentions. We conclude that the complaint fails to state a cause of action against both the insurer and the attorneys because it fails to allege facts sufficient to establish that Shamrock suffered any…