Liberty Mutual Group Settles Suit Accusing Lawyer of Extortion

Liberty Mutual Insurance Co. settled a lawsuit the insurer filed against one of its former outside lawyers claiming he tried to extort new legal work with a threat to expose misconduct by an unidentified company executive.

U.S. District Judge Richard J. Sullivan in Manhattan ordered the case dismissed after receiving a letter on Sept. 8 from Boston-based Liberty Mutual informing the court that they had reached an agreement with Michael J. Devereaux and his law firm Devereaux & Associates, according to a court filing.

Liberty Mutual sued Devereaux in January, saying the New York lawyer threatened to file a suit claiming the executive had engaged in “personal misconduct” and demanded a 5 percent kickback of all fees the company paid the law firm.

“We are pleased that the litigation has been resolved and that we have concluded our relationship with the Devereaux firm,” Liberty Mutual said in a statement.

Devereaux didn’t immediately return a message seeking comment on the settlement.

The case is Liberty Mutual Insurance Co. vs. Michael J. Devereaux & Associates PC, 11-cv-359, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net