The $20 Million E&O Lawsuit That Fell Apart Over Discovery and Expert Failures

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The Superior Court’s Business Litigation Session dismisses a high-stakes broker negligence claim after the plaintiff fails to prove its legal fees with admissible evidence.

It’s the kind of case that keeps insurance brokers up at night. A major private equity firm, Old Ironsides Energy LLC (OIE), sued its broker, Marsh & McLennan Agency (MMA), after being left uninsured for a multi-year investigation by the Securities and Exchange Commission (SEC). After spending nearly $30 million in legal fees, OIE sought to recover the $20 million in policy limits it claimed it should have had. Yet, in a stunning turn of events, the court dismissed the entire case.

The broker didn’t win because the court found it had met the standard of care. Instead, this high-stakes error and omission claim was defeated because the plaintiff fatally undermined its own case, providing a powerful lesson for any professional involved in insurance litigation. The case unraveled due to OIE’s critical errors in proving its damages, specifically its handling of discovery and its own expert witness.

Factual Background: A Classic E&O Allegation

The dispute began when OIE, a newly-registered investment advisor, sought comprehensive insurance coverage. Recognizing its vulnerability as a new firm, OIE specifically wanted protection against formal SEC investigations for the company as an entity. To secure this crucial coverage, it hired MMA.

Unfortunately, a gap in the coverage came to light in the worst possible way. In 2016, OIE received an SEC subpoena that launched a formal investigation into the company. When OIE turned to its insurance, it discovered that while its individual officers were covered, MMA had never placed the requested formal investigation coverage for the OIE entity itself. Left without coverage, OIE mounted a vigorous defense that ultimately resulted in a favorable settlement for a minor marketing rule violation. While the outcome was a success, the price was steep: OIE incurred nearly $29 million in defense fees. OIE then sued MMA and its affiliates for professional negligence, breach of contract, and other claims to recover its losses.

The Litigation Unravels: Discovery Disputes and Expert Testimony

On its face, the case presented a serious professional liability risk for the broker. However, the litigation took a sharp turn as OIE made a series of critical missteps in trying to prove its damages.

The Withheld Documents

To win its case, OIE had to prove that the nearly $29 million in legal fees it paid were reasonable. Yet, during the discovery phase, OIE made a fateful choice. It produced only the “cover pages and cover letters for 56 legal invoices” and deliberately withheld the detailed billing records and diary entries that showed the actual work performed by its attorneys.

The defendants’ expert, Andrew Calamari, pointed out that this lack of evidence made it impossible to form a credible opinion on the reasonableness of the fees. Realizing its predicament, OIE tried to introduce the detailed records—the “11th Hour Documents”—long after discovery had closed. The court flatly rejected these attempts at what the defense called “gamesmanship,” barring OIE from using the very documents it needed to substantiate its damages claim.

The Battle of the Experts

With its direct evidence of fees excluded, OIE’s entire case rested on the testimony of its damages expert, Gregory Bruch. This set the stage for a decisive battle over his report.

• Plaintiff’s Expert (Gregory Bruch): The defense moved to strike Bruch’s opinion, arguing it was “fatally deficient” because it was based on pure speculation. Having never reviewed the detailed invoices, Bruch opined that the fees were reasonable by speculating on what OIE’s attorneys “must have,” “ought to have,” or “surely” did during the SEC investigation.
• The Last-Ditch Affidavit: Facing summary judgment, OIE made a final, desperate move. It submitted a new, one-paragraph affidavit from Bruch asserting that the limited materials he reviewed were “typical” of what experts in the field would rely on. The defense immediately moved to strike the affidavit, calling it a “transparent stunt” designed to “plug the obvious holes” in his testimony. They pointed out that the new opinion was served sixteen months after the court-ordered deadline for expert disclosures had passed.

The Court’s Decision: The Knockout Punch

In a decisive order issued on June 9, 2025, Superior Court Justice Kenneth Salinger ruled in favor of the defendants on every critical point, effectively ending the case.

First, the court struck the core of Attorney Bruch’s expert report. Justice Salinger found that Bruch’s opinions on the reasonableness of the fees were “not based on anything other than Bruch’s say-so”. He noted that an expert’s opinion cannot be based on “mere speculation or a guess” and must have a reliable foundation. The court dismissed Bruch’s testimony as “ipse dixit,” a Latin term for an unsupported assertion that rests solely on the authority of the speaker.

Second, the court struck Bruch’s supplemental affidavit, calling it both untimely and meritless. Justice Salinger noted that OIE had provided the new opinion sixteen months after the deadline and that, in any case, the opinion was “even more conclusory and speculative than his original opinions”.

Finally, these rulings delivered the knockout punch. The court held that to establish its damages, OIE was required to present competent expert testimony that its legal fees were reasonable. With Bruch’s opinions now excluded from the record, OIE had no admissible evidence to prove this essential element of its claim. This failure, the court concluded, “renders all other facts immaterial’ and mandates summary judgment in favor of the moving party.” The court entered final judgment for the defendants on all claims.

Key Takeaways for Massachusetts Insurance Professionals

OIE’s $20 million claim was lost not because of a weak liability theory, but because of self-inflicted wounds in litigation. This case provides several powerful takeaways:

• 1. Proving Damages is Not Optional. This case is a stark reminder that a strong liability argument is worthless without admissible, concrete proof of damages. A plaintiff cannot simply state a number; it must be able to support that number with credible and properly disclosed evidence.
• 2. Litigation “Gamesmanship” is Perilous. OIE’s decision to withhold its detailed billing records during discovery backfired spectacularly, preventing the plaintiff from using the very evidence it needed to prove its case. This serves as a powerful warning against tactical gamesmanship in discovery.
• 3. Expert Opinions Require a Foundation. An expert’s credentials are not enough. As Justice Salinger’s ruling makes clear, an opinion must be grounded in a reliable factual foundation and a sound methodology. The court’s dismissal of a highly qualified expert’s testimony as mere “ipse dixit” underscores that an expert’s unsupported “say-so” is not evidence and will not stand up in court.

Editorial Note:
This article summarizes and comments on public court records. All quotations and descriptions are drawn from official filings and rulings. Any commentary reflects the author’s analysis for informational purposes only.