Insurer Sues Attorney Accused of Murder : Crime: The lawyer has been charged in connection with a staged-wreck death. Firm seeks to recover $85,000 in disability payments.

An attorney who claims he becomes physically ill when he nears a courthouse is being sued by an insurance company trying to recover $85,000 it paid him in disability benefits after he was charged with murder in an unrelated insurance fraud case.

Gary P. Miller was arrested in October, 1992, at his Encino home for allegedly masterminding a staged wreck four months earlier on the Golden State Freeway in Sun Valley that killed Jose Luis Lopez Perez, 29, a participant in the scheme. The crash went awry when a car-carrier truck that was supposed to rear-end the car in which Perez was riding overturned and crushed the car’s back seat, killing Perez.

The crash was the starkest example of a chain of similar staged wrecks involving big rigs, which law enforcement authorities said marked a desperate and frightening escalation of the relatively common staged crashes on city streets.

After his arrest, Miller filed a claim for disability benefits with Equitable Life Assurance Society, stating that he suffered from job-related stress, a lack of concentration, mood swings and depression.

“I sleep a lot, procrastinate,” Miller said in the claim included in court documents. “I get physically sick when I get near a courthouse.”

Miller also told Equitable in May that his condition began “as a result of psychiatric complications related to my arrest for murder and conspiracy,” according to the lawsuit.

Miller’s physician, Dr. Jerome Karasic, also submitted a statement to the insurance company that diagnosed Miller as suffering from a “panic disorder” and “major depression” that have left him unable to work, according to the lawsuit filed in October in U.S. District Court in Los Angeles.

Karasic also said that Miller was receiving weekly psychotherapy and daily medication for his condition.

Even if he were fit to work, however, the California State Bar deemed Miller’s status “inactive” on May 23, thus barring him at least temporarily from practicing law. Miller also had previously promised not to practice when the subject was raised by the judge during his bail hearings.

A trial-setting date for Miller’s criminal case has been scheduled for Jan. 14.

The insurance company is suing to recover the $85,000 it has paid Miller in benefits. Equitable alleges that paying benefits to Miller would be compensating him for his illegal acts, according to the lawsuit.

The suit also alleges that Miller refused in September to submit to an independent medical examination, which is a condition he must meet in order to receive the benefits.

Harland Braun, an attorney representing Miller in his criminal proceedings, said that his client has been left mentally disabled because of “all that has happened to his law practice.”

“If a lawyer gets charged with a crime, it’s an enormous pressure on him,” Braun said. “He becomes mentally incapable of functioning as a lawyer. Now does that not qualify as a disability?”

Braun cited a recent case settled in Los Angeles Superior Court in which Dr. Gershon Hepner sued his insurance company for failing to pay him disability benefits after he pleaded guilty to 25 felony fraud and theft charges. Hepner, who prosecutors said used his medical practice as “a license to steal,” allegedly bilked insurance carriers out of up to $8 million.

A Superior Court jury ruled in favor of the former Century City doctor this month, awarding him more than $290,000 in benefits, said Ernst Lipschutz, an attorney representing Hepner in the civil lawsuit.

“The insurance company refused to pay his disability, saying that he had become ill because he was accused of crimes,” Lipschutz said. “But a contract is a contract. If you owe someone money, you still have to pay them, even if they go to jail.”