In Gargano v. Liberty International Underwriters, Inc., No. 08-2287, 2009 WL 2020408 (1st Cir. July 14, 2009), the insured, Paul Gargano, sought indemnification from his insurer, Liberty International, for a judgment that had been entered in favor of Christopher Hug, on a claim for misrepresentation and unfair and deceptive business practice arising out of Gargano’s failure to satisfy Hug’s attorney’s lien on a worker’s compensation claim for permanent disability. After Hug learned that Gargano had retained fees that were subject to Hug’s lien, Hug filed suit in March 2005. Gargano, however, did not report the claim to Liberty International until 2007.

The court held that the professional-liability policy did not afford Gargano coverage for the judgment, because the claim was not both paid and reported within the term of the three policy periods.  The claim was first made in March 2005 when Hug filed his suit against Gargano but was not reported by Gargano to Liberty International until 2007.  2009 WL 2020408, at *3.

The court further rejected Gargano’s argument that his failure to timely report the claim should be excused because Liberty International failed to deliver its policy to him. First, the court found it material that Gargano had paid the premiums on the policy, thus admitting the formation of a contract. 2009 WL 2020408, at *3. Second, the court concluded that Gargano could not claim ignorance of the terms of the policies, because the policies had been delivered to his insurance agent. Massachusetts law imputes to the insured the knowledge of his agent. 2009 WL 2020408, at *4. Third, the court pointedly remarked that “it was Gargano’s responsibility to understand the type of coverage he purchased through the agent or broker, and we are not at liberty to rewrite either the policy or Massachusetts law to conform to Gargano’s alleged expectations.” Id.