Insurance Law and Coverage Disputes Blog » E&O Insurance

Posner on Claims Made Coverage — “It Would Be Odd to Say that the Federal Appellate Judiciary ‘Arose From’ Columbus’s Voyages”

Michael Cessna — Tue, 24 Nov 2009 21:56:11 +0000

In the resolution of a coverage dispute between two professional liability insurers, Judge Posner recently had occasion to parse the meaning of the metaphysical phrase “arising from” in an exclusion to claims-made coverage and to limn the teleological contours of claims made coverage.

In James River Ins. Co. v. Kemper Cas. Ins. Co., 2009 WL 3447447 (7th Cir. Oct. 28, 2009), the Seventh Circuit reversed the district court’s holding that a prior-policy exclusion in a professional liability insurance policy did not bar one insurer’s claim for contribution from another insurer for the expense of defending and settling a malpractice claim against a law firm that had been insured in successive policy years by the insurers.

Kemper issued the insured a claims-made professional…

Speak of the Devil

Michael Cessna — Fri, 16 Oct 2009 16:17:54 +0000

We commented on Wednesday on the recent decision of the SDNY dismissing the rescission action of Milberg LLP’s E&O Insurers. We thus find of proximate interest to learn that William Lerach has been transferred from the federal prison facility in Lampoc, California to a halfway house in Stafford, Arizona. Reuters, Imprisoned lawyer Lerach moves to halfway house, Oct. 14, 2009. Quite predictably, the unrepentant Lerach is now busy blogging on excessive executive pay. Id.

True Blood: Southern District of New York Rules Statute of Limitations Bars Milberg’s Professional Liability Insurers’ Action for Rescission

Michael Cessna — Wed, 14 Oct 2009 23:01:16 +0000

Plaintiffs’ firms can sometimes appear to be vampiric. This thought comes to mind as we read of the recent successes of Milberg, LLP, recently named to the National Law Journal’s eighth annual Plaintiffs’ Hot List. Michael Moline, 2009 Plaintiffs’ Hot List: The Firms to Watch in 2009, Law.com, Oct. 6, 2009.

Readers will doubtless recall that on June 18, 2008, Milberg’s predecessor, Milberg, Weiss, Bershad, Hynes & Lerach, pled guilty to federal criminal charges involving the payment of kickbacks to named plaintiffs in class actions in which the firm served as counsel and agreed to pay a fine of $75 million. Four of its named partners also pleaded guilty to criminal charges—Melvyn Weiss, William Lerach, Steven Schulman, and David Bershad. All…

Claims Made Coverage Requires that a Claim Both be Paid and Reported Within the Policy’s Coverage Period

Michael Cessna — Thu, 03 Sep 2009 17:47:59 +0000

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…

Insurer’s Coverage File is not Subject to Either the Work-Product Doctrine or the Attorney-Client Privilege

Michael Cessna — Fri, 28 Aug 2009 16:39:38 +0000

In re Professionals Direct Ins. Co., 2009 WL 2581289 (6th Cir. Aug. 24, 2009), the court denied Professionals Direct Insurance Company’s petition for writ of mandamus to vacate a discovery order entered by the United States District Court for the Southern District of Ohio. In denying the petition, the court limns the extent to which an insurer’s coverage file is subject to discovery in coverage litigation.

The claim arises out of an action for malpractice brought against the Wiles, Boyle, Burkholder & Bringardner Co., an Ohio law firm specializing in insurance defense. In 2001, Wiles was retained by Illinois National Insurance Company to defend a suit against an employee of one of Illinois National’s insureds. Wiles was not successful in its defense, and…

Veterinarian Owed Duty To Defend Under A Professional Liability Policy

Michael Cessna — Sat, 22 Aug 2009 13:00:17 +0000

In Centennial Insurance Co. v. Patterson, 564 F.3d 46 (1st Cir. 2009), the court assigned a broad interpretation to an insuring agreement in a Veterinarian’s Professional Liability Policy, holding that Centennial Insurance had an obligation to defend a veterinarian against a decidedly peculiar pro se civil action instituted against Patterson and 80 or more defendants, including the state of Maine. The pro se plaintiff had been charged by the state with animal cruelty for not providing proper food, water, or shelter to approximately 60 animals on her farm. She responded with her lawsuit against Patterson and the other defendants with a farrago of claims, including the authorized treatment of stolen animals, libel, and slander.

The insuring agreement of Centennial’s policy obligated Centennial to investigate and defend…