Wiley Rein LLP has a full-service insurance coverage practice focused on professional liability policies issued to lawyers, accountants, architects, engineers, insurance agents, real estate brokers, and other professionals. Insurers regularly retain Wiley Rein to handle their most important and complex professional liability coverage matters on a national basis.
Wiley Rein plays many roles for its professional liability insurance clients. As coverage counsel, Wiley Rein advises insurers as to their rights and obligations under professional liability policies and assists clients in communicating their coverage positions clearly and precisely to the insureds. The firm also advises insurers regarding their options for handling significant coverage issues, including when and how to negotiate, litigate, and raise legitimate coverage defenses without creating extra-contractual exposure.
As strategic counsel, Wiley Rein provides its insurer clients with advice regarding the merits of underlying malpractice claims against insured professionals and strategies for settlement or claim resolution. In this role, Wiley Rein avoids duplicating work already undertaken by defense counsel but at the same time recognizes that carriers sometimes need an independent analysis of the merits of a claim by experienced counsel who represent the interests of the carrier, not those of the insured.
In both its coverage counsel and strategic counsel roles, Wiley Rein often represents carriers at settlement conferences and mediations. These assignments frequently involve matters in which the firm has been involved for some time, but in many cases carriers retain the firm for the first time shortly in advance of a settlement conference or mediation in order to take advantage of the firm's experience and expertise both in the relevant substantive issues and in the art of negotiation.
Wiley Rein also provides underwriting and policy-drafting advice and assistance to its insurer clients, and assists carriers by providing risk management advice for their insureds. In this regard, Wiley Rein attorneys have assisted clients in drafting policy forms and endorsements for a wide range of professional liability policies, including policies for lawyers, accountants, architects and engineers, insurance agents, real estate brokers, and miscellaneous professional liability and technology professionals.
Finally, when high-stakes litigation is necessary, carriers routinely rely on Wiley Rein to represent their interests in coverage and bad faith litigation throughout the country. Many of these cases are resolved by cost-effective settlements. Others require litigation to reach a conclusion, including the following publicly reported cases decided recently:
- Navigators v. Hamlin, et al., No. 6:14-cv-196-MC (D. Or. Mar. 10, 2015): obtained summary judgment determining that insurer had no duty to defend or indemnify insured accountant for lawsuit alleging that insured breached agreement to repay loans from client because that activity did not constitute a “professional service” and because personal profit exclusion barred coverage for suit seeking return of funds from insured to which he was not legally entitled.
- Wesco Insurance Co. v. Regas, et al., No. 1:14-cv-00716 (N.D. Ill. Feb. 4, 2015): prevailed on motion to dismiss claim under lawyers professional liability policy on grounds that the allegations against the insured, including allegations of an ongoing conspiracy, pertained solely to acts before the policy’s retroactive date, and therefore were barred from coverage.
- W.C. & A.N. Miller Development Co. v. Cont’l Cas. Co., No. 14-cv-00425-GJH (D. Md. Nov. 7, 2014): obtained declaratory judgment determining that no coverage existed under a D&O policy for a 2010 lawsuit against the insured and certain of its subsidiaries/officers because the 2010 lawsuit and an earlier filed 2006 lawsuit involved “Interrelated Wrongful Acts” and therefore were properly treated as a single claim that was first made in 2006, years before the inception of the policy.
- Darwin National Assurance Company v. Rosenthal, et al., No. 2:13-cv-05670-FMO-RZ (C.D. Cal. Sept. 24, 2014): obtained summary judgment determining that insurer had no duty to defend or indemnify insureds in an underlying malpractice suit arising from sale of investments in mortgages to law firm client by related but non-insured real estate investment company owned by insured based on investment advice and business enterprise exclusions.
- Financial Strategy Group, PLC v. Continental Casualty Co., No. 2:14-cv-2154 (W.D. Tenn. Sept. 23, 2014): prevailed on motion to dismiss complaint seeking coverage under accountants professional liability policy on grounds that an unambiguous tax shelter exclusion precludes coverage for two underlying complaints alleging that the insured implemented investment strategies constituting illegal tax avoidance schemes.
- 527 Orton LLC v. Continental Cas. Co., No. 13-61571 (S.D. Fla. Sept. 22, 2014): obtained summary judgment holding that no coverage existed under any of a series of consecutive claims-made and reported policies issued to a law firm for a claim that was first made during one policy period but first reported during a later period, and rejecting the claimants’ argument that existing 11th Circuit precedent permitted an insured to report a claim at any time during a period of continuous coverage provided by the same insurer under the same policy number.
- Christian J. Lessard v. Continental Casualty Co., No. 1:14-cv-00063-CMH-TRJ (E.D. Va. Aug. 19, 2014): obtained summary judgment dismissing lawsuit under directors and officers liability policy on grounds that that the claim against the insured was first made before the policy period, the policy’s prior notice exclusion barred coverage, the amounts sought were not “loss” under Virginia law but instead a contractual obligation and pre-existing judicial obligation, notice was not given “as soon as practicable” as a matter of law, and the insured’s settlement offers without the insurer’s written consent contravened the unambiguous cooperation clause in the policy.
- Kilcher v. Continental Cas. Co., --- F.3d ----, 2014 WL 1317296 (8th Cir. Apr. 3, 2014): obtained Eighth Circuit reversal of adverse district court decision as the court of appeals held that a joint lawsuit by four siblings against an investment advisor alleged “Interrelated Wrongful Acts” and therefore constituted a single claim because each sibling alleged that the adviser provided unsuitable investment advice and breached her fiduciary duties to each sibling in the same manner.
- Christensen v. Darwin Nat’l Assurance Co., No. 2:13-CV-00956-APG-VCF (D. Nev. Apr. 14, 2014): obtained summary judgment for insurer, holding that business enterprise, trust, and investment advice exclusions in a lawyers’ professional liability policy barred coverage for claim against insured attorney for alleged self-dealing and related misconduct.
- M Bar C Construction Inc. v. Continental Cas. Co., et al., No. 2012-37-00088258-CU-IC-CTL (Cal. Super. Ct., San Diego Cty. Jan. 3, 2014): obtained favorable summary judgment ruling that an exclusion in an employment practices liability policy for any alleged violation of laws “governing wage, hour and payroll policies” encompassed all of the California Labor Code claims asserted against the insured in the underlying class action litigation, including a claim for failure to reimburse business expenses, and that none of the relief sought in the underlying action qualified as “Loss”; the court also held that the insurer gave adequate notice of change in policy terms and, regardless of its ruling on the merits of the coverage dispute, the “genuine dispute doctrine” applied to bar the insured’s bad faith claim.
- Cohen v. Continental Cas. Co., No. 32,391, 2013 WL 5741841 (N.M. Ct. App. Sept. 23, 2013): prevailed on appeal of trial court’s order dismissing a declaratory judgment action brought by an injured party against a lawyer's professional liability insurer and obtained favorable ruling that, under New Mexico law, claimants cannot bring direct actions against insurers or join insurers as defendants in legal malpractice lawsuits absent express contractual or statutory authorization.
- Paulus Sokolowski & Sartor, LLC v. Continental Cas. Co., No. 12-7172 (D.N.J. Aug. 30, 2013): represented insurer in coverage litigation regarding an architects and engineers professional liability policy in the District of New Jersey, obtaining a decision that the insured had failed to meet the unambiguous requirement that it obtain prior written consent to receive reimbursement of claims expenses. The court noted that the interpretive principles calling for insurance policies to be interpreted against the insurer are less applicable where the policyholder is a large sophisticated business.
- Scott J. Pias v. Continental Cas. Ins. Co., No. 2:13-CV-00182-PM-PJH (W.D. La. Aug. 6, 2013): prevailed on motion for judgment on the pleadings obtaining a favorable ruling with respect to a matter of first impression under Louisiana law that a legal malpractice policy did not respond to what the court characterized as a fee dispute between the insured lawyer and his former client, both because no “legal services” were alleged and because the relief sought did not constitute “damages.”
- Clauson & Atwood v. Professionals Direct Ins. Co., No. 12-cv-199, 2013 WL 1966058 (D.N.H. May 13, 2013): obtained summary judgment that no coverage was available for a claim made against the insured law firm under either of two consecutive claims made and reported policies because the claim was not both first made and reported during either policy.
- VierraMoore, Inc. v. Continental Casualty Co., __ F. Supp. 2d __, No. 2:12-cv-01926-MCE-EFB, 2013 WL 1628245 (E.D. Cal. Apr. 15, 2013): prevailed on summary judgment motion and obtained favorable ruling that a bond exclusion and insured vs. insured exclusions barred coverage for a claim brought by a homeowner’s association against its property management company, where the association alleged that the property manager had negligently failed to secure extensions of surety bonds covering construction work on the association’s property; the court also held that the insurer was entitled to recoupment of sums paid to settle the underlying action subject to a reservation of rights.
- Continental Cas. Co. v. Marshall Granger & Co., LLP, __ F. Supp. 2d __, No. 11 CIV 3979 (CS), 2013 WL 372162 (S.D.N.Y. Jan. 31, 2013): prevailed on motion to dismiss and obtained favorable ruling in a rescission action that an accountants professional liability policy’s innocent insured provision was triggered only if coverage was denied pursuant to the dishonesty exclusion and it did not act as a severability provision precluding rescission of the policy as to all insureds.
- Simpson & Creasy, P.C. v. Continental Cas. Co., No. CV409–202, 2012 WL 5389818 (S.D. Ga. Oct. 31, 2012), 2011 WL 4810010 (11th Cir. Oct. 12, 2011) and 770 F. Supp. 2d 1351 (S.D. Ga. 2011): obtained summary judgment dismissing a lawsuit against our insurer client under a lawyers professional liability policy, and an affirmance of the judgment by the U.S. Court of Appeals for the Eleventh Circuit, on the grounds that a pre-lawsuit dispute between the claimant and the insureds about the repayment of money was a claim first made prior to the inception of the applicable claims made and reported policy, and that subsequent claims of legal malpractice in a lawsuit filed during the policy period were related claims as to the pre-lawsuit dispute and thus deemed to arise at the same time as the pre-lawsuit dispute.
- Coats, Rose, Yale, Ryman & Lee, P.C. v. Navigators Specialty Ins. Co., 2012 WL 4858194, No. 12-10055 (5th Cir. Oct. 15, 2012) and 830 F. Supp. 2d 216, (N.D. Tex. 2011): obtained summary judgment in favor of the insurer, and an affirmance by the U.S. Court of Appeals for the Fifth Circuit, determining that under a lawyers professional liability policy giving the insurer the right and duty to defend, the insured was not entitled to select independent defense counsel where the grounds on which the insurer reserved rights did not create a conflict between the insurer and the insured as to how the underlying case would be defended, and thus the insurer had no obligation to pay for counsel hired by the insured.
- Navigators Ins. Co. v. Baylor & Jackson, PLLC, 888 F. Supp. 2d. 55, No. 12-cv-242, 2012 WL 3683011 (D.D.C. Aug. 28, 2012): obtained summary judgment for an insurer on the grounds that policy exclusion for claims based on or arising out of the loss or misappropriation of assets within an insured control barred coverage for six lawsuits that arose out of the insured law firm’s participation in an alleged fraudulent investment scheme.
- Continental Cas. Co. v. Battery Wealth, Case No. 11-1600 (4th Cir. Aug. 2, 2012): represented an insurance carrier as lead appellate counsel, obtaining a decision from the Fourth Circuit holding that an accountants professional liability policy’s innocent insured provision did not save coverage where the policy’s prior knowledge condition to coverage had not been satisfied.
- Continental Casualty Co. v. Law Offices of Melbourne Mills, Jr., PLLC 676 F.3d534 (6th Cir. 2012) and No. 5:06-272-JMH, 2010 WL 996472 (E.D. Ky. Mar. 16, 2010): represented an insurance carrier in coverage litigation regarding a lawyers professional liability policy in the trial court and on appeal to the Sixth Circuit, obtaining a published decision from the Sixth Circuit holding that an insured attorney's failure to disclose on the insurance application circumstances surrounding his knowledge of circumstances that could result in a claim and his knowledge of pending disciplinary proceedings constituted material misrepresentations justifying rescission of the policy, and that, alternatively, the policy's dishonesty exclusion barred coverage for the ensuing malpractice action. The Sixth Circuit also held that materiality could be determined as a matter of law on summary judgment.
- Continental Cas. Co. v. Jones, et al., No. 3:09-cv-1004-JFA, 2011 WL 3880963 (D. S.C. Sept. 2, 2011) and 2012 WL 530002 (D. S.C. Feb. 17, 2012): obtained summary judgment in favor of insurer on the grounds that an accountants professional liability policy's prior knowledge condition to coverage was not satisfied because of an insured's knowledge of his pre-policy misappropriation of client funds, and that the policy's innocent insured provision did not save coverage for other insureds who were unaware of the misconduct.
- Maryland Accounting Services, Inc., et al. v. Continental Cas. Co., No.1:11-cv-00145-CCB, 2011 WL 5853906 (D. Md. Nov. 21, 2011): obtained summary judgment in favor of an insurer on grounds that the financial products exclusion in a professional liability policy barred coverage because the claim against the insured accounting firm concerned preparation of allegedly fraudulent workers compensation insurance applications and any services that might be considered "professional services" under the policy, such as payroll records, were rendered in connection with insurance applications and not in connection with "financial products" as defined by the policy.
- Professional Asset Strategies v. Continental Cas. Co., 447 F. App'x 97 (11th Cir. 2011) and No. 2:09-cv-1238-AKK, 2010 WL 4284991 (N.D. Ala. Aug. 27, 2010): obtained summary judgment in favor of the insurer dismissing breach of contract and bad faith claims, and an affirmance by the U.S. Court of Appeals for the Eleventh Circuit, in a case involving whether an accountants professional liability policy's innocent insured provision saved coverage where the policy's prior knowledge condition to coverage had not been satisfied.
- Bruce Boys v. Continental Cas. Co., 808 F. Supp. 2d 410 (D. Conn. 2011): obtained summary judgment in favor of the insurer, and defeated bad faith claim asserted by insured's judgment creditor, on grounds that insured failed to satisfy the policy's unambiguous requirements that a claim be first made and reported to the insurer in writing during the policy period or extended reporting period.
- Brian J. McKeen, et al. v. Continental Cas. Co., No. 2:10-cv-10624, 2011 WL 3839803 (E.D. Mich. Aug. 30, 2011): obtained summary judgment in favor of the insurer, and defeated insured's bad faith claim, on grounds that insured failed to satisfy the prior knowledge condition because insured law firm had knowledge of circumstances that might reasonably be expected to be the basis of a claim before the policy incepted.
- Continental Cas. Co. v. Howard Hoffman & Associates, 955 N.E.2d 151 (Ill. App. Ct. 2011) and No. 08CH25568 (Ill. Cir. Ct., Cook County, Mar. 10, 2010): obtained summary judgment in the trial court, and an affirmance on appeal, for an insurer on the grounds that 12 claims arising out of a common embezzlement scheme allegedly perpetrated by an employee of the insured law firm arose out of related acts or omissions and therefore were related claims, subject to the policy's single per-claim limit of liability.
- Capitol Specialty Ins. Corp. v. Sanford Wittels & Heisler, LLP, et al., 793 F. Supp. 2d 399 (D.D.C. 2011): obtained summary judgment for an insurer on the grounds that the prior knowledge provision in a lawyer's professional liability policy was not satisfied because prior to the policy's inception the insured law firm had knowledge of circumstances that might reasonably be expected to be the basis of a claim.
- Darwin National Assurance Co. v. Hellyer, et al., No. 10-cv-50224, 2011 WL 2259801 (N.D. Ill. June 7, 2011): obtained judgment on the pleadings for an insurer on the grounds that the prior knowledge provision in a lawyer's professional liability policy was not satisfied because prior to the policy's inception the insured lawyer had knowledge of circumstances that might reasonably be expected to be the basis of a claim and because the allegations in the underlying claim either indirectly resulted from or were a consequence of the insured's business interest in a separate entity.
- Cuthill & Eddy LLC v. Continental Cas. Co., 784 F. Supp. 2d 1331 (M.D. Fla. 2011): obtained summary judgment for an insurer on the grounds that the prior knowledge provision in an accountants professional liability policy was not satisfied because prior to the policy's inception the insured accountants had knowledge of circumstances that might reasonably be expected to be the basis of a claim.
- Corbello v. Moore, et al., No. 10-cv-5357, 2011 WL 1516327 (W.D. Wash. Apr. 20, 2011): obtained summary judgment in favor of an insurer on the grounds that the business enterprise exclusion in a lawyers professional liability policy barred coverage for a legal malpractice claim arising out the insured attorney's ownership interest where the alleged malpractice began prior to, but continued after, the acceptance of that interest.
- Bryan Bros., Inc. v. Continental Cas. Co., 660 F.3d 827 (4th Cir. 2011) and 704 F. Supp. 2d 537 (E.D. Va. 2010): obtained summary judgment in favor of an insurer, which ruling was affirmed by the U.S. Court of Appeals for the Fourth Circuit, on the grounds that the accountants professional liability policy's prior knowledge condition to coverage had not been satisfied and the policy's innocent insured provision was inapplicable.
- Phillips & Associates, P.C. v. Navigators Ins. Co., 764 F. Supp. 2d 1174 (D. Ariz. 2011): obtained partial summary judgment in favor of the insurer determining that, under both California law and as a question of first impression under Arizona law, an insurer may reserve the right to seek reimbursement of non-covered defense and indemnity amounts, absent bad faith and provided that insurer gives notice of its reservation of rights to the insured.
- Ross v. Continental Cas. Co., 393 F. App'x 726 (D.C. Cir. 2010) and 420 B.R. 43 (D.D.C. 2009): obtained summary judgment in favor of the insurer, and an affirmance by the U.S. Court of Appeals for the District of Columbia Circuit, on the grounds that the prior knowledge condition to coverage in a lawyers professional liability policy was not satisfied.
- Carolina Cas. Co. v. DeMay, No. 1:10-cv-00511-ESH (D.D.C. Aug. 3, 2010): obtained favorable result for insurer by using interpleader action to facilitate settlement, notwithstanding competing claims on disputed policy proceeds by claimant and the United States.
- Continental Cas. Co. v. Donald T. Bertucci, Ltd., 926 N.E.2d 833 (Ill. App. 2010): obtained a determination that there was no defense or indemnity coverage for a claim against an insured law firm because none of the relief sought constituted "damages," and that there was no supplementary coverage for a related disciplinary proceeding because no "legal services" were alleged.
- Koger Mgmt. Group, Inc. v. Continental Cas. Co., 363 F. App'x 982 (4th Cir. Feb. 12, 2010) and No. 1:08-cv-301 (LMB/JFA), 2009 WL 577597 (E.D. Va. Mar. 3, 2009): prevailed at a bench trial in the Eastern District of Virginia obtaining a decision that an insurer was entitled to rescind three crime insurance policies, and obtained an affirmance by the U.S. Court of Appeals for the Fourth Circuit.
- Continental Cas. Co. v. Orr, No. 807CV292, 2008 WL 2704236 (D. Neb. Jul. 3, 2008): obtained a determination on summary judgment that multiple claims against an insured law firm were "related" under the lawyers professional liability policy and so subject to a single claim limit each of liability rather than the aggregate limit.
- Carolina Cas. Ins. Co. v. Draper & Goldberg, PLLC, 138 F. App'x 542 (4th Cir. 2005): retained to represent insurer on appeal, following an adverse district court decision, obtaining reversal directing trial court to enter judgment that the insurer was entitled to rescind a lawyers professional liability policy.
Richard A. Simpson
202.719.7314 | email@example.com
ISSUE: APRIL 2015
IN THIS ISSUE
- Borrowing Funds from Client Does Not Constitute Professional Services and Profit Exclusion Bars Coverage for Accountant's Failure to Repay Client
- Delaware Trial Court: "Final Adjudication" Exclusion Trumps "No Loss" Argument
- Contract-Related Breach and Negligence Damages Constitute "Loss;" Coverage Precluded by Warranty Exclusion
- Eleventh Circuit Holds No Coverage for Online Banking Theft
- Civil Theft Award Not Covered by D&O Policy or CGL Policy
- Duty to Defend Does Not Encompass Affirmative Claims
- No Coverage for Prosecuting an Affirmative Counterclaim
- Lawyer's "Don't Ask" Policy on Associate Misconduct Leads Court to Apply Prior Knowledge Exclusion
- Finding of Fraud for ERISA Violation Implicates Fraud Exclusion
- Speeches/Upcoming Events
Delaware Trial Court: "Final Adjudication" Exclusion Trumps "No Loss" Argument
By John E. Howell
March 27, 2015 | Wiley Rein LLP Executive Summary Blog
Lawyer's "Don't Ask" Policy on Associate Misconduct Leads Court to Apply Prior Knowledge Exclusion
By John E. Howell
March 10, 2015 | Wiley Rein LLP Executive Summary Blog
FDIC’s Suit Against Law Firm for Acceptance of Advanced Retainer Not Covered
By Jessica M. Cunningham*
January 20, 2015 | Executive Summary Blog