Legal Malpractice Policy Does Not Cover Late Claim

 

DAYTON, March 24 — An Ohio federal judge has granted a legal malpractice carrier’s motion for judgment on the pleadings, finding that the claim was not submitted timely under the insured’s claims made policy.

In 2011 David and Cynthia McCartys sued attorney Miguel Pedraza for legal malpractice relating to representation in business litigation, which led to a $275,825.29 final judgment against Pedraza.

 

Pedraza’s insurer,  National Union, moved for judgment on the pleadings, arguing that McCarty’s claim against Pedraza was not originally reported by their insured to National Union during the policy period .  Judge Thomas M. Rose agreed, relying on policy language, and rejecting the malpractice plaintiff’s argument that the filing of their suit on the docket was sufficient to constitute constructive notice to National Union:

“The Insuring Agreement’s language is clear and unambiguous. In order for there to be coverage for a claim, the claim must be made during the Policy Period and reported to National Union pursuant to the policy’s notice provisions. The notice provisions state that written notice of a claim must be given to National Union “as soon as practicable,” but “no later” than either 60 days after the end of the Policy Period or the end of any applicable Extended Reporting Period. Sixty days after the end of the Policy Period was 60 days after February 21, 2011, or April 22, 2011. National Union asserts that there is no applicable Extended Reporting Period, and the McCartys do not dispute that assertion. Thus, in order for the claim against Pedraza’s policy to be covered, it must have been reported, in writing, to National Union by no later than April 22, 2011. In sum, National Union’s interpretation of the policy is correct.”

“[T]he McCartys argue that National Union had an obligation to continuously review the dockets of Ohio courts to determine if there were any claims against Pedraza. The McCartys do not cite to any provision of Pedraza’s policy that imposes such an obligation on National Union. To the contrary, the policy unambiguously states that notice of a claim ‘shall be given in writing to the addressee and at the address identified in Item 7 of the Declarations.’ Requiring that written notice be sent to National Union at its address is inconsistent with an interpretation of the policy that would require National Union to search for claims against its insured. The Court rejects the McCartys’ argument that National Union had actual and constructive notice of their legal malpractice action merely by virtue of its filing in a publicly available docket.”

David C. McCarty, et al. v. National Union Fire Insurance Company of Pittsburgh, PA, et al., No. 15-247, S.D. Ohio; 2016 U.S. Dist. LEXIS 39526).

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Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than a quarter of a century, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800.

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