Verdicts

New York's Appellate Division has held that a trial court erred in granting summary judgment to an insurer that claimed it was not required to defend or indemnify a law firm in an underlying legal malpractice action that stemmed from an inoculation injury claim. Liberty Insurance Underwriters Inc. v. Corpina Piergrossi Overzat & Klar LLP, — N.Y.S.2d —-, 2010 WL 4825892 (N.Y.A.D. 1 Dept.), 2010 N.Y. Slip Op. 08790.

The law firm was accused by a former client of legal malpractice for failure to timely file a claim concerning his vaccine-related injuries in accordance with the rules of the federal National Vaccine Injury Compensation Program, 42 USC ” 300aa-10 et seq. (the NVICP). The attorneys had taken on the client's medical malpractice case in connection with his 1999 vaccine-related injuries, but failed to make a NVICP claim on his behalf within the three-year deadline for doing so. This failure proved catastrophic, as it foreclosed the injured claimant's chance for compensation under the NVICP and barred any civil actions for damages, including a medical malpractice action. The law firm sought defense and indemnification from its insurer. The insurer replied that it was not obligated to defend or indemnify the attorneys because, prior to the effective date of the first legal malpractice policy issued by the insurer to the attorneys in July 2004, the attorneys had a reasonable basis to foresee that this former client would make a claim against them; coverage for such known claims was excluded under the policy's “Known Claims or Circumstances” clause. In relevant part, the clause excluded coverage for “any claim arising out of a wrongful act occurring prior to the policy period if … you had a reasonable basis to believe that you had breached a professional duty, committed a wrongful act, violated a Disciplinary Rule, engaged in professional misconduct, or to foresee that a claim would be made against you.” Based on this contract language, Supreme Court, New York County (Charles E. Ramos, J.), granted the insurer's motion for summary judgment, declaring that it was not obligated to defend or indemnify the attorneys.