Appellant Denis M. Field challenged a final summary judgment in favor of dozens of insurers (appellants) in his lawsuit to reclaim defense costs he incurred in a criminal trial in which he was acquitted. The trial court held that the costs for which he claimed compensation were not incurred in connection with a "claim", as defined in the policy, during the insurance period Denis M. Field v. Certain Underwriters At Lloyd & # 39; s et al, No. 4D19-2429, Florida Fourth District Court of Appeal (September 16, 2020)
The appellant was a partner and CEO of a global accounting firm, BDO Seidman, LLP., Until his resignation from the company in 2003. In the years 2000 until the end of 2003, BDO, the complainant and others came under state investigation for tax services which the IRS considered to be infringing tax havens. In 2009, the complainant and others were charged in criminal proceedings in connection with the tax services they provided. The appellant was finally acquitted of all charges in 201
During the years 2000-2017, BDO and its partners were insured under the "tower" of Lloyd & # 39 ;s of London Primary and Surplus Insurance. Each insurance was written for a single year of coverage. In May 2003, BDO sent a statement of circumstances to Lloyd's representative. The announcement arose from the tax protection services that BDO had provided to its high value tax clients. The IRS considered these protections to be infringing tax protections, and they were under IRS scrutiny. The announcement triggered coverage for the policy year 2002-2003. At the time of the complainant's criminal charges, the insurers had paid their limits in 2002-03 according to the policy.
In 2017, the appellant made a claim against the accused, the insurance companies 2017–2018, and claimed compensation for defense costs in criminal proceedings 2009–2013, which claim was rejected. In his complaint, the complainant claimed coverage for his defense costs under the 2017-18 policy. Among their several arguments, they claimed that no claim, as defined in the policy, was made during the insurance period. The trial court held that the clear language of the policy did not allow recovery of the appellant's defense costs for his criminal prosecution which had ceased more than four years earlier. The trial court ruled in favor of the insurer.
RULES FOR INSURANCE INTERPRETATION
Insurance contracts are interpreted according to their clear meaning, with all ambiguities interpreted towards the insurer and for coverage. When the language of an insurance policy is clear and unambiguous, a court must interpret the insurance policy in the simple sense required to carry out the insurance policy as it is written. Insurance contracts must be examined as a whole, see all the words in their context.
The important provisions of the employee's policy for processing the complainant's claims include the operative clause and the definitions of "claim" and "defense costs". The "operative clause" in the insurance provides: "Subject to all others provisions of this insurance, the insurer will reimburse the insured against: "(1) loss arising from a claim first made against the insurance during the insurance period; (2) defense costs; (3) regulatory loss; (4) regulatory defense costs."  A "statement" in the policy is defined as: "a written claim for monetary or non-monetary relief, which may include civil or binding arbitration, against the insured. Due to an incorrect law [.]"
The The first page of the policy states: "THIS IS AN INSURANCE POLICY THAT APPLIES ONLY TO THE APPLICABLE FIRST PROCEDURES DURING THE POLICY PERIOD." The insurance period stated to be from 1 June 2017 to 1 June 2018.
As concluded by the Court, the policy requires a requirement to be a written request for monetary relief against the insured as a result of an incorrect action. The wrongful act in this case constituted the professional advice of the complainant with regard to the tax protection services, which was the origin of the criminal prosecution. The operative clause allows for damages under the policy for losses from receivables and defense costs. The definition of defense costs clearly requires that these costs be incurred with respect to a claim.
For the purpose of the proposal, the Court accepted the appellant's claim that the criminal prosecution could constitute a claim for non-monetary relief. But that "statement" was not made within the policy period 2017-18. The criminal prosecution was initiated in 2009. If the claim was not made within the insurance period, there could be no compensation for defense costs that must be associated with a claim.
The term insurance claim is used in "Terms" "In the policy. In these provisions, notice to the accused is a condition of the policy. That provision states, “For the purposes of this policy, the date of such a requirement. . . made against the insured during the insurance period is the date on which the resulting insurance claim must be attached to this insurance. “Since the claim for damages was not made during the insurance period, there was no policy claim for liability for this policy.
In a thorough and well-reasoned opinion, the Court held that the costs of claiming compensation were not made in connection with a "claim", as defined in the policy, during the insurance period and the Board of Appeal agreed and upheld the judgment in favor of the insurers.
Claims made policy, as those involved in this case, they are seriously limited to claims made during the time of insurance. Since the claim was made in 2009 when the criminal prosecution was initiated or in 2003 when the insured first reported the investigation from the Ministry of Justice, it was also not under the insurance policies' insurance policy that Field sued whose insurance did not take effect until 2017. A claim is not made when the insured seeks money from his insurance company but when someone makes a claim against the insured.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice of serving as an insurance consultant specializing in insurance coverage, insurance claims handling, infidelity and insurance fraud almost equally for insurance policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and email@example.com.
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