A federal appeal court has confirmed a lower court of law and held a Liberty Mutual Insurance Co. unit to contribute at least half of a risk conservation group's defense costs in legal malpractice.
J. Wayne Allen, a lawyer working for Berger Kahn LLC and Los Angeles-based Buchalter Nemer APLC, was named in a provisional petition and in a related civil action, according to Friday's 9th US Circuit Court of Appeal judgment in San Francisco in Liberty Surplus Insurance, Inc., Liberty Surplus Insurance Corp.
Liberty Surplus Insurance, a Liberty Mutual Unit, had provided professional liability insurance to Irvine, California-based Berger Kahn LLC through two guidelines from July 2009 through July 201
AIRMRRG, a Hawaii-domiciled risk retention group operating out of Burlington, Vermont, assured Buchalter Nemer in a policy of July 2009 to July 2010 with $ 1 million in liability limits.
American International Group Inc. entity Lexington Insurance Co., which is not a party to the disputes, was the leading insurer of the law firm's over-coverage, which was administered by AIMRRG, along with other over-insurers, according to court records.
AIMRRG agreed to defend Allen in the trial. In June 2015, the Risk Management Group filed against Liberty Surplus in the US District Court in Pasadena, California. Having loaded Liberty Surplus refused to contribute to Allen's defense.
The Court of Appeal decided on the risk-keeping group Liberty Mutual must pay "at least half" the legal fees for the risk-keeping group to defend Allen, as well as interest and costs associated with the suit.
This was confirmed by a unanimous three judge panel of the 9th circuit. Liberty's argument involves interpreting one of the defined terms of the "policy period" in its 2010-2011 policy, the panel said.
Liberty claimed that a policy provision limited its liability for multiple related claims to claims that were the first time during the policy period.
Because of this, "Liberty says it has no obligation to defend Allen against the civil action because he failed to report the related evidence requirement under the 2009-2010 policy".
"As the Court correctly pointed out," taking Libert's interpretation would require the Court to give different meanings in the same way as used in the same policy that would be contrary to the rules of interpretation of contracts ", said the panel
" Although Liberty's chosen definition of " Policy Period "can create ambiguity within the meaning of the several related liability rules as a whole, the district court did not allow the ambiguities in the insurance policy to be solved against the insurer," said the panel to confirm the right of court.
The spokespersons of insurance companies could not immediately reached for comments.
In 2016, a federal appeal court instituted a lower court that a OneBeacon Insurance Group Ltd. entity was required to pay $ 28 million to refuse to provide coverage to a law firm in a legally wrong case. 19659002]