A Chubb Ltd. unit does not have to reimburse a law firm for costs related to a federal search and seizure warrant because there was no claim, a federal appeals court said Thursday, upholding a lower court ruling.
In 2014, the government began investigating attorney Kenneth Ravenell in connection with a federal racketeering case and he hired Baltimore law firm Brown Goldstein Levy LLP to represent him, according to the ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in Brown Goldstein Levy LLP; Joshua Treem v. Federal Insurance Co.
In January 2019, the government sent Brown Goldstein partner Joshua Treem a letter telling him that he was the subject of the investigation and that there were several conflicts of interest that prevented him from continuing to represent Mr. Ravenel.
On receiving the letter, Mr. Treem hired counsel to represent him, and the law firm obtained ethics counsel.
In June 2019, the government executed a search warrant at the law firm’s office and seized thousands of documents, including all Mr. Treem’s emails.
It later sent to Mr. Treem wrote another letter, stating that his representation of his client presented a possible conflict of interest with his personal interests because his client was cooperating with the government.
The law firm sought coverage from Chubb Ltd. unit Federal for the losses incurred in the search warrant litigation and the defense costs associated with defending Mr. Treem in connection with the criminal investigation, claiming it had incurred more than $230,000 in defense costs.
When Federal refused to provide coverage, the law firm sued the insurer in US District Court in Baltimore. The court granted the insurance company’s request to dismiss the case.
There is no coverage for either claim, a three-judge appeals court panel ruled, affirming the lower court. “The decision itself is not a ‘claim’ because it is not a written demand or request,” the ruling said.