Gargano v. Liberty Int’l Underwriters, Inc.
(1st Cir. (Mass.) July 14, 2009)
An attorney sued the policyholder, also an attorney, after the policyholder failed to pay an attorney’s lien for work the plaintiff attorney completed on a case ultimately transferred and settled by the policyholder. The plaintiff attorney filed suit in March 2005 and entered judgment against the policyholder in July 2007. After judgment was entered, the policyholder reported the claim to his three professional liability insurers, which had issued three consecutive “claims-made-and-reported” policies from September 1, 2004 through September 1, 2007. The First Circuit held that the insurers were not obligated to defend or indemnify the policyholder for the underlying action because he failed to report the claim during the policy period in which it was made. The First Circuit also rejected the policyholder’s assertion that the insurers must demonstrate prejudice to escape liability.
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By Carrie P. Appler