PrintThe U.S. District Court for the District of New Jersey granted summary judgment in favor of a professional liability insurer in an action brought by its law firm insured seeking coverage of a damage award secured by a former client in a malpractice action brought against a firm partner. The partner failed to provide timely notice to the insurer of the underlying claim, resulting in prejudice to the insurer.
In 1997, Yvonne Braime retained Frederick Popovitch of Popovitch & Popovitch L.L.C. (P&P), a law firm, to represent her in a potential medical malpractice action against Dr. Toufic Boucherit. Braime alleged that Boucherit while administering an epidural injection may have punctured one of her kidneys. Popovitch filed an action against Boucherit and other defendants, but failed to timely serve answers to interrogatories, resulting in the dismissal of the action with prejudice.
Braime retained a separate attorney to pursue a malpractice action against Popovitch, and an action was filed on Apr. 30, 2004. On Apr. 20, 2007, following a lengthy procedural history, a trial court issued a judgment in Braime's favor and ordered damages in the amount of $275,000, plus attorneys' fees. P&P during the relevant period maintained professional liability insurance with Evanston Insurance Co. Popovitch provided no notice of the underlying action to Evanston prior to the Apr. 20, 2007, judgment.
P&P sued Evanston seeking a declaration of coverage for the underlying judgment and contending that notice of the Braime action would have been futile because Evanston in a January 2002 letter asserted that based on a "prior occurrences" exclusion it would not provide coverage for any action arising out of the Braime representation. Evanston contended that P&P failed to provide timely notice and contended in the alternative that the underlying claim fell outside the policy coverage. Both parties moved for summary judgment.
Contention notice would have been futile rejected.The district court concluded that P&P failed to timely notify Evanston of the Apr. 30, 2004, action against Popovitch. Moreover, the 2002 letter relied on by P&P to support its argument that notice would have been futile clearly stated that Evanston did not bar future consideration of a "claim" as defined by the policy, for damages filed by Braime but instead clearly invited P&P to provide further information as it became available.
As a result of Popovitch's failure to inform Evanston of Braime's Apr. 30, 2004 filing, Evanston was prejudiced and unable to evaluate whether the policy required it to provide coverage. Accordingly Evanston's motion for summary judgment was granted.
Counsel for P&P : Fred Joel Klein, 732-636-0700, Woodbridge, N.J.
Counsel for Evanston : Aileen F. Droughton, Traub Eglin Lieberman & Straus L.L.P., 732-985-1000, Edison, N.J.
Source: Insurance Law and Litigation Week, 09/14/2009
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