• Reifer v. Westport Ins. Co.
  • January 6, 2016 | Author: Eric B. Horst
  • Law Firm: Thomas, Thomas & Hafer LLP - Philadelphia Office
  • Pennsylvania Superior Court

    No. 321 MDA 2015

    Decided: November 20, 2015

    Dismissal of action against attorney’s professional liability insurance carrier upheld based on unambiguous language of the “claims-made” policy

    Background


    The underlying case arose from Plaintiff Rox-Ann Reifer’s suit against Attorney Donald Russo for legal malpractice filed on December 29, 2008. Russo reported the suit to his professional liability insurance carrier, Westport Insurance Company. However, his policy had expired on August 15, 2008. Under the terms of Russo’s “claims-made” liability policy, Westport was obligated to pay as a result of all claims first made during the policy period and reported to Westport in writing during the policy period or within sixty days thereafter.

    On February 11, 2011, Russo settled with Plaintiff, admitted liability, left it to a jury to decide damages and assigned his rights under the policy to Plaintiff. A jury awarded over $4 million dollars against Russo. On March 1, 2012, Plaintiff filed a declaratory judgment action against Westport. Westport filed Preliminary Objections seeking dismissal due to legal insufficiency, because Russo did not report the claim during the policy period or within sixty days thereafter. On January 20, 2015, the Trial Court sustained Westport’s Preliminary Objections and dismissed Plaintiff’s complaint. Plaintiff appealed.

    Holding

    The Superior Court upheld the Trial Court’s decision on the basis of the policy’s clear and unambiguous language. The Court rejected Plaintiff’s argument that the “claims-made” policy contravenes Rule of Professional Conduct 1.4(c). The Court also rejected Plaintiff’s argument that the notice-prejudice requirements should be applied in a “claims-made” policy as they are in an occurrence policy. Finally, the Court rejected Plaintiff’s argument that the Trial Court’s decision should be reversed on public policy grounds because there is no clearly expressed public policy against the enforcement of “claims-made” policies.