The Missouri Court of Appeals, Eastern District, found the word “related” in a professional liability insurance policy’s limits of liability provision is unambiguous and a reasonable attorney would understand multiple acts of negligence in the course of representing clients in their personal injury claims arising from a single motor vehicle accident are “a series of related acts or omissions.” Accordingly, the Court of Appeals held demands by the attorney’s former clients constitute a single claim under the policy. Further, because limits of liability are not waivable and do not preclude defenses to coverage as a matter of law, the insurer was not estopped from asserting the policy’s limits of liability when it informed the attorney it considered the malpractice claims to be a single claim under the policy. And because of the attorney’s execution of an agreement pursuant to R.S.Mo. § 537.065 with his former clients was without the insurer’s consent, the attorney violated the policy’s cooperation clause and prevented the insurer from controlling the litigation, such that the insurer was not bound by the underlying judgment and was entitled to summary judgment in the resulting equitable garnishment action.
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Shareholders Kenneth Goleaner and Katrina Smeltzer Discuss Complicated Insurance Coverage Questions in the Latest Issue of DRI’s “The Voice”
Shareholders Kenneth Goleaner and Katrina Smeltzer discuss complicated insurance coverage questions in the latest issue of DRI's "The Voice."
Fifth Circuit Finds Bad Faith Is Not Required For Liability Under The Texas Prompt Payment of Claims Act
Insureds are not required to prove insurers acted in bad faith in denying a claim to be entitled to the amount of the attorneys’ fees and statutory interest under the Texas Prompt Payment of Claims Act (“TPPCA”). Rather, insureds need only demonstrate liability under the policy and the insurer’s failure to comply with the timing requirements of the TPPCA.