The opinion of the court was delivered by: Charles J. Siragusa, United States District Judge.
Both Adams and Chicago have moved for summary judgment pursuant to
Rule 56 of the Federal Rules of Civil Procedure. Adams seeks an order that
Chicago is required to defend and indemnify him under the terms of his
professional liability insurance contract and Chicago seeks an order
dismissing the complaint, alleging that Adams failed to meet a
prerequisite, thus, Chicago properly disclaimed coverage. For the reasons
that follow, the Court denies Chicago's motion and grants Adams'
application, holding that Chicago is estopped from declining its duty to
defend and indemnify.
The following facts are undisputed. On or about September 11, 1997,
Chicago issued a lawyers professional liability policy, number
LWB-3008198-1 ("policy"), effective for claims made during the period
from December 12, 1997 to December 12, 1999. Section I of that policy,
entitled "Coverage," states in pertinent part (emphasis in original),
The Company shall have the right and duty to defend
any suit against the Insured seeking Damages to which
this insurance applies even if any of the allegations
of the suit are groundless, false or fraudulent. The
Company, at its option, shall select and assign
defense counsel. . . . The Company shall also have the
right to investigate any Claim and/or negotiate the
settlement thereof, as it deems expedient . . . .
Paragraph B of Section IX of that policy, entitled "Conditions,"
contains the following pertinent provisions:
B. Assistance and Cooperation of Insured in the Event
of Claim or Suit:
Upon the Insured becoming aware of any negligent
act, error, omission or Personal Injury in the
rendering of or failure to render Professional
Services which could reasonably be expected to be
the basis of a Claim covered hereby, written notice
shall be given by the Insured, or its
representative to the Company together with the
fullest information obtainable. If Claim is made or
suit is brought against the Insured, the Insured or
its representative shall immediately forward to the
Company every demand, notice, summons or other
process received by the Insured or the Insured's
Professional Liability Ins. Policy No. LWB-3008198-1 at 6 (attached as
Exhibit A to Copoloff aff.) (emphasis in original). This provision
creates two notification duties on the insured. One is to notify Chicago
of a potential claim, and the second is to notify Chicago of an actual
claim and forward the papers "immediately." The contract does not
explicitly state a time requirement regarding the potential claim
The policy has a definitions section and the word "Claim" is defined as:
Professional Liability Ins. Policy No. LWB-3008198-1 at 4 (attached as
Exhibit A to Copoloff aff.) (emphasis in original).
On September 24, 1993, Patricia Novak ("Novak") was injured in a motor
vehicle collision in Rochester, New York. The collision was allegedly
caused by the negligence of Carolyn Calcagno ("Calcagno"). On or about
March 10, 1994, Novak retained Adams to represent her with regard to a
workers compensation claim related to the collision. Adams made a
notation on his file of the statute of limitations time for a third-party
personal injury claim on behalf of Novak against Calcagno. Adams
corresponded with Calcagno and her insurance carrier on Novak's behalf,
and advised Calcagno that he represented Novak in connection with a claim
for damages resulting from the motor vehicle collision. All ...