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RULING AGAINST LIABILITY INSURER IN SAN DIEGO MAY AFFECT POLICIES Unhappy with your professional liability insurance? You might be interested in a recent Southern California ruling, then. San Diego attorney Kenneth Sigelman sued his insurance provider, Lawyers’ Mutual Insurance Co., to prevent it from making him reimburse up to $1.2 million in settlement and defense costs paid out on his behalf over the last few years. Last week, Sigelman’s lawyer, Guy Kornblum, won a ruling in San Diego that he said will inevitably force Lawyers’ Mutual to revise a standard contract used by many California lawyers. “They’ve been using the same policy for 20 years,” said Kornblum, who heads San Francisco’s Guy Kornblum & Associates. Sigelman’s case was over a claims-made policy, a type that generally covers claims made against a policyholder during a given period of time � no matter when the trigger incident occurred. On Jan. 31, a San Diego County Superior Court judge ruled that part of Sigelman’s claims-made policy is ambiguous because the fine print lays out exclusions that suggest the agreement is of a different nature altogether, one that only covers incidents that occurred while the contract was in effect. That type of agreement would be known as an occurrence policy. The San Diego court found that the disputed insurance policy “is not sufficiently conspicuous, plain and clear to be enforceable,” according to a court transcript (.pdf). Defense lawyer Kenneth Katel, a Los Angeles partner at Musick, Peeler & Garrett, said it’s too early to say how Lawyers’ Mutual will change its insurance policy � if at all � or if the company will appeal. But even if other lawyers don’t benefit, it was a much-needed break for Sigelman, who was sued twice for malpractice in recent years. One of Sigelman’s insurance claims arose from a situation a trial court judge aptly described as a “horror story,” according to the First District Court of Appeal’s published decision in Duran v. St. Luke’s Hospital, 114 Cal.App.4th 457. Sigelman was sued by a client because he failed to file a complaint before the statute of limitations ran out for medical malpractice that allegedly caused the death of an infant child. In fact, Sigelman sent in the complaint, according to Duran. But because he underpaid the filing fee by $3, the case was never properly filed and was later dismissed by a San Francisco Superior Court judge.

Matthew Hirsch

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