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A law firm did not mislead a professional liability insurer by failing to provide supplemental information about a malpractice claim against it, a New York federal judge has determined. The Philadelphia Indemnity Insurance Co. had sought a declaratory judgment that its policy covering lawyers with Horowitz, Greener & Stengel was void as a matter of law because the lawyers allegedly failed to submit supplemental information on a claim against their firm as required by the application. But in Philadelphia Indemnity Insurance Co. v. Horowitz, Greener & Stengel, 03 Civ. 5510, Southern District of New York Judge John Koeltl said the insurer’s failure to insist on the additional information requested in question 6(b) of its application was fatal to its request for declaratory judgment on the issue. “[T]he omission of the supplemental forms required that [Philadelphia Indemnity] request any additional information elaborating on an affirmative answer to 6(b),” the judge wrote in granting part of the summary judgment motion of Horowitz Greener. “The issuance of the insurance policy without any further inquiry into the affirmative answer provided to 6(b) estops [Philadelphia Indemnity] from claiming that the policy is void because it did not receive the supplemental forms.” The dispute arose over Horowitz Greener’s 2002 renewal of its insurance from Philadelphia Indemnity. Question 6(a) of the renewal application asked if any disciplinary actions had been filed against the lawyers of the firm. The firm replied affirmatively that lawyer Barry Horowitz had been the subject of a disciplinary complaint by a former client, Victoria Kremin, with a hearing to be held in July 2002. Question 6(b) inquired about legal claims against the firm. At the time, Horowitz had been discharged by another client, Daniel Unger, whose case had been dismissed for failing to respond to discovery requests. The Horowitz Greener lawyers did provide supplemental information on the Unger matter but did so on forms bearing the logo of Liberty Mutual, another insurer to whom they were also applying for a policy. The broker, which was handling both policies, submitted the supplemental information to Liberty Mutual and not Philadelphia Indemnity. Philadelphia Indemnity argued that the lack of submissions on the Unger case was more misleading because of the firm’s affirmative answer to 6(a). The insurer claimed the answers were written in a manner suggesting they referred to the same matter, rather than two different ones. But Judge Koeltl said it was clear the two questions sought different information. He also noted that even if the answers had referred to the same matter, the application still requires supplemental information to answer 6(b). The judge also granted summary judgment to Horowitz Greener on Philadelphia Indemnity’s claim seeking to void its 2001 policy as well, finding that policy contained no duty to disclose potential claims. However, Koeltl declined the defendants’ summary judgment motion on Philadelphia Indemnity’s claims that the Unger case falls under policy exclusions barring coverage of the lawyers’ “wrongful acts.” The insurer claims Horowitz’s actions in the Unger case, in which he allegedly failed to inform his client of the case’s dismissal, made a malpractice claims foreseeable. The judge said such arguments raised material issues of fact and could not be decided on summary judgment. He dismissed the insurance broker, Lustgarten Associates, from the case. The law firm had sought to bring the broker in as a third-party defendant on the grounds that it was responsible for the failure to provide the supplemental information forms to Philadelphia Indemnity. But the judge said the lawyers were responsible for their own application and had shown no special relationship establishing a duty on the broker’s part to ensure the application was complete and accurate. Philadelphia Indemnity was represented by Paul Svensson of Boegmann, George, Hodges & Corde. Horowitz Greener was represented by Adam Stengel. Lustgarten Associates was represented by Stephen Cunningham of Lustig & Brown.

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