An automobile accident occurred and, as a result, the appellee suffered serious injuries. He was taken to a Medical Center where he was evaluated by several physicians, including a surgeon, an orthopedist, and a radiologist. However, these physicians misinterpreted appellee’s x-rays and radiological studies, and negligently concluded that he did not suffer a recent spinal injury, specifically a spinal column injury. Consequently, the attending Bronx surgeon and assistant encouraged appellee to attempt to walk approximately a week after the automobile accident. When he arose from the bed, appellee felt a shock and collapsed. He was then transferred to another Medical Center, a Regional Medical Center (second Medical Center), where he underwent surgery on his spine, but the surgery was not successful in reversing the spinal column damage, the spinal injury. The appellee then retained a lawyer of a certain law firm to investigate and initiate a legal malpractice action against the various physicians. The lawyer considered joining the physicians individually in the malpractice suit but, for various reasons, he decided not to join. He sent an “intent to sue” only to the two Medical Centers and its physicians. However, when the complaint was filed, the first Medical Center was not named. Thereafter, during discovery, the lawyer realized that the second Medical Center’s defense was based upon the comparative fault of the first Medical Center and its physicians. At this point, the statute of limitations had already expired, and the lawyer realized the potential of a legal malpractice claim for failing to join them. Thus, the lawyer then contacted his insurance company and referred the appellee to a new counsel.
The appellee and the second Medical Center, and its physicians, entered into a settlement agreement in the amount of $1,000,000, and then brought a legal malpractice action against the lawyer and his firm, which the Westchester Insurance Company agreed to settle for the policy limits. However, the parties disputed whether the “per claim” amount applied or whether the “aggregate” amount applied. Specifically, the parties disputed whether the attorney’s failure to name the first Medical Center and each individual physician constituted independent wrongful acts or a single claim. So, the appellee filed a declaratory judgment action to determine the issue. He claimed that the policy provided $250,000 per wrongful act with a $500,000 aggregate for multiple wrongful acts. Because the lawyer committed multiple wrongful acts, the appellee claimed that he was entitled to the aggregate limits. The Insurance Company argued that the policy was a claims-made policy and that the policy provided $250,000 per claim rather than per wrongful act; that, since there was only one claim, the appellee was entitled to only $250,000 in coverage. The trial court agreed with the appellee and, on motion for summary judgment, entered a judgment in favor of the appellee for the aggregate limits. Based upon its interpretation of the policy, the trial court found that there were several acts of malpractice during the legal representation of appellees. Thus, the trial ruled that the appellees were entitled to the aggregate policy limits. The Insurance Company now appeals the said judgment.
The issues for the court’s determination is whether or not, pursuant to the insurance policy of the law firm the aggregate policy limit should apply where the appellee’s attorney committed multiple wrongful acts by failing to join several defendants in his medical malpractice action; whether or not, because each of the defendants had separate insurance coverage available to pay a damage award, appellee had multiple claims against his attorney.
The insurance company argues that appellee has only a single claim because he suffered one injury, that is, he did not receive his full recovery because the attorney failed to join all the proper defendants before the statute of limitations tolled; that even if the failure to sue each defendant is considered a wrongful act, these wrongful acts are related to the appellee’s sole malpractice claim against his attorney.
The appeal arises from a dispute regarding the policy limits of a legal malpractice insurance policy. The insurance policy in dispute is a “claims-made” policy which covers claims made against the insured during the policy period. The policy specifically provides that the insurance company shall pay on behalf of an insured all sums an insured must legally pay as damages because of a wrongful act that results in a claim first made against an insured and which is reported to the insurance company in writing during the policy period; that a claim means a demand received by the insurance company or an insured for money or services; and that a wrongful act means any negligent act, error or omission arising out of professional services rendered or that should have been rendered by an insured. Under the conditions of the policy, the maximum amount that the insurance company will pay for each claim is the limit shown in the declarations as “per claim” for all claims and claims expenses arising out of or in connection with the same or related wrongful act; that this limit applies regardless of the number of persons that are insured under the policy or the number of claimants; that the aggregate, subject to the aforementioned condition, maximum amount that the insurance company will pay for all claims and claims expenses will not exceed the limit shown in the declarations as aggregate; and that all wrongful acts for which claims, or incidents which will later become claims, reported during the policy period are included.
As a rule, the construction and interpretation of an insurance policy is a question of law for the court. Such contracts are read in accordance with the plain language of the policy, and any ambiguities are liberally construed in favor of the insured and strictly against the insurer as the drafter of the policy. A policy is ambiguous where it is susceptible to two or more reasonable interpretations. However, a policy is not ambiguous merely because it is complex and requires analysis to interpret it.
Here, the court finds that the Insurance Company’s interpretation of the policy is consistent with the policy language. A claim under the policy is a demand against the insured for money. Notably, there was but one demand for money, namely the lost recovery because of the failure to join various other defendants and thus one claim. Even if the appellee had multiple claims against his attorney, the “per claim” limit still applies where the claims arise out of the same or related wrongful acts.
The California Supreme Court has already ruled in one case that, when a single client seeks to recover from a single attorney alleged damages based on a single debt collection matter for which the attorney was retained, there can only be a single claim under the attorney’s professional liability insurance policy. Applying that rationale to the case at bar, the appellee retained an attorney to recover damages he incurred as a result of several physicians’ negligent conduct, but was unable to recover the full extent of his damages because of the attorney’s failure to include all the responsible defendants in his action. While the attorney’s negligent omission may be considered multiple wrongful acts, the appellee suffered only one injury, that is, an award that does not represent the full extent of his damages.
In sum, the alleged wrongful acts of the attorney were related and resulted in a single claim. While there were several wrongful acts, they were all related and constituted but one claim of legal malpractice under the policy language. Thus, the court finds that the judgment appealed from must be reversed and remanded for an entry of a declaratory judgment determining that the policy limit “per claim”, and not the aggregate limit, applies.
Claims against all parties liable must be made within the period fixed by law, otherwise it is barred. It is vital that these periods are complied with or you risk losing the right to claim for damages. Thus, it is equally important that you hire legal counsels who possess the competence, knowledge and skill to do what is expected. At Stephen Bilkis & Associates, you won’t be disappointed. We have the best and the most competent lawyers in the country. Contact us now and consult with our NY Automobile Accident Attorneys, NY Spinal Injury Attorneys, and the like, free of charge.