The Court of Appeals of Minnesota has held that a lawyers professional liability policy does not afford coverage for a claim based on alleged acts of malpractice that occurred prior to the retroactive date. Gemelli v. Haugen, 2015 WL 2457005 (Minn. Ct. App. May 26, 2015).
Following a trial that took place in April and May of 2008, a criminal defendant was convicted and sentenced to prison on assault charges. After being incarcerated for 17 months, the defendant was retried and acquitted. The defendant subsequently sued his attorneys for legal malpractice and vicarious liability based on their alleged acts and omissions during the first trial. The attorneys’ professional liability insurer denied defense and indemnity coverage for the lawsuit because all of the alleged conduct occurred prior to the policy’s retroactive date of December 5, 2008. The attorneys and the defendant eventually entered into a stipulated settlement, agreeing that the amount of the judgment could be recovered only against the insurer. The defendant then brought suit against the insurer, and the trial court granted summary judgment in favor of the insurer based on the policy’s retroactive date.
On appeal, the Court of Appeals of Minnesota affirmed. The court concluded that, as a condition precedent to coverage, the policy unambiguously required the insured to have committed an “act, error, or omission” after the retroactive date of December 5, 2008. The court further observed that the purportedly tortious acts and omissions by the insured attorneys—both as alleged in the complaint and as described in the settlement agreement—all involved breaches of the standard of care during the defendant’s first trial that ended in May 2008. The court rejected the defendant’s argument that his incarceration (which extended well past the policy’s retroactive date) triggered the policy’s coverage for “personal injury” claims. The court held that the policy plainly covered claims for “personal injury” only if such claims arose from an act, error, or omission that occurred after the retroactive date. According to the court, all of the alleged acts that purportedly resulted in the defendant’s incarceration occurred in May 2008 or earlier.