The Missouri Court of Appeals, applying Missouri law, has held that multiple acts of negligence committed by a lawyer while representing a married couple in a lawsuit are related acts or omissions constituting a single claim under the law office’s professional liability policy, and thus were subject to a single limit of liability. Stacy v. Bar Plan Mut. Ins. Co., 2021 WL 243515 (Mo. Ct. App. Jan. 26, 2021). The court also held that the insurer was not estopped from asserting the limits of liability when it failed to send reservation of rights or denial of coverage letters relating to its single-claim position.
The couple filed a malpractice action against the insured lawyer, alleging multiple acts of negligence in the course of his representation in their personal injury lawsuit and asserting two separate demands. The insurer agreed to defend subject to a reservation of rights, but did not specifically state that the couple’s separate demands constituted a single claim. Subsequently, the trial court entered judgment in favor of the couple, and they filed an action to collect the judgment from the insurer. The couple moved for summary judgment, which the trial court granted. The insurer appealed.
The appellate court reversed. First, the court concluded that the couple’s allegations in the underlying lawsuit constituted a single claim for purposes of determining the applicable limits of liability because they arose from “a series of related acts or omissions” comprising the lawyer’s malpractice. The court noted that the policy expressly provided that “two or more demands arising out of a series of related acts or omissions shall be treated as a single claim,” and “the demand for money or services by more than one person . . . shall not operate to increase liability.” The court opined that, given the plain meaning of the term “related” and the clear policy language, a reasonable attorney in the insured’s position would expect that his acts of negligence in representing the couple were related acts. Second, the court determined that the insurer was not estopped from relying on the single limit of liability, because that was a policy provision not subject to waiver and the insurer had no duty to reserve rights as to the policy limits.