Lawyer’s Professional Liability Insurer has Duty to Defend Suit Alleging Sexual Assault of Client

Applying Maine law, the United States District Court for the District of Maine has held that a legal professional liability insurer had a duty to defend an insured attorney against a suit alleging sexual assault of a client, because the suit arguably included allegations of misconduct by the insured attorney prior to the assault.  Spurling v. Westport Ins. Co., 2021 WL 5702161 (D. Me. Dec. 1, 2021).  The court also held that a bodily injury exclusion did not apply to negate the insurer’s duty to defend.

An attorney sought coverage from his LPL insurer for a suit filed by a former client alleging sexual assault, false imprisonment, and professional misconduct, among other causes of action.  The insurer denied coverage on the basis that the attorney had not been sued in an insured capacity because the attorney was an insured “only for professional services rendered on behalf of” the firm, and the alleged sexual assault did not constitute a professional service.  The policy defined professional services as “services rendered to others in the Insured’s capacity as a lawyer . . . and arising out of the conduct of an Insured’s profession as a lawyer.”  

The insurer also denied coverage on the basis of an exclusion that precluded coverage for “any claim based upon, arising out of, attributable to, or directly or indirectly resulting from . . . bodily injury to, or sickness, disease or death of any person.”  The exclusion contained an exception providing that it did “not apply to mental illness, emotional distress or humiliation directly arising from the rendition of professional services.

In the ensuing coverage litigation, the court agreed that sexual assault was not a covered professional service.  However, the court nonetheless granted summary judgment to the insured, reasoning that the former client’s legal malpractice cause of action plausibly stood apart from the sexual assault and false imprisonment causes of action and triggered the duty to defend the entire lawsuit.  Specifically, the court determined that the former client’s allegations that the attorney breached his ethical obligations prior to the sexual assault could arguably constitute “breaches of duty that occurred in the rendition of professional services.”   

The court also held that the bodily injury exclusion did not bar coverage.  Because the former client alleged emotional distress in connection with her legal malpractice cause of action, the exception to the bodily injury exclusion that carved out coverage for emotional distress arising from the rendition of professional services potentially applied.  Accordingly, the court held the insurer had a duty to defend.

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