Initial Inquiry Letter from Office of Disciplinary Counsel Constitutes “Disciplinary Proceeding,” Triggering Notice Obligation

A Louisiana appellate court, applying Louisiana law, has held that an initial inquiry letter from the Louisiana Attorney Disciplinary Board, Office of the Disciplinary Counsel received by a lawyer constituted a “Disciplinary Proceeding” under a lawyer’s professional liability policy, triggering an insured’s notice obligations under the policy. Trelles v. Continental Cas. Co., 2017 WL 658249 (La. Ct. App. Feb. 17, 2017).  The court held that the insured was not entitled to coverage because notice of the disciplinary action was not provided during the policy period.

On October 28, 2010, the insured lawyer received an initial inquiry letter from the Office of Disciplinary Counsel advising him that a complaint of professional misconduct had been made against him.  On May 26, 2012, the lawyer received a formal notice of charges.  At that time, he reported the matter to his insurer under his 2012-2013 professional liability policy.  The policy provided coverage for “Disciplinary Proceeding[s]” first received by the insured and reported to the insurer during the policy period.  The policy defined “Disciplinary Proceeding” as “any pending matter, including an initial inquiry, before a state or federal licensing board or a peer review committee to investigate charges alleging a violation of any rule of professional conduct in the performance of legal services.”  The insurer denied coverage on the grounds that the “Disciplinary Proceeding” began prior to the inception of the policy period when the lawyer received the initial inquiry letter.  The lawyer initiated this coverage litigation, and, on cross-motions for summary judgment, the trial court granted the insurer’s motion, finding that the initial inquiry letter was notice of a “disciplinary proceeding” as defined by the policy.

The appellate court affirmed the decision.  The appellate court found no merit to the lawyer’s argument that the initial inquiry letter was not a “Disciplinary Proceeding” because the Office of the Disciplinary Counsel is not “a state . . . licensing board” or “a peer review committee,” finding this interpretation of the policy language to be “unreasonable or strained.”  According to the court, the definition of “Disciplinary Proceeding” unambiguously encompassed the initial inquiry from the Office of the Disciplinary Counsel.  Therefore, the court affirmed the trial court’s decision that coverage was precluded because the insured failed to provide timely notice when he received the initial inquiry letter in 2010.

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