Lawyer Could Only “Reasonably Expect” Claim By Former Client—Not Her Family Members

A New Jersey appellate court has held that a lawyer’s professional liability policy did not cover a lawsuit by his former client because her prior letter threatening suit was a basis for the lawyer to reasonably expect her claim prior to the inception of the policy. Law Offices of Anthony Carbone, P.C. v. Chicago Ins. Co., 2015 WL 2183989 (N.J. App. Div. May 12, 2015). But claims by the client’s husband and children were covered because the lawyer had no reason to expect a suit by anyone other than his actual client.

The lawyer represented a client in child protection proceedings but withdrew as counsel in 2008 due to her accusations of “unethical practices.” In 2010, the client’s new attorney sent letters asserting per se malpractice and threatening to file a complaint if the lawyer did not return all fees the client had paid to him. In 2012, the client, her husband, and their children filed a complaint.

The lawyer provided notice of the 2012 complaint under his professional liability policy. The insurer denied coverage because the lawyer failed to provide written notice in 2008 when he moved to be relieved as counsel or in 2010 when he received letters alleging per se malpractice. The policy required the insured to give notice upon becoming aware of any negligent act, error, or omission in the rendering of or failure to render professional services “which could reasonably be expected to be the basis of a Claim covered hereby.”

Even though the claims by the client and by her husband and children all arose from the same set of facts and circumstances, the court concluded that the lawyer rendered professional services only to his client and could only reasonably expect a claim by the client. The court therefore held that the policy’s notice provision was triggered as to the client’s husband and children only when the lawyer was served with their complaint, which was timely noticed to the insurer.

The lawyer further argued that he had no obligation to report the 2010 letters threatening a malpractice action because they involved a non-covered fee dispute. The court disagreed, reasoning that the letters clearly explained that the lawyer would be sued for malpractice should he not return the client’s fees. Upon deciding not to return the fees, the lawyer was on notice, and it was reasonable for him to expect at that time that a lawsuit could be filed against him.

Wiley Executive Summary

Sign up for updates

Wiley Rein LLP Cookie Preference Center

Your Privacy

When you visit our website, we use cookies on your browser to collect information. The information collected might relate to you, your preferences, or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. For more information about how we use Cookies, please see our Privacy Policy.

Strictly Necessary Cookies

Always Active

Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.

Functional Cookies

Always Active

Some functions of the site require remembering user choices, for example your cookie preference, or keyword search highlighting. These do not store any personal information.

Form Submissions

Always Active

When submitting your data, for example on a contact form or event registration, a cookie might be used to monitor the state of your submission across pages.

Performance Cookies

Performance cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.

Powered by Firmseek