Facts

In 2008 plaintiff Doe Attorney and his law firm applied for professional liability insurance from the Underwriters of Lloyd's of London. On the application for insurance plaintiff replied "No," to question 10.C asking whether the applicant was aware of any circumstances, allegations, tolling agreements or contentions as to any incident which may result in a claim being made against the applicant or any of its past or present owners or partners. Underwriters issued a policy to plaintiff and Doe Law Firm for a one-year period. In 2011, plaintiff's former client filed a malpractice suit against plaintiffs, stemming from a property case that the former client had lost, and which was affirmed on appeal in 2009. Plaintiffs forwarded the complaint to defendant. Defendant sent a denial letter advising plaintiffs no coverage was available under the policy.

PLAINTIFF'S CONTENTIONS:
Plaintiffs argued that, although they knew the former client had lost her case and asked for an agreement from Doe Attorney waiving the statute of limitations, on the effective date they could not identify any act, error, or omission that might be the basis for a malpractice claim.

DEFENDANT'S CONTENTIONS:
Defendant argued that no coverage was available under the policy because the claim fell under an exclusion and because of plaintiffs' answer to Question 10.C, which defendant claimed constituted a material misrepresentation and omission.

Result

The court granted defendants motion for summary judgment and denied plaintiff's motion for summary judgment, finding that the materiality of the undisclosed potential suits was obvious and constituted sufficient grounds for denial of coverage.