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Christensen v. Darwin National Assurance Co.

United States District Court, D. Nevada

April 14, 2014

THOMAS CHRISTENSEN, CHRISTENSEN LAW OFFICES, LLC, Plaintiffs/Counterdefendants,
v.
DARWIN NATIONAL ASSURANCE COMPANY and DOES I-V, and ROE CORPORATIONS I-V, inclusive, Defendants/Counterclaimants.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

ANDREW P. GORDON, District Judge.

I. SUMMARY

Before the Court is defendant Darwin National Assurance Company's Motion for Summary Judgment. (Dkt. #20). For the reasons discussed below, the motion is granted.

II. BACKGROUND

This is an insurance coverage dispute arising under a professional liability policy issued by defendant Darwin National Assurance Company ("Darwin") to Plaintiff Christensen Law Offices, LLC (the "Firm"). The Firm and plaintiff Thomas Christensen ("Christensen"), a named principal, seek reimbursement of costs associated with a lawsuit brought against them, for which Darwin determined there was no coverage under the policy. Darwin moves for summary judgment arguing that the terms of the policy unambiguously exclude the lawsuit from coverage.

A. The Policy

Darwin issued Lawyers Professional Liability Insurance Policy No. 0304-7356 to the Firm for the policy period of July 1, 2009 to July 1, 2010 (the "Policy"). (Dkt. #20-2.) The Policy provides coverage, subject to certain limitations, for "all amounts in excess of the Retention... that an Insured becomes legally obligated to pay as Damages and Claim Expenses because of a Claim arising out of a Wrongful Act, that is first made during the Policy Period...." ( Id. at § I.A.) An "Insured" includes not only the named insured, but "any lawyer... listed in the Application, on the day the Policy Period incepts... but only in rendering or failing to render Legal Services on behalf of the Named Insured." ( Id. at § II.I. and L.)

The Policy defines "Claim" to include "[a] civil proceeding in a court of law" ( id. at § II.C.), "Damages" to mean "the monetary portion of any judgment, award, or settlement" ( id. at § II.E.), and "Claim Expenses" to mean "reasonable fees, costs and expenses charged by attorneys retained or approved by the Insurer for a Claim brought against an Insured" ( id. at § II.D.). Additionally, a "Wrongful Act" includes "an actual or alleged act, error or omission by an Insured, solely in the performance of or failure to perform Legal Services" ( id. at § II.V.), where "Legal Services" encompasses "those services performed on behalf of the Named Insured for others by an Insured as a licensed lawyer in good standing, arbitrator, mediator, title agent, notary public, administrator, conservator, receiver, executor, guardian, trustee, escrow agent, or in any other fiduciary capacity, but only where such services were performed in the ordinary course of the Insured's activities as a lawyer" ( id. at § II.K.).

The Policy also includes three relevant express limitations[1] on coverage. First, the "Business Enterprise Exclusion" bars coverage for

any claim... based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving, in whole or part... the Insured's capacity or status as... an officer director, partner, trustee, shareholder, manager or employee of a business enterprise... or trust.

( Id. at § III.B.3(a).) Second, the "Trust Exclusion" precludes coverage for

any claim... based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving, in whole or part... any act whatsoever of an Insured in connection with a trust or estate when an Insured is a beneficiary or distributee of the trust or estate.

( Id. at § III.B.2) Finally, the "Investment Advice Exclusion" provides that the Policy does not apply to

any claim... based on, arising out of, directly or indirectly resulting from, in consequence of, or in any other way involving, in whole or part... the alleged rendering of investment advice, including advice given by any ...

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