This case is really a fight amongst insurance companies, but it highlights an interesting source of legal malpractice cases: the referral. While at first blush it might seem unreasonable for client to hold attorney responsible for merely giving a name to them to speak to, in American Guar. & Liab. Ins. Co. v Chicago Ins. Co. 2013 NY Slip Op 02845 Decided on April 25, 2013 Appellate Division, First Department we see the consequences of a mass mailing with indiscriminate referrals.
"Plaintiff insurer seeks to hold defendant insurer liable for claims it covered on behalf of their mutual insured, nonparty Roger A. Giuliani, Esq. Giuliani had engaged in a mass market mail campaign targeting senior citizens for estate planning legal services. Once the offer for legal services was accepted, Giuliani also offered to refer his clients to financial services representatives. Following the referrals, four clients became the victim of theft and fraud by the financial services representatives.
Each victim filed suit against Giuliani and the financial services representatives, alleging against Giuliani legal malpractice based on his failure to oversee the representatives. Two victims filed suit during the professional liability policy period covered by defendant, and two filed suit during the period covered by plaintiff (the Twomey and Bergmann actions). Giuliani also tendered the defense of the latter two to defendant, which denied coverage based on the claims being made outside the policy period.
Plaintiff settled those claims and then commenced this action, claiming that under defendant’s "claims-made" policy, the latter claims were the "same and/or related" to the first two claims and that defendant should have provided coverage to Giuliani and therefore should reimburse it. The motion court agreed, finding that because the victims’ relationship with Giuliani and the financial services professionals originated with the mass mailing campaign, the claims were related. We disagree. "