Payment of attorney fees is a subject most solemn to attorneys, and a subject of great exasperation to clients. What happens if you are sued, hire a set of attorneys to defend you and then discover that you had insurance which would have provided a free defense and the attorneys failed to discover or push you to use that insurance?
Soni v Pryor 2016 NY Slip Op 03731 Decided on May 11, 2016 Appellate Division, Second Department provides a partial answer. “In an action to recover damages for legal malpractice, the defendants Robert L. Pryor, A. Scott Mandelup, and Pryor & Mandelup, LLP, appeal, as limited by their brief, (1) from so much of an order of the Supreme Court, Nassau County (Brown, J.), dated March 3, 2014, as denied that branch of their motion, made jointly with the defendant Anthony F. Guiliano, which was for summary judgment dismissing the complaint insofar as asserted against them, and (2) from so much of an order of the same court entered June 4, 2014, as, upon reargument, adhered to its original determination in the order dated March 3, 2014, denying that branch of their motion, made jointly with the defendant Anthony F. Guiliano, which was for summary judgment dismissing the complaint insofar as asserted against them.”
“ORDERED that the ordered entered June 4, 2014, is affirmed insofar as appealed from;”
“The plaintiffs retained the defendants Robert L. Pryor, A. Scott Mandelup, and Pryor & Mandelup, LLP (hereinafter collectively the appellants), to represent them in an action commenced against them by CIT Healthcare, LLC (hereinafter the CIT action). The CIT action included allegations that the plaintiffs, as directors and officers of several corporations, aided and abetted the corporations in committing acts of fraud and conversion. After the appellants withdrew as counsel for the plaintiffs, the plaintiffs commenced this action, alleging that the appellants had committed legal malpractice by failing to advise them that they had coverage for the CIT action under a “Directors and Officers” coverage section of an insurance policy issued by National Union Fire Insurance Company of Pittsburgh, Pa. (hereinafter National Union) to one of the corporate entities the plaintiffs controlled.
The appellants moved, inter alia, for summary judgment dismissing the complaint insofar as asserted against them. They asserted, among other things, that any failure on their part to advise the plaintiffs of the existence of insurance coverage did not proximately cause the plaintiffs any damages because a policy exclusion would have barred coverage with respect to the CIT action. The Supreme Court denied that branch of the motion and, upon reargument, adhered to that determination.”
“Here, the Supreme Court correctly determined that the appellants failed to meet their prima facie burden of demonstrating that the plaintiffs could not prove the element of proximate cause due to a policy exclusion. “In construing policy provisions defining the scope of coverage pursuant to a policy of insurance, courts first look to the language of the policy, reading it in light of common speech and the reasonable expectations of a businessperson, and in a manner that leaves no provision without force and effect” (Yeshiva Viznitz v Church Mut. Ins. Co., 132 AD3d 853, 854 [internal quotation marks and citation omitted]; see Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383; Consolidated Edison Co. of N.Y. v Allstate Ins. Co., 98 NY2d 208, 221-222; ABM Mgmt. Corp. v Harleysville Worcester Ins. Co., 112 AD3d 763, 764). ” To negate coverage by virtue of an exclusion, [it] must [be] establish[ed] that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case'” (Westview Assoc. v Guaranty Natl. Ins. Co., 95 NY2d 334, 340, quoting Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 652).”