Accounting Firm Loses Bid to Secure Coverage
Judge William D. Quarles Jr. denied a motion for summary judgment filed by an account firm in a declaratory judgment action seeking coverage for a malpractice claim.
A claim against Trice, Geary & Myers alleged that the firm recommended that its clients participate in a defined benefit pension plan which caused them to unnecessarily be audited and forced to incur attorneys' fees and tax debt.
The insurance company, CAMICO Mutual, denied coverage because, well, that is what insurance companies do. CAMICO Mutual says it had no duty to defend the accounting firm because the underlying allegations related to the insureds' work as insurance agents and that the policy excluded claims "in connection with or arising out of any act, error or omission by any Insured in his/her capacity as an (insurance) agent or broker." (Actually, they might have a point here, I hate to say.)
I remember having a case in from of Judge Quarles when I was a defense lawyer that I thought was ripe for summary judgment. His response then was essentially, "You probably do but let discovery play itself out a little bit first." Similarly, here the court found discovery appropriate to flush out the arguments. That's not a bad idea but I bet that discovery will shed little light on the interpretation of what appears to be an ambiguous contract.
One good piece of advice comes out of this case. Get enough coverage to cover any claims that might get filed against you. This is a $180,000 claim with only 100k in coverage even if they can get CAMICO on the hook.
You can find the full opinion in Trice, Geary & Myers, LLC v. CAMICO Mutual here.