Evanston Ins. Co. v. Law Office of Michael P. Medved, P.C., 890 F.3d 1195

Michael P. Medved’s law firm (Medved) handled foreclosures and billed fees/costs to lender clients, which ultimately were passed to property owners.
A Colorado Attorney General (AG) investigation into possible overbilling led to subpoenas and a later AG suit; a separate class action by property owners alleged overbilling.
Medved notified Evanston Insurance Company, which agreed to defend subject to a reservation of rights and later sent a detailed reservation letter months afterward.
Evanston defended under reservation for the class action, but later sued Medved for declaratory relief and reimbursement of defense costs, arguing the policy covered only "professional services," not billing practices.
The district court granted summary judgment to Evanston; Medved appealed on four issues (coverage for class action and AG investigation, timing of duty to defend, estoppel, and bad‑faith counterclaims).

Issue	Medved’s Argument	Evanston’s Argument	Held
1. Whether allegations arose from "professional services" so as to trigger duty to defend	Overbilling claims were integral to the firm’s professional services to lenders and thus covered	Allegations concerned billing practices (business conduct), not legal/professional services, so no coverage	Held for Evanston: overbilling is not a covered "professional service"; no duty to defend
2. Whether Evanston incurred duty to defend AG investigation before a complaint/draft complaint	Duty arose upon subpoenas/ongoing investigation and thus defense obligation pre‑complaint	No "claim" triggering duty until written demand/complaint; investigation alone insufficient	Held for Evanston: no duty pre‑complaint; in any event, allegations were billing-related and not covered
3. Whether Evanston is estopped from denying coverage for failing to reserve rights promptly	Failure/delay in reservation of rights estops insurer from denying coverage	Estoppel requires insured prejudice from insurer’s conduct; no prejudice shown here	Held for Evanston: no estoppel—insured showed no detrimental reliance or prejudice
4. Whether bad‑faith counterclaims survive even if no coverage	Bad‑faith claim should survive independent of coverage issues	Bad‑faith claims unsupported and were forfeited by failing to litigate below	Held for Evanston: Medved forfeited bad‑faith arguments; summary judgment affirmed

Hecla Mining Co. v. N.H. Ins. Co., 811 P.2d 1083 (Colo. 1991) (insurer’s duty to defend arises if complaint alleges facts that might fall within policy coverage)
Zurich Am. Ins. Co. v. O’Hara Regional Ctr. for Rehab., 529 F.3d 916 (10th Cir. 2008) (billing practices do not fall within coverage for professional services)
Cohen v. Empire Cas. Co., 771 P.2d 29 (Colo. App. 1989) (attorney’s business expenses/billing issues are not "professional services")
Management Specialists, Inc. v. Northfield Ins. Co., 117 P.3d 32 (Colo. App. 2004) (estoppel requires insurer’s nonreservation and insured’s detrimental reliance/prejudice)
U.S. Fidelity & Guar. Co. v. Budget Rent‑A‑Car Sys., Inc., 842 P.2d 208 (Colo. 1992) (insurer must raise or reserve defenses within a reasonable time or risk waiver/estoppel)
Hartford Live Stock Ins. Co. v. Phillips, 372 P.2d 740 (Colo. 1962) (estoppel generally cannot create coverage for risks outside the policy)
St. Paul Mercury Ins. Co. v. Am Bank Holdings, Inc., 819 F.3d 728 (4th Cir. 2016) (speculative allegations of lost settlement opportunities do not establish prejudice)
Cornhusker Cas. Co. v. Skaj, 786 F.3d 842 (10th Cir. 2015) (discussing estoppel where insurer’s conduct led to default judgment)
Braun v. Annesley, 936 F.2d 1105 (10th Cir. 1991) (analyzing estoppel and insurer conduct post‑verdict)
Pendleton v. Pan Am. Fire & Cas. Co., 317 F.2d 96 (10th Cir. 1963) (estoppel analysis where insurer later sought to disclaim coverage)