867 F. Supp. 2d 153
D. Mass.2012Background
- Financial Resources administers the FRN Plan; Caplitz is a contracted Indianapolis Life agent enrolled in the E&O policy; Meiselman cross-claim arose in Indianapolis Life suit seeking rescission and commissions; policy is a claims-made-and-reported E&O policy with awareness and reporting provisions; court previously granted summary judgment on some counts and denied on others; renewed motions focus on coverage and timing of notice, and on damages for remaining counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Financial Resources/Herman/Caplitz insured under the E&O policy to defend/indemnify Meiselman cross-claim? | Plaintiffs contend insured status extends to Resources/Herman and Caplitz under policy terms. | Defendants contend Resources/Herman are not insureds; Caplitz not covered under either 2003-04 or 2004-05 policy. | No coverage for these insureds; Count II granted to defendants (no duty to defend/indemnify). |
| Did Caplitz report a claim within the policy period or notice window to trigger coverage under the Awareness/Extended Reporting provisions? | Caplitz reported potential claims under Awareness; extended reporting period arguments apply. | Awareness applies only to reports during the policy period; no timely actual claim reported within 2003-04; 2004-05 notice not proper. | Caplitz failed to satisfy notice requirements; no coverage under both the 2003-04 and 2004-05 policies. |
| Did Caplitz’s alleged notice via August 31, 2005 email satisfy the 2004-05 policy reporting requirements or estoppel? | Meiselman’s attorney notice and defendants’ representations create estoppel and satisfy reporting. | Notice not timely under policy terms; estoppel not applicable due to lack of reasonable reliance and policy language restricting waivers; no coverage. | No coverage under 2004-05 policy; estoppel not sufficient to create coverage. |
| Are damages element(s) satisfied for remaining counts (I, III, IV, V, VI) if coverage existed? | Damages shown via attorney fees, lost commissions, and reimbursement agreements. | Damages required; record does not establish recoverable damages under the E&O policy. | Damages issue exists; however, with no coverage finding, remaining counts are not resolved in plaintiffs’ favor on summary judgment. |
Key Cases Cited
- Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399 (1st Cir.2009) (duty to defend broader than duty to indemnify)
- Chas. T. Main, Inc. v. Fireman’s Fund Ins. Co., 406 Mass. 862, 551 N.E.2d 28 (Mass. 1990) (claims-made policy; notice and coverage requirements; ambiguity rule when interpreting policy language)
- Continental Casualty Co. v. Gilbane Building Co., 391 Mass. 143, 461 N.E.2d 209 (Mass. 1984) (principles for interpreting insurance contracts and defense obligations)
- Scottsdale Ins. Co. v. Torres, 561 F.3d 74 (1st Cir.2009) (ambiguous policy terms construed in insured’s favor; focus on plain language and whole policy)
- Timpson v. Transamerica Insurance Co., 669 N.E.2d 1094 (Mass. App. Ct. 1996) (insured bears burden to prove coverage under policy terms)