Gandor v. Torus National Insurance
140 F. Supp. 3d 141
D. Mass.2015Background
- Plaintiff Samer Gandor sued Torus (insurer) after Torus denied coverage and defense for malpractice claims arising from attorney Adam Lowenstein’s 2009 mishandling of Gandor’s zoning appeal.
- Lowenstein admitted the error in January 2010; he informed his former partner Alan Shocket, who told Gandor he did not view the actions as malpractice and sought a release. Gandor rejected the release and continued communications.
- Torus issued a claims-made policy to Shocket Law Office for 11/27/2010–11/27/2011 (2010–11 Policy) and a later policy for 11/27/2012–11/27/2013 (2012–13 Policy). Gandor sued Lowenstein in 2011 (Lowenstein Action); that action settled with a $500,000 judgment and an assignment of rights to Gandor.
- Gandor then sued Alan Shocket in 2013 (Shocket Action) alleging failure to insure Lowenstein; that claim also settled with a $500,000 judgment and assignment to Gandor.
- Gandor filed this suit alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of Mass. Gen. Laws ch. 93A based on Torus’s denials of coverage; Torus counterclaimed for declaratory relief. The court considered Torus’s motion for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2010–11 policy covers Gandor’s claims | Gandor contends the 2010–11 policy should cover the malpractice-related claim; Torus wrongfully denied coverage | Torus argues Exclusion 11(B) bars claims arising from wrongful acts known or reasonably foreseeable before the 11/27/2010 effective date | Exclusion 11(B) applies: Shocket knew or reasonably could foresee Gandor’s malpractice claim by Jan–Apr 2010, so 2010–11 policy does not cover the claim |
| Whether the 2012–13 policy covers the 2013 Shocket claim | Gandor contends Torus applied the wrong policy (2010–11) to the 2013 claim and that the 2012–13 policy should provide coverage | Torus argues (1) the 2013 claim arises from the same wrongful conduct as the 2011 claim and thus is treated as first made in 2011 under the 2010–11 policy; (2) alternatively, the 2012–13 policy excludes non-professional acts and Shocket’s alleged failure to insure is commercial, not a professional service | Held for Torus: the 2013 claim arises from the same wrongful conduct and is therefore treated as part of the earlier claim under the policies; even if not, the failure-to-insure allegation is a commercial act outside the 2012–13 policy’s definition of professional services |
| Whether Torus violated Mass. Gen. Laws ch. 93A | Gandor argues coverage denial was wrongful and constituted unfair/deceptive practices under Chapter 93A | Torus says denial was legally justified under policy language and exclusions | Court holds no 93A violation because denial of coverage was proper |
| Whether any factual disputes preclude summary judgment | Gandor implies factual disputes about which policy governs and coverage scope | Torus says no genuine material fact disputes; coverage issues are legal and resolvable on the record | Court finds no material factual disputes and grants summary judgment for Torus |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment genuine dispute standard)
- Morris v. Gov’t Dev. Bank of Puerto Rico, 27 F.3d 746 (definition of genuine issue at summary judgment)
- Vermont Mut. Ins. Co. v. Zamsky, 732 F.3d 37 (insurance coverage interpretation on summary judgment)
- Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399 (claims outside policy coverage support insurer summary judgment)
- Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass. 387 (insurance exclusion interpretation)
- Hakim v. Massachusetts Insurers’ Insolvency Fund, 424 Mass. 275 (exclusions construed strictly but given ordinary meaning when unambiguous)
- TIG Ins. Co. v. Blacker, 54 Mass. App. Ct. 683 (objective/subjective test for prior-acts exclusion in professional-liability policy)
- A.W. Chesterton Co. v. Massachusetts Insurers Insolvency Fund, 445 Mass. 502 (reasonable insured’s expectations in policy interpretation)
- Finn v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 452 Mass. 690 (ordinary-meaning rule for policy terms)
- Reliance Nat. Ins. Co. v. Sears, Roebuck & Co., 58 Mass. App. Ct. 645 (distinguishing professional services from commercial/business acts)