American Home Assur. Co. v. Abrams, 3:96CV01684(GLG).
| Decision Date | 30 September 1999 |
| Docket Number | No. 3:96CV01684(GLG).,3:96CV01684(GLG). |
| Citation | 69 F.Supp.2d 339 |
| Court | U.S. District Court — District of Connecticut |
| Parties | AMERICAN HOME ASSURANCE COMPANY, Plaintiff, v. James W. ABRAMS, Esq., In His Capacity as Administrator of the Estate of James M.S. Ullman, Esq.; The Estate of James M.S. Ullman; Salvatore Falconeri, In His Capacity as Executor of the Estate of Anthony Stergius; Raymond F. Gryga, In His Capacity as Administrator of the Estate of Robert F. Gryga; The Estate of Robert F. Gryga; and Robert Montemurro, In His Capacity as Executor of the Estate of Angeline C. Montemurro, Defendants. |
W. Phillip Jones, Avon, CT, for American Home Assurance Co.
Alan M. Solomon, Solomon, Krupnikoff & Wyskiel, Meriden, CT, for James W. Abrams.
Michael Joseph Walsh, Moukawsher & Walsh, Hartford, CT, for Salvatore Falconeri.
Stephen L. Jacques, Moore, O'Brien, Jacques & Yelenak, Cheshire, CT, for Robert Montemurro.
In this declaratory judgment action,1 American Home Assurance Company seeks a declaration that certain claims asserted by defendants Falconeri, on behalf of the Stergius Estate, and by Montemurro, on behalf of the Montemurro Estate, against the late James M.S. Ullman, Esq., are not covered by a Lawyer's Professional Liability policy which it issued to James M.S. Ullman, P.C.2 Ullman's Estate has counterclaimed against American Home for breach of contract for failing to provide a defense to claims asserted against the Estate and for violation of Connecticut's Unfair Insurance Practices Act ("CUIPA"), C.G.S.A. § 38a-815, et seq. Subsequently, defendant Falconeri filed a counterclaim against American Home for breach of contract, bad faith, and violation of CUIPA and Connecticut's Unfair Trade Practices Act ("CUTPA"), C.G.S.A. § 42-110a, et seq.
American Home now moves for summary judgment [Doc. # 51], and Falconeri, as Executor of the Estate of Stergius, has cross-moved for summary judgment [Doc. # 63].3 Following oral argument on the motions, the Court renders its decision granting the motion for summary judgment of American Home and denying the cross-motions of the defendants.
It is well-established that a motion for summary judgment will not be granted unless the Court determines that there is no genuine issue of material fact to be tried and that the moving party is entitled to judgment as a matter of law. Rule 56(c), Fed.R.Civ.P.; see generally Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The substantive law governing the case identifies those facts that are material on a motion for summary judgment. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir.1992) (internal citation and quotations omitted). The party moving for summary judgment bears the burden of showing that there exists no genuine dispute about an issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). In assessing the record to determine whether a genuine dispute as a material fact exists, the Court is required to resolve all ambiguities and draw all reasonable inferences in favor of the nonmovant. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
The facts in this case are essentially undisputed.
At all relevant times, James M.S. Ullman ("Ullman") was an attorney practicing law in Meriden, Connecticut. By written application dated April 24, 1993, Ullman, as president of James M.S. Ullman, P.C.,4 applied to American Home for renewal of his lawyer's professional liability ("LPL") policy. The policy that was issued, Policy No. LPL 7053308, was a "claims-made"5 policy with a policy period from September 8, 1993, to September 8, 1994, and with liability limits of $200,000 per claim and $600,000 in the aggregate, subject to a stated per-claim deductible.
In 1994, Ullman was criminally charged with first-degree larceny as a result of his alleged embezzlement of clients' funds. On the day of his scheduled court appearance, August 24, 1994, Ullman committed suicide.
Two days later, James W. Abrams ("Abrams") was appointed Temporary Administrator of Ullman's Estate. Abrams testified in his deposition that he was aware of the criminal charges against Ullman and, upon his appointment, he went to the Ullman law office, had the locks changed and secured the files. He stated that the office was in considerable disarray; it looked like the "fall of Saigon." He reviewed all of Ullman's active files and sent letters to all of the active clients, his major concern being the running of statutes of limitations.
On August 29, 1994, Abrams faxed a letter to the insurance agency, Kronholm & Keeler, Inc., which stated:
To Whom It May Concern:
I have been appointed Temporary Administrator of the Estate of James M.S. Ullman, your insured on the above-referenced policy. I have reason to believe that claims may be made against the Estate, which may involve liability under the policy, and hereby give you notice of the existence of such claims.
Please contact me at your earliest convenience.
This letter was forwarded by Kronholm & Keeler to American Home.
On that same day, Kronholm & Keeler wrote a letter to American Home, which bears the heading "First Report," and states that on August 25, 1994, they had seen "the enclosed newspaper article" regarding James M.S. Ullman, which The attached article reported that Ullman had taken his own life after he was arrested on charges of stealing $166,000 from a couple who had hired him to represent them at the closing of a mortgage refinancing. The article stated that, according to the detective's affidavit, the couple had given Ullman this money to pay off their old mortgage but, instead, Ullman had stolen the money and had attempted to cover up the theft through bad checks, wire transfers, and altered copies of checks. The article also mentioned ten grievances that had been filed with the Statewide Grievance Committee against Ullman and a dispute between Ullman and the State Department of Transportation ("DOT") over collections Ullman had performed for DOT but never remitted to DOT.
On August 30, 1994, Kronholm & Keeler again faxed the same newspaper clipping to American Home, stating on the cover sheet that "this is to put the co. on notice." On September 2, 1994, the agency sent another facsimile to American Home indicating that another potential claim against Ullman had been received and that all insurance information was being sent (presumably to the third party).
Defendant Falconeri has also submitted handwritten notes of William Powell, a professional liability claims adjuster with American Home, dated September 6 and 7, 1994, regarding "various claimants" under Ullman's "200/600 policy." His notes indicate that American Home was aware of Ullman's suicide, that they had received several claims, and that Abrams had been appointed the Temporary Administrator of the insured's estate. The memo concluded that this matter should be handled "as complex due to (1) multiple claims with potentially insufficient limits; (2) coverage issues including rescission potential." The memo noted Connecticut's "automatic 30 day ERP" (extended reporting period).
Based on the communications to and from Kronholm & Keeler, American Home's agent, as well as Powell's interoffice memorandum, there can be no genuine issue of fact that, prior to the expiration of the policy period on September 8, 1994, American Home had notice of Ullman's death, the general circumstances surrounding it, and the potential for a number of professional liability claims being filed against the policy.
On September 15th and 16th, additional facsimiles were sent from the Kronholm & Keeler agency to American Home regarding the Ullman policy and claims.
It was not until September 20, 1994, however, that American Home responded to Abrams' initial letter. Lucy Ann Galioto, Director, LPL Claims Department, wrote:
Please be advised that pursuant to the above referenced policy your letter does not constitute sufficient notice of claim. Specifically, said policy provides in pertinent part: ... Upon the Insured's becoming aware of any act, error or omission which could reasonably be expected to be the basis of a claim or suit covered hereby, written notice shall be given by or on behalf of the insured to the Company or any of its authorized agents as soon as practicable during the policy period or extended reporting period, together with the fullest information obtainable ...
Therefore, I ask that you provide me with a description of the claim including, but not limited to: the identity of claimant; the nature of his/her complaint and date which may be relevant to same.
On October 17, 1994, Abrams sent a detailed, two-page letter to Ms. Galioto expressing his concern over American Home's assertion of a notice defense to claims being made under the policy. Abrams demanded that American Home cease denying the claims and provide a defense under a reservation of rights and that American Home permit the Estate to purchase extended reporting period coverage.6 American Home never responded to Abrams' request for extended reporting coverage.7 American Home states, however, that, at this point, it had extended the reporting period sixty (60) days, as required by New York law.8
Ultimately, approximately seventy-five (75) claims were asserted against Ullman's Estate, totaling over $1.6 million, a number of which were paid. The instant lawsuit concerns only the claims filed by the Estate of Stergius and the Estate of Montemurro.9
Anthony K. Stergius, and later his Estate, had been...
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