Koransky, Bouwer & Poracky, P.C., v. Bar Plan Mut. Ins. Co., CIVIL NO. 3:10cv535

• Decision Date: 08 February 2012
• Docket Number: CIVIL NO. 3:10cv535
• Parties: KORANSKY, BOUWER & PORACKY, P.C., Plaintiff, v. THE BAR PLAN MUTUAL INSURANCE COMPANY Defendant.
• Court: U.S. District Court — Northern District of Indiana

KORANSKY, BOUWER & PORACKY, P.C., Plaintiff, v. THE BAR PLAN MUTUAL INSURANCE COMPANY Defendant.

CIVIL NO. 3:10cv535

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA FORT WAYNE DIVISION

Entered: February 8, 2012

OPINION AND ORDER

This matter is before the court on cross motions for summary judgment. On October 3, 2011, the defendant, The Bar Plan Mutual Insurance Company ("Bar Plan") filed a motion for summary judgment. On November 21, 2011, the plaintiff, Koransky, Bouwer & Poracky, P.C. ("Koransky"), filed a response to which the Bar Plan replied on December 5, 2011.

On October 3, 2011, Koransky filed a cross motion for summary judgment. The Bar Plan responded to the motion on November 21, 2011, to which Koransky replied on December 5, 2011.

Also before the court is a motion to strike, filed by Koransky on November 21, 2011. The Bar Plan responded to the motion on December 5, 2011, to which Koransky replied on December 12, 2011.

For the following reasons the Bar Plan's motion for summary judgment will be granted, Koransky's motion for summary judgment will be denied, and the motion to strike will be deemed moot.

Summary Judgment

Summary judgment must be granted when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Not every dispute between the parties precludes summary judgment, however, since "[o]nly disputes over facts that might affect the outcome of the suit under the governing law" warrant a trial. Id. To determine whether a genuine issue of material fact exists, the court must construe all facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Heft v. Moore, 351 F.3d 278, 282 (7th Cir. 2003). A party opposing a properly supported summary judgment motion may not rely merely on allegations or denials in its own pleading, but rather must "marshal and present the court with the evidence she contends will prove her case." Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010).

Discussion

The Bar Plan recites the following facts in support of its motion for summary judgment. Koransky had a dispute arising with a client, George Novogroder. According to Koransky's complaint, Novogroder had an ongoing relationship to purchase parcels of real estate leased to Rite Aid, including one in Lima, Ohio.. The seller of the Lima real estate, NOM Lima Shawnee LLC, tendered a signed contract in February 2007, which was executed by Koransky's client, Novogroder, on February 9, 2007. However, not having received the contract Novogroder signed from Koransky within the specified time, NOM Lima Shawnee LLC's offer to sell the land to Novogroder expired. NOM Lima Shawnee LLC rescinded the purchase agreement with Koransky's client, Novogroder.

Attorney Jim Yannakopoulos of Koransky sent an email about the proposed Lima purchase on February 23, 2007, the day after NOM Lima Shawnee LLC withdrew the purchase agreement with Koransky 's client, Novogroder. In that email, attorney Yannakopoulos admitted that the original, signed documents relating to the Ohio purchase were placed in the wrong file. Despite this email, the Ohio seller refused to withdraw its cancellation notice, resulting in Novogroder's lost opportunity to purchase the real estate in question. The Bar Plan renewal documents identifying no risk of any claim were received by the Bar Plan from Koransky on March 19, 2007.. Koransky did not report the Novogroder claim to the Bar Plan until August 30, 2007.

Specifically, regarding the underlying Novogroder attempt to purchase property in Ohio, attorney James M. Yannakopoulos of Koransky, received a letter dated February 22, 2007 stating, "[b]uyer has not accepted and returned the Contract, and effective immediately Seller hereby rescinds Seller's signature to the offer and declares the Contract null and void and of no further effect." Attorney Yannakopoulos wrote an email on February 23, 2007 stating, "I looked through all my files. It turns out the originals were placed in the wrong Rite Aid file, attached are scanned copies of the signed documents. This whole situation was my fault and not the fault of my client. I apologize for the situation. I therefore kindly request that the cancellation notice be withdrawn, and upon withdrawal, I will overnight the signed originals." In response, Attorney Yannakopoulos received an email stating, "[o]ur business team has met and confirmed their decision to rescind the Seller's offer. We have decided to take a different strategic direction with this property..."

Koransky's client Novogroder contested the withdrawal, and the matter proceeded to litigation in more than one state. According to the complaint, while NOM Lima sued in Alabama, Novogroder sued in Ohio. The Alabama court asserted jurisdiction over Novogroder,and found that no contract had been formed. Novogroder v. NOM Lima Shawnee LLC, 2009 U.S. Dist. LEXIS 116729 (N.D.Ohio Nov. 20, 2009). In Novogroder, the District Court in Ohio noted that the Alabama court issued a declaratory judgment in favor of NOM. Id. at *1-4. It explained that "I stayed this suit, permitting the first-filed Alabama suit to go forward. That court determined, and its judgment is final, that the parties did not have a contract for the sale and purchase of the drugstore. That judgment precludes Novogroder's claims in this case." Novogroder v. NOM, 2010 U.S. Dist. LEXIS 118517(N.D.Ohio Nov. 8, 2010). The Ohio district court explained the facts as follows:

[a]fter extensive negotiations and three earlier drugstore

sale/purchase

transactions involving the same parties, the owner sent a signed purchase agreement to Novogroder. He did not return it ... the owner notified Novogroder that it was rescinding its offer. Novogroder's counsel immediately contacted the owner, asking it to go through with the sale to Novogroder. It declined to do so.

Id. at *2-3.

Policy No. 0007240-2006, policy period 4-15-06 to 4-15-07, the contract between the Bar Plan and Plaintiff states in relevant part:

II. COVERAGE ...

C. DISCOVERY CLAUSE:

If during the Policy Period, or any Extension Period elected hereunder, an Insured first becomes aware of a specific incident, act or omission while acting in a professional capacity providing Legal Services, which may give rise to a Claim for coverage is provided under this Policy, and during the Policy Period or any Extension Period Coverage the Insured gives written notice to the company of:

1. The specific incident, act or omission;

2. The injury or damage which has resulted or may result from such incident, act or omission; and

3. The circumstance(s) by which the Insured first became aware of such incident, act or omission; then any Claim that may subsequently be made against the Insured arising out of such incident, act or omission shall be deemed for thepurposes of this insurance to have been made during the Policy Period or any Extension Period elected hereunder. The Insured shall cooperate fully with the Company as provided in Section VII. CLAIMS, Paragraphs A. and B., and any investigation conducted by the Company or its representatives shall be subject to the terms set forth in this Policy.

(2006-2007 Contract, p. §IIC, pages 19-20 of 30, emphasis added).

In its Renewal Application for Lawyers' Professional Liability Insurance, for the 4-15-2007- 4-15-2008 policy period, signed by Greg A. Bouwer on March 10, 2007 and received by The Bar Plan on or about March 19, 2007, Koransky provided in pertinent part:

CLAIMS

24. After the inquiry of each lawyer named in the firm: ...

b. has the firm or any attorney in the firm been the subject of a professional liability claim, suit, bar complaint, formal grievance or fee dispute filed with a state or local bar association not previously reported to us? () Yes (X) No

c. does the firm or any attorney or employee in the firm have knowledge of any incident, circumstance, act or omission, which may give rise to a claim not previously reported to us? () Yes (X) No

(Renewal Application for Insurance, for the 2007-2008 policy period, emphasis added). The Renewal Application for Lawyers Professional Liability Insurance provides in pertinent part:

NOTICE TO APPLICANT - PLEASE READ CAREFULLY: REPRESENTATION: Applicant represents that the statements and information contained herein are true and that Applicant has not suppressed, omitted or misstated any facts. Applicant has made inquiry with each lawyer in the firm regarding the accuracy of the answers on this application. Applicant agrees that this application shall be the basis of the Policy of insurance issued by the Company and incorporated therein. Applicant agrees to notify the Company of any material change(s) in the statements in the application forms between the date of the application and the effective date of the Policy of insurance. Applicant understands that any change(s) may result in an adjustment of the terms and conditions of the Policy of insurance and/or premium charges. Applicant understands that the Policy applied for provides coverage on a "claims made and reported" basis for ONLY THOSE CLAIMS THAT ARE FIRST MADE AGAINST THE INSURED AND REPORTED TO THE COMPANY DURING THE POLICY PERIOD and that coverage ceases with the terminationof the Policy unless Applicant exercises the options available in the Policy for Extended Reporting Coverage.

IMPORTANT REMINDER

TO AVOID LOSS OF COVERAGE IT IS IMPERATIVE THAT ALL KNOWN CIRCUMSTANCES, ACT OR OMISSIONS WHICH COULD RESULT IN A PROFESSIONAL LIABILITY CLAIM AGAINST YOU, YOUR FIRM OR A PREDECESSOR IN BUSINESS BE REPORTED TO YOUR PRESENT INSURER WITHIN THE TIME PERIOD SPECIFIED IN YOUR PRESENT POLICY. PLEASE CONTACT THE BAR PLAN MUTUAL INSURANCE

...