Federal Judiciary

DANGEROUS LIAISONS 
By Mark Thompson
markthomp@yahoo.com
Posted 10-01-08

New York County Justice Karla Moskowitz erred in letting a law firm’s malpractice insurers off the hook on grounds that the law firm failed to notify them as soon as it had an inkling that securities fraud committed by one of its clients might one day put the firm in hot water. In fact, the insurers are obligated to defend and indemnify the firm in the lawsuits, said the Appellate Division, which unanimously reversed Moskowitz, who was elevated to the appellate court shortly after issuing her ruling in January.

While lawyers with the firm of Pepper Hamilton LLP may have been concerned about the possibility that securities fraud by one of its clients might make the firm subject to professional liability claims by entities claiming injury as a result of the client's conduct, that subjective belief was not sufficient to trigger an obligation to give notice to the professional liability insurers, the appellate panel said.  

Full post as published by Judicial Reports on October 01, 2008 (boomark / email).