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Insurance Law

Claimant’s Assignee Unable to Pursue Breach of Contract Claim against Carrier Because the Claimant Did Not Assert His Claim during the Policy Period

In Petersen Arch Ins. Co., the Central District of California granted the carrier’s motion to dismiss and held that the claimant’s assignee could not pursue a breach of contract claim against the carrier because the claimant did not make a claim against the insured attorney during the policy period.

In Petersen, the plaintiff, an assignee of the underlying claimant’s default judgment against the insured attorney, brought suit against the carrier for breach of contract. The carrier had issued a claims-made-and-reported legal malpractice policy to the insured for the policy period of May 20, 2009 to May 20, 2010. The insured was allegedly negligent in his representation of the plaintiff during the policy period, but the plaintiff did not file his malpractice lawsuit until approximately two years after the expiration of the carrier’s policy. The insured failed to respond and a default judgment was entered against the insured. The claimant ultimately assigned the default judgment to the insured, who filed suit against the carrier.

The carrier filed a motion to dismiss, and the district court granted the motion, finding that the policy clearly explained that it covered only claims made during the policy period and the insured had not presented any evidence that the relevant claim was first made against him during that period.

Petersen v. Arch Ins. Co., 2015 U.S. Dist. LEXIS 85183 (C.D. Cal. June 30, 2015), [subscribers can access an enhanced version of this opinion: | Lexis Advance].

Originally published in California Insurance Law Review - 2015

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