Background
Lauren Bridges sued a law firm for legal malpractice after the firm failed to respond to summary judgment motions in her underlying medical malpractice case. The law firm held legal malpractice insurance with Maxum Indemnity Company and Landmark American Insurance Company. Both insurers denied coverage, citing policy terms. Bridges sued the insurers for breach of contract and declaratory judgment. The district court granted the insurers motions to dismiss, ruling the claims were time-barred or excluded. Bridges appealed, challenging only the dismissal of claims against Maxum and Landmark.
The court’s reasoning
The court applied Michigan law, which requires insurance contracts to be interpreted according to their plain language. For Maxum, the court found the notice provision unambiguous. It required reporting a potential claim during the Policy Period, which ended in May two thousand nineteen. The firm reported the potential claim in April two thousand twenty, during the Extended Reporting Period, which did not satisfy the condition precedent. The court rejected the argument that a discrepancy between the endorsement and the policy created ambiguity, calling it a scrivener error. For Landmark, the policy incorporated the StarStone policy, which excluded claims based on wrongful acts prior to the Retroactive Date of May two thousand nineteen. The alleged malpractice occurred in two thousand eighteen, falling outside the coverage period. The court also held that Bridges waived any argument about inconsistent rulings with StarStone by failing to raise it in the district court.
What it means going forward
The ruling reinforces strict adherence to notice deadlines in legal malpractice insurance policies and clarifies that scrivener errors in endorsements do not automatically create ambiguity if the intent is clear.