Brief Summary
Plaintiff, a professional liability insurer, filed a declaratory judgment action against defendants, its insureds—a law firm and attorney—contending it had no duty to defend because insured's actions constituted intentional conduct and was excluded from coverage. The appellate court held the trial court erred in granting judgment for insured because the conduct of insured, as alleged in underlying complaint (alleging self-dealing, breach of good faith and fair dealing, and breach of trust for failure to administer a trust), was intentional misconduct, which was excluded from coverage.
Complete Summary
The remainder beneficiaries of a trust sued the attorney who represented the trust and was a co-trustee of the trust, alleging that the lawyer engaged in willful misconduct. The attorney's professional liability insurer filed an action for declaratory judgment contending that it had no duty to defend, because his actions constituted intentional conduct and was excluded from coverage. The trial court concluded the insurer had a duty to defend under the terms of the policy. The insurer appealed.
The appellate court reversed, finding that the attorney's conduct, as alleged in the underlying complaint, was excluded from coverage because the allegations were those of willful misconduct that included: (1) the insured "willfully refused to distribute the remaining trust assets;" (2) self-dealing by the insured, by refusing to liquidate the...
