Dominic Gemelli v. Lindsey Haugen, Hartford Casualty Insurance Company

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-1489
Dominic Gemelli,
Appellant,
vs.
Lindsey Haugen, et al.,
Respondents,
Hartford Casualty Insurance Company,
Respondent.
Filed May 26, 2015
Affirmed
Rodenberg, Judge
Clay County District Court
File No. 14-CV-13-999
Gary M. Hazelton, Nathan T. Cariveau, Brooks M. Hazelton, Hazelton Law Firm, PLLC,
Bemidji, Minnesota (for appellant)
Ronald H. McLean, Serkland Law Firm, Fargo, North Dakota (for respondents Lindsey
Haugen, et al.)
Amy J. Woodworth, Erin Doran, Meagher & Geer, P.L.L.P., Minneapolis, Minnesota (for
respondent Hartford Casualty Insurance Company)
Considered and decided by Larkin, Presiding Judge; Rodenberg, Judge; and
Klaphake, Judge.*
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn.
Const. art. VI, § 10.
UNPUBLISHED OPINION
RODENBERG, Judge
Appellant Dominic Gemelli challenges the district court’s grant of summary
judgment determining non-coverage under a professional liability insurance policy issued
by respondent Hartford Casualty Insurance Company to debtors Lindsey Haugen and
Legal Professionals, Ltd. We affirm.
FACTS
Attorney Lindsey Haugen and Legal Professionals, Ltd. (attorneys), represented
appellant, Dominic Gemelli, on a criminal assault charge that was tried on April 29
through May 1, 2008. The jury convicted appellant, and he was thereafter sentenced to
prison. Appellant directly appealed his conviction. On October 20, 2009, we held that
the jury instructions given by the trial judge in appellant’s criminal case were plainly
erroneous. We reversed the conviction and remanded the case to the district court. See
State v. Gemelli, No. A08-1605 (Minn. App. Oct. 20, 2009). On remand, appellant was
retried and acquitted on November 4, 2010, after having spent 17 months incarcerated as
a result of the earlier conviction.
Respondent Hartford Casualty Insurance Co. (Hartford) issued a professional
liability policy to attorneys for a one-year period beginning on December 5, 2009, with a
retroactive coverage date of December 5, 2008.
In November 2011, appellant sued attorneys alleging legal malpractice and
vicarious liability. The complaint alleged damages occurring “[a]s a direct result of
[attorneys’] malpractice,” and alleged a series of acts and omissions by attorneys
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including failures to object, failures to investigate, and a failure to preserve evidence,
among other failures. Attorneys notified Hartford of appellant’s claim. Hartford
informed attorneys that it would provide neither indemnity nor defense for the legal
malpractice claim because the errors alleged in the complaint occurred before the policy’s
retroactive date of December 5, 2008.
In September 2012, appellant and attorneys settled appellant’s legal malpractice
lawsuit by way of a Miller-Shugart agreement.1 The settlement agreement provided that
appellant would be entitled to a $400,000 judgment against attorneys, recoverable from
the Hartford policy. In an effort to collect on the judgment, appellant served Hartford
with a garnishment summons and later a supplemental complaint, alleging that Hartford
was legally obligated to indemnify attorneys. Hartford appeared and denied coverage
under the policy. The district court found that the plain language of the insurance policy
did not provide coverage for appellant’s malpractice claim against attorneys, and the
court granted summary judgment in favor of Hartford. This appeal followed.
DECISION
Appellant challenges the district court’s conclusion that because there was no act,
error or omission on the part of attorneys that occurred during the policy period, the
1
When an insured has been denied coverage for a claim and the insurer declines to
provide a defense, the insured may settle a lawsuit for a stipulated sum by stipulating to a
judgment recoverable only from the insurer. See Miller v. Shugart, 316 N.W.2d 729, 735
(Minn. 1982). The unique feature of such an agreement is that, while there is a judgment
entered against the insured, it can only be recovered from the insured’s policy and the
settling plaintiff assumes the risk of non-coverage. The settling plaintiff must establish
coverage to obtain any recovery. See Jorgensen v. Knutson, 662 N.W.2d 893, 904
(Minn. 2003).
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policy did not provide coverage for appellant’s claim. On appeal from summary
judgment, “we must review the record to determine whether there is any genuine issue of
material fact and whether the district court erred in its application of the law.” Dahlin v.
Kroening, 796 N.W.2d 503, 504 (Minn. 2011). “Interpretation of an insurance policy and
application of the policy to the facts in a case are questions of law that [are reviewed] de
novo.” Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001).
The policy provision at issue here provides:
[T]he [Hartford] shall pay on behalf of the “insured” all sums
in excess of the deductible which the “insured” shall become
legally obligated to pay as “damages” by reason of any act,
error, or omission, including “claims” arising out of
“personal injury[,”] committed or alleged to have been
committed prior to the end of the “policy period” and
subsequent to the “retroactive date[,”] provided always that:
1. The “insured’s” liability arises out of the “insured”
performing or failing to perform “professional services” for
others;
2. Such “damages” result from a “claim” that is first
made against the “insured” during the “policy period” and is
reported in writing to the [Hartford] immediately but in no
event later than sixty (60) days after the expiration of the
“policy period”;
3. With respect to an act, error, omission, or “personal
injury” committed or alleged to have been committed prior to
the “policy period[,”] no other valid and collectible insurance
is available; and
4. As of the effective date of this Coverage Form, no
“insured” knew or could have foreseen that such act, error,
omission, or “personal injury” could result in a “claim[.”]
(Emphasis added.)
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The policy defines “personal injury” to mean:
a. False arrest, detention, or imprisonment;
b. Malicious prosecution or abuse of process;
c. The wrongful eviction from, wrongful entry into or other
invasion of the right of private occupancy; or
d. The publication or utterance of a libel or slander or other
defamatory or disparaging material or a publication or
utterance in violation of an individual’s right of privacy.
Where the language of a policy is clear and unambiguous, we must adopt the
policy’s plain and ordinary meaning. Henning Nelson Constr. Co. v. Fireman’s Fund
Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). Language in a policy is
ambiguous “if it is susceptible to two or more reasonable interpretations.” Eng’g &
Constr. Innovations, Inc. v. L.H. Bolduc Co, Inc., 825 N.W.2d 695, 705 (Minn. 2013)
(quotation omitted). Ambiguous terms in an insurance policy are resolved against the
insurer, but “a court should avoid reading an ambiguity into a contract in order to provide
coverage if the plain language is clear.” Illinois Farmers Ins. Co. v. Coppa, 494 N.W.2d
503, 506 (Minn. App. 1993).
The insuring provision here is unambiguous. The policy requires, as a
precondition to coverage, that the insured must have committed an “act, error, or
omission” after the retroactive date of December 5, 2008 and prior to the end of the
policy period. Appellant’s complaint alleges legal malpractice by attorneys in
representing appellant at the criminal trial that ended on May 1, 2008. The Miller-
Shugart agreement echoes the complaint and recites that attorneys are liable for a breach
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of the applicable standard of care at the criminal trial. The criminal trial occurred months
before the retroactive date of this policy. Appellant alleged no commission of any act,
error or omission after December 5, 2008. Under the unambiguous terms of the policy,
the district court properly found that appellant’s coverage claim was properly denied.
Appellant argues that the policy is ambiguous, pointing to the policy language
“including ‘claims’ arising out of ‘personal injury.’” Appellant would have us find
coverage under the policy because his incarceration amounted to a “personal injury,” and
because part of his incarceration was after the retroactive coverage date of the Hartford
policy. But the malpractice that resulted in appellant’s incarceration occurred before the
policy period, and appellant made no allegation to the contrary. Because the policy
language plainly requires an “act, error, or omission” during the policy period, the
reference to “personal injury” identifies that claims such as false arrest, malicious
prosecution and other arguably intentional torts are covered only if they arise from a
covered act, error or omission.
Coverage under this policy is unambiguously triggered by acts, errors or omissions
related to malpractice as well as the acts enumerated under the definition of “personal
injury,” any of which must take place after the policy’s retroactive date. 2 The
unambiguous language of the policy forecloses appellant’s proposed interpretation of the
2
This interpretation of the “personal injury” provision is consistent with our
interpretation of a similar provision in Hamlin v. Western Nat’l Mut. Ins. Co., 461
N.W.2d 395, 398 (Minn. App. 1990). In Hamlin, we stated that an insurance policy had a
specific “personal injury” definition that listed affirmative acts to be covered by the
policy and coverage was not extended beyond those acts enumerated in the definition. Id.
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term “personal injury” as expanding the coverage period to include torts committed
before the policy incepted when damages occur during the policy period.
For appellant to recover under the policy for a “personal injury” claim, he must
have alleged in his complaint that the attorneys committed one of the acts listed as
constituting a “personal injury” during the policy period. Attorneys would be covered for
an act of false imprisonment, wrongful eviction, or slander occurring some time after
December 5, 2008. Here, all of the claimed tortious acts and omissions, as alleged in
appellant’s complaint and in the Miller-Shugart agreement, involved only breach of the
attorneys’ standard of care during the trial ending in May 2008. Moreover, neither false
imprisonment nor any of the acts that could constitute “personal injury” are alleged in the
complaint. Appellant’s claims were only of malpractice occurring before the policy
period. Since all of the complained-of “acts, errors, or omissions” of attorneys were
before the retroactive date of December 5, 2008, this policy does not provide coverage.
Appellant also urges us to apply caselaw concerning occurrence policies in our
interpretation of the Hartford policy. He argues that the presence of a retroactive date in
the Hartford policy renders it a hybrid of a claims-made and an occurrence policy. The
Hartford policy in effect at the time appellant sued attorneys had a coverage period from
December 5, 2009 to December 5, 2010 with a retroactive date of December 5, 2008.
Identical effective and retroactive dates are common for an initial claims-made policy.
N.K.K. by Knudson v. St. Paul Fire & Marine Ins. Co., 555 N.W.2d 21, 25 (Minn. App.
1996), review denied (Minn. Dec. 23, 1996). Because renewal policies generally retain
the retroactive date of the initial policy, they are claims-made policies. Id. Therefore, the
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Hartford policy is properly characterized as a claims-made policy. Appellant’s reliance
on occurrence policy caselaw is misplaced.
Appellant’s claims against attorneys rest entirely on “acts, errors, or omissions”
alleged against attorneys before the retroactive coverage date of Hartford’s policy
insuring attorneys. As such, the claims do not fall within the policy’s insuring provisions
which plainly require an “act, error, or omission” to occur within the coverage period.
The district court properly granted summary judgment in favor of Hartford.
Affirmed.
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