A federal judge in Virginia rescinded a legal malpractice insurance policy after finding that the firm's ignorance of one attorney's embezzlement of client funds could not save coverage for malpractice lawsuits against it, according to an article in Andrews Publications.

U.S. District Judge Henry Hudson of the Eastern District of Virginia said everyone in the firm---Minnesota Lawyers Mutual Co.--was bound by the policy wording that did not provide for qualification of the representations in the application as being "to the best of their knowledge."

In the meantime Dalton submitted an application to renew the policy, reaffirming Hancock's prior statement about possible grounds for a malpractice claim.

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