In Elliott v. Continental Casualty Co., 2007 WL 530155 (La., 2007), an attorney brought an action claiming that his professional liability insurer owed a duty to defend him against another lawyer's allegation that the attorney referred a client without telling him about a prescription barring the client's case.

 

The defendant insurer had issued a lawyers' professional liability policy to the plaintiff. During the time that this policy was in effect, the plaintiff attorney was involved in several fee disputes with another lawyer. As a result of the fee disputes between the plaintiff and the other lawyer, the lawyer filed a claim alleging that the plaintiff attorney referred a client to him without informing him that the client's cause of action had prescribed. Further, the lawyer suggested that the plaintiff was the one who had allowed the client's cause of action to prescribe. Thus, the lawyer claimed that he was induced to enter into an attorney-client contract with a client having a prescribed cause of action, and as such, the lawyer argued that he suffered certain monetary damages. Because the lawyer alluded to the plaintiff's possible malpractice ( i.e., allowing the client's cause of action to prescribe), the plaintiff asserted that the defendant insurer had a duty to defend him in this underlying litigation. The insurer, however, argued that the professional liability policy did not cover any litigation couched in terms of a fee dispute.

 

The Supreme Court of Louisiana reversed the trial court's denial of summary judgment and granted summary judgment in favor of the defendant. The Court held that the policy did not cover the plaintiff's alleged liability to the other lawyer for fraudulently inducing him to accept client.

The Court stated that the lawyer's allegation that the plaintiff attorney referred the client without telling the lawyer about the prescription and that he fraudulently induced the lawyer to accept the client did not arise out of an act or omission in the performance of legal services by the insured attorney and, thus, did not state a “claim” covered by the attorney's professional liability policy. The claim for damages was from a lack of information, not the attorney's alleged malpractice in allowing the case to prescribe. In addition, the claim was that the attorney failed to render legal service for the client; his malpractice allegation merely described the type of information allegedly withheld.