Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Insurance

A general contractor was owed money for its work on a construction project. The attorney who had been representing the contractor in connection with the project recorded a mechanic's lien but thereafter failed to serve a stop notice on the project's construction lenders and failed to file a complaint to foreclose the mechanic's lien. As a result of the attorney's omissions, the contractor was unable to collect the amount it was owed.

The contractor then commenced this action against its attorney. The attorney's professional liability insurance policy contains a provision limiting coverage to a maximum of $250,000 "for each claim" and further provides that, "Two or more claims arising out of a single act, error or omission or a series of related acts, errors or omissions shall be treated as a single claim."

The narrow issue before us is one of first impression. Does the policy's $250,000 per claim limit apply to the attorney's two omissions? We hold the limitation applies for two independent reasons: (1) The contractor's suit against its former attorney is a single claim within the meaning of the insurance policy's definition of "claim." (2) Even if the…

A general contractor was owed money for its work on a construction project. The attorney who had been representing the contractor in connection with the project recorded a mechanic’s lien but thereafter failed to serve a stop notice on the project’s construction lenders and failed to file a complaint to foreclose the mechanic’s lien. As a result of the attorney’s omissions, the contractor was unable to collect the amount it was owed.

The contractor then commenced this action against its attorney. The attorney’s professional liability insurance policy contains a provision limiting coverage to a maximum of $250,000 “for each claim” and further provides that, “Two or more claims arising out of a single act, error or omission or a series of related acts, errors or omissions shall be treated as a single claim.”

The narrow issue before us is one of first impression. Does the policy’s $250,000 per claim limit apply to the attorney’s two omissions? We hold the limitation applies for two independent reasons: (1) The contractor’s suit against its former attorney is a single claim within the meaning of the *858 insurance policy’s definition of “claim.” (2) Even if the contractor’s…

I concur in the judgment. In my view, however, much of the discussion in the majority opinion is unnecessary. As I shall explain, the majority interjects a doctrine of civil, pleading into an insurance dispute that has nothing to do with pleading. Moreover, the majority reaches out to *874 decide an issue concerning the scope of “related” acts or omissions under an insurance contract that is superfluous to a resolution of the narrow dispute in this case, and decides the issue in unnecessarily broad terms.

I

This is an insurance case. The question here is whether, when an attorney commits two separate acts of negligence in the same matter that preclude his client’s right to recover a single sum against either of two other parties, on either of two legal theories, the attorney’s malpractice insurer is liable for only one claim under the policy, or is liable for two claims. The majority determines that under these circumstances the insurer can be liable for only one claim. I agree with the result, but not the reasoning, of the majority opinion.

The majority analyzes the question of whether one or two claims were made under the insurance policy in this case in terms of the “primary…