Forrest T. Hoyt v. St. Paul Fire and Marine Insurance Company, a Minnesota Corporation

607 F.2d 864 Forrest T. HOYT, Plaintiff-Appellant, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, a Minnesota Corporation, Defendant-Appellee. No. 77-2252. United States Court of Appeals, Ninth Circuit. Nov. 5, 1979. Robert G. Beshears, O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, Phoenix, Ariz., for plaintiff-appellant. K. C. Weyl, Burch, Cracchiolo, Levie, Guyer & Weyl, Phoenix, Ariz., for defendant-appellee. On Appeal from the United States District Court for the District of Arizona. Before MERRILL and TRASK, Circuit Judges, and EAST, * District Judge. MERRILL, Circuit Judge: 1 Appellant Hoyt appeals the district court's grant of summary judgment and dismissal of his action for declaratory judgment against appellee, his professional liability insurance carrier. Hoyt, a lawyer, sought coverage benefits in regard to a malpractice action pending against him in state court. 2 On April 27, 1973, appellee issued a one-year "Lawyer's Professional Liability Policy" for Hoyt's firm. Paragraph "G" contained the following clause: 3 "This policy applies within the United States of America, its territories or possessions or Canada to professional services…

Appellant Hoyt appeals the district court’s grant of summary judgment and dismissal of his action for declaratory judgment against appellee, his professional liability insurance carrier. Hoyt, a lawyer, sought coverage benefits in regard to a malpractice action pending against him in state court.

On April 27, 1973, appellee issued a one-year “Lawyer’s Professional Liability Policy” for Hoyt’s firm. Paragraph “G” contained the following clause:

The renewal policy, effective on April 27, 1974, did not contain the “if claim is made” provision of the expired policy.

The events leading up to the malpractice claim arose out of a will drawn by Hoyt for Constance Cope in 1962, in which Cope exercised a general power of appointment given to her by her mother’s will. Cope died on November 29,1973. On January 7,1974, Hoyt received a letter from an attorney in La Jolla, California, who was handling Cope’s estate. The letter informed Hoyt of Cope’s death and requested Hoyt to sign a “Certificate of Subscribing Witness to Will,” which he did. The next communication Hoyt received from the attorney was a letter dated April 5, 1974. In part the letter stated:

Hoyt responded on April 11,1974,…

dissenting:

I respectfully dissent from the conclusions reached by the majority, except as to the estoppel issue.

It is well recognized under Arizona law that any ambiguities in an insurance contract are construed against the insurer and in favor of the insured. State Farm Mutual Automobile Insurance Co. v. O’Brien, 24 Ariz.App. 18 , 535 P.2d 46 (1975); and Mesa Oil Co. v. Business Men’s Assurance Co. of America, 476 F.2d 491, 492-93 (9th Cir.), cert. denied, 414 U.S. 1003 , 94 S.Ct. 358 , 38 L.Ed.2d 239 (1973), applying Arizona law. 1 Hoyt points out that the phrase “if claim is made” is not defined anywhere in the policy. He, therefore, urges that St. Paul is responsible for any inherent ambiguity in the meaning and consequences of that term and must be prepared to defend and answer any claim against an insured that arguably comes within the policy’s provisions. Hoyt maintains the April 5th letter was within a broad definition of the meaning of a “claim”; i. e., a mere notice that there may have been some negligence on his part in rendering a legal service.

While I do not fully subscribe to Hoyt’s expansive definition of a “claim,” I do agree with Hoyt’s contention that a…