Berkshire wins dispute over lawyer professional liability policy

A federal appeals court on Tuesday affirmed a lower court ruling in favor of a Berkshire Hathaway Group Inc. unit in a dispute over an attorney’s professional liability insurance policy.

Attorney Barry LePatner owns New York-based law firm LePatner and Associates LLP, as well as a construction management company, LePatner Project Solutions LLC, according to the ruling by the 2nd U.S. Circuit Court of Appeals in New York in LePatner and Associates LLP v. RSUI Group Inc. L&A had a professional liability insurance policy with Berkshire unit RSUI.

In March 2017, Jamal and Julia Nusseibeh sued L&A and LPS in state court over an alleged agreement between them and the two companies under which L&A and LPS were to provide “construction management services,” and L&A was expected to provide related legal work, according to the decision. The lawsuit was settled.

L&A sought $168,625 in outstanding defense costs and expert fees from RSUI subsidiary Landmark American Insurance Co. that the insurer had refused to pay, on the basis its coverage was limited to claims alleging negligence in rendering professional services as a lawyer.

In related coverage litigation, LPS sued RSUI for coverage under its professional liability policy. The U.S. District Court in New York ruled in the insurer’s favor and was affirmed by a three-judge appeals court panel.

“We conclude, based on the four corners of the complaint and the language of the Policy, that RSUI was under no duty to defend LPS because the Policy covers only professional services provided as a lawyer, and the Nusseibehs’ complaint alleges no claim against L&S (or LPS) falling within that scope of coverage,” it said, in affirming the lower court.

LePatner attorney Carl A. Salisbury, an attorney with Bramnick Rodriguez Grabas Arnold & Mangan LLC in Scotch Plains, New Jersey, said in a statement, “Not surprisingly, we think the Court got it very wrong under well-settled NY insurance law on the exceedingly broad duty of an insurance company to defend its insured. I’m sure we will be reviewing our options.”

The insurer’s attorney had no comment.