Opinion ID: 672338
Heading Depth: 2
Heading Rank: 1

Heading: Recoverability of Attorneys' Fees and Costs in the

Text: 66 Colorado PUC Proceedings. 67 CNA argues that because the Colorado PUC proceedings were administrative and could not result in a determination of liability (Principal Brief of Appellant, App. 1 at 0073-74), attorneys' fees and costs incurred by PSC therein are not covered by CNA's policy, citing Reisner v. Vigilant Ins. Co., 138 Misc.2d 542, 524 N.Y.S.2d 602 (N.Y.Sup.Ct.1987). There it was held that a malpractice insurance policy covering any suit ... alleging liability for specified conduct did not provide coverage for attorneys' fees and costs incurred in disciplinary proceedings before an administrative board. 10 68 We are in agreement with the ruling of the trial judge. Unlike the malpractice policy in Reisner, the CNA policy at issue here does not limit coverage to suit[s] ... alleging liability. Instead, the policy obligates CNA to indemnify PSC for expenses ... on account of personal injuries and/or property damage caused by or growing out of each occurrence. Principal Brief of Appellant, App. 1 at 0022. Covered expenses include all sums paid as salaries, wages, compensation, fees, charges and law costs, ... expenses for ... lawyers ... and other persons, and for litigation, settlement, adjustment and investigation of claims and suits which are paid as a consequence of any occurrence covered hereunder. Id. at 0024. 69 We are persuaded that PSC's attorneys' fees and costs in the Colorado PUC proceedings constituted expenses, as the term is broadly defined in the CNA policy, arising out of a covered occurrence. The PUC proceedings were instituted by the parties (the Waranch plaintiffs and PSC) as required by the federal district judge handling the Waranch case. At the time she granted summary judgment for PSC on the contract claim, she also stayed the balance of the action pending factual determinations by the Colorado PUC and exhaustion of administrative remedies there. Appellee's Supp.App. 1 at 00063-66. Those PUC proceedings thus necessarily arose out of and were necessitated by the circumstances giving rise to the Waranch action. The resulting attorneys' fees and costs incurred by PSC in the administrative proceedings therefore resulted from a covered occurrence under the CNA policy and are proper for indemnification thereunder. 70