Court Opinion

ID: 5896238
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:05:40.345862+00
Date Added: 2024-06-11T08:45:30.676117
License: Public Domain

Callahan, J. P., and Doerr, J. (dissenting).
We cannot agree with the majority that a Grievance Committee investigating claims of professional misconduct is a "governmental regulatory agency” within the meaning of the policy of professional liability insurance issued by plaintiff to defendant, thus obligating plaintiff to provide a defense to defendant in attorney disciplinary proceedings. In New York, only the Appellate Division of the Supreme Court has the power to regulate the conduct of attorneys admitted to practice within each judicial department (Judiciary Law § 90). Regulating attorneys is purely a function of the court, and the Grievance Committee, in assisting the court to perform this function, is operating as "an arm of the Appellate Division” (Wiener v Weintraub, 22 NY2d 330, 332). Clearly, because every attorney is an officer of the court, a review of an attorney’s conduct by a Grievance Committee is merely an internal inquiry, subject to independent review and action by the Appellate Division. In no way do the activities of the Grievance Committee constitute a proceeding before an independent regulatory body. The attorney disciplinary procedures in Maryland are very similar to those in New York. The Grievance Committee has investigatory power only with disciplinary action being taken against an attorney by the courts of the State of Maryland. Neither the Grievance Committee in New York nor the Grievance Commission in Maryland has any rule-making powers, nor do *972they have ultimate authority to enforce the rules governing attorney conduct. Only the courts have this power. Because the Grievance Committee and Grievance Commission are arms of the judiciary, they are not governmental regulatory agencies within the meaning of this policy.
Furthermore, we disagree with the majority’s attempt to construe the word "agency” in some sort of generic fashion to mean whatever the average person would think it means. We are not dealing here with an unsophisticated insured; defendant is a large, multistate law firm, employing hundreds of lawyers. An attorney, construing the terms of this policy, should have known that the agreement to defend any proceeding "brought by any governmental regulatory agency seeking non-pecuniary relief’ was inserted to cover situations involving an attorney called before governmental bodies, such as the Securities and Exchange Commission and the Federal Trade Commission, subject to nonmonetary sanctions. In our view, it defies logic and common sense for defendant attorneys to have assumed that they were purchasing insurance which would provide them with a defense to an investigation by a Grievance Committee concerning claims of improper or unprofessional conduct on their part. Accordingly, we would reverse and grant judgment declaring that the insurance contract entered into between plaintiff and defendant did not require that plaintiff defend defendant in the New York or Maryland disciplinary proceedings or reimburse defendant for any legal fees, costs or expenses associated with such proceedings. (Appeal from judgment of Supreme Court, Monroe County, Rosenbloom, J.—declaratory judgment.) Present—Callahan, J. P., Doerr, Green, Balio and Lawton, JJ.