Court Opinion

ID: 173152
Source: CourtListenerOpinion
Date Created: 2010-08-14 19:11:31+00
Date Added: 2024-06-11T17:25:23.292059
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                 January 29, 2010
                            FOR THE TENTH CIRCUIT               Elisabeth A. Shumaker
                                                                    Clerk of Court

    PROFESSIONAL SOLUTIONS
    INSURANCE COMPANY,

                Plaintiff-Appellant,
                                                          No. 09-1286
    v.                                       (D.C. No. 1:07-CV-02481-PAB-KLM)
                                                           (D. Colo.)
    HARRY MOHRLANG; LENORA
    MOHRLANG; BRUCE A.
    MOHRLANG,

                Defendants-Appellees.

                             ORDER AND JUDGMENT *

Before GORSUCH and ANDERSON, Circuit Judges, and BRORBY, Senior
Circuit Judge.

         This diversity dispute turns on whether two professional insurance claims

against the same attorney are related to one another. Appellant Professional

Solutions Insurance Company (PSIC) provided single coverage liability of

*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
$500,000, up to an annual aggregate limit of $1 million, to one of its insureds. 1

When appellee Bruce Mohrlang submitted a negligence claim against the insured,

and appellee Harry Mohrlang submitted another alleging breach of fiduciary

duties, PSIC conceded liability of at least $500,000 on each but argued that under

the policy definitions, the claims were related and thus subject to the $500,000

single coverage limit. The parties eventually settled, with PSIC agreeing to pay

the single coverage limit of $500,000 and pursue this declaratory judgment action

to determine any further liability. The sole question was whether the two claims

were related to one another so as to cap PSIC’s liability at $500,000, or whether

the two claims were unrelated and thus separately covered under PSIC’s annual

1
      The policy limits provide:

      Regardless of the number of:
      •    you covered by this policy;
      •    claims made; or
      •    persons or entities making claims

      the policy limits stated in the Declarations apply as follows:

      1.     EACH CLAIM - The most we’ll pay for damages and claims
             expenses arising from each claim made under this policy is
             [$500,000].
      2.     ANNUAL AGGREGATE - The most we’ll pay for all damages and
             claims expenses arising from all claims made under this policy is
             [$1,000,000].

Aplt. App. at 23 (Policy, Sec. F). The policy further provides: “If related claims
are subsequently made against you and reported to us, all such related claims,
whenever made, shall be considered a single claim . . . .” Id.

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aggregate limit of $1 million. On a stipulated record, the district court granted

summary judgment in favor of the Mohrlangs.

      The court recognized that the critical inquiry was whether the claims were

“temporally, logically or causally connected by any common fact, circumstance,

situation, transaction, event, advice or decision.” Aplt. App. at 202 (internal

quotation marks omitted). 2 The court understood that Bruce Mohrlang’s claim

was based on the insured’s negligence in structuring a corporate stock sale, while

Harry Mohrlang alleged breach of fiduciary duties based on the insured’s

misrepresentations that caused him to release a deed of trust he held against the

corporate entity. Thus, the court set out to ascertain whether the insured’s breach

of fiduciary duties was temporally, logically or causally connected to the stock

sale; the court concluded it was not.

      First, the court found that Harry Mohrlang’s claim was not temporally

connected to the sale because the insured caused Harry Mohrlang to release his

deed of trust some three weeks after the sale closed. Next, the court found no

2
       The policy defines “related claims” as “all claims arising out of a single
act or omission or arising out of related acts or omissions in the rendering of
professional services.” Id. at 25 (Policy, Sec. I, ¶ 10). In turn, the phrase
“related acts or omissions” is defined as “all acts or omissions in the rendering
of professional services that are temporally, logically or causally connected by
any common fact, circumstance, situation, transaction, event, advice or decision.”
Id. (Policy, Sec. I, ¶ 9). Hence the court’s recognition that “related claims” are
“claims arising out of a single act or omission or arising out of all acts or
omissions in the rendering of professional services that are temporally, logically
or causally connected by any common fact, circumstance, situation, transaction,
event, advice or decision.” Id. at 202 (internal quotation marks omitted).

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logical connection between the claim and the sale because neither the deed of

trust nor the promissory note it secured was incorporated into the final sale

agreement and both should have remained unaffected by the sale. Finally, the

court determined that no causal connection existed between Harry Mohrlang’s

claim and the sale because the promissory note remained a valid, independent

obligation even after the sale, and the deed of trust was not released until the

insured’s unforeseeable acts severed any causal link that could have existed.

Hence, the court ruled that the two claims were unrelated and PSIC was liable

under the policy’s $1 million annual aggregate limit.

      We have reviewed the grant of summary judgment de novo, Ellenberg v.

N.M. Military Inst., 572 F.3d 815, 819 (10th Cir.), cert. denied, — S. Ct. —,

2009 WL 3268021 (2009), and agree that the two claims are unrelated, cf. Berry

& Murphy, P.C. v. Carolina Cas. Ins. Co., 586 F.3d 803, 814 (10th Cir. 2009)

(concluding that two alleged acts of malpractice were related). Moreover, having

reviewed the parties’ appellate materials, the district court’s order, and the

relevant legal authority, we agree with the district court’s cogent and

well-reasoned analysis. The analysis was detailed, accurate, and complete, and

we see no reason to repeat it here. Accordingly, for substantially the same

                                          -4-
reasons as articulated by the district court in its order dated February 10, 2009,

we AFFIRM.

                                                     Entered for the Court

                                                     Neil M. Gorsuch
                                                     Circuit Judge

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