Court Opinion

ID: 3012615
Source: CourtListenerOpinion
Date Created: 2015-10-13 21:51:09.737389+00
Date Added: 2024-06-11T11:46:44.280550
License: Public Domain

Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-23-2003

Westport Ins Corp v. Mirsky
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-3779

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Recommended Citation
"Westport Ins Corp v. Mirsky" (2003). 2003 Decisions. Paper 30.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/30

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                                                   NOT PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
                    ___________

                        No. 02-3779
                        ___________

         WESTPORT INSURANCE CORPORATION

                               v.

KENNETH L. MIRSKY, ESQUIRE; MICHAEL HEPPS, ESQUIRE;
     THE LAW OFFICES OF MICHAEL B.L. HEPPS;
 RENEE ROSETTI KASTON; DWIGHT THOMAS PETERSON

      Kenneth L. Mirsky, Esquire; Michael Hepps, Esquire
         and the Law Offices of Michael B.L. Hepps,

                                                Appellants

                        ___________

        On Appeal from the United States District Court
             for the Eastern District of Pennsylvania
      District Court Judge: The Honorable Robert F. Kelly
                   (D.C. Civil No. 00-cv-04367)
                          ___________

         Submitted Under Third Circuit L.A.R. 34.1(a)
                     December 9, 2003

   Before: AM BRO, FUENTES & CHERTOFF, Circuit Judges.

             (Opinion Filed: December 23, 2003)
                ________________________

                  OPINION OF THE COURT
                 ________________________
FUENTES, Circuit Judge:

      Appellant Westport Insurance Corporation (“Westport”) brought a declaratory

judgment action against its insureds, Kenneth L. Mirsky, Esq. (“Mirsky”), Michael Hepps,

Esq. (“Hepps”) and the Law Offices of Michael B.L. Hepps (“Hepps Law Offices”), seeking

confirmation that it does not owe any coverage to them stemming from a legal malpractice

action brought against the attorneys. Westport relies on Exclusion B of the professional

liability policies the corporation issued to Mirsky and Hepps, which excludes coverage for

      any CLAIM based upon, arising out of, attributable to, or directly or
      indirectly resulting from:

      ....

      B.     any act, error, omission, circumstance or PERSONAL INJURY
             occurring prior to the effective date of this POLICY if any
             INSURED at the effective date knew or could have reasonably
             foreseen that such act, error, omission, circumstance or
             PERSONAL INJURY might be the basis of a CLAIM.

(Appellee’s Supplemental Appendix at S7-S8.) Hepps and Mirsky first bought one-year

professional liability policies from Westport’s predecessor in 1995, and have subsequently

bought one-year policies from Westport each year.

      The District Court conducted a three-day bench trial and issued findings of fact which

we summarize briefly here. The underlying action with which Westport was concerned arose

out of a medical malpractice lawsuit filed in July 1995 by Renee Kaston against Valentine

Ciullo. In late 1995, Kaston’s attorney, Dwight Peterson, recruited Hepps to assist in the

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medical malpractice matter. Shortly after signing on, Mirsky began assisting Hepps in

researching various issues in the case.

       By order dated October 21, 1997, the trial court in the medical malpractice action

barred Kaston’s expert witnesses from testifying as a sanction for alleged discovery

violations by her attorneys, and ordered Mirsky to pay a total of $800 in sanctions to the

defendants. Without these experts, Kaston could not present sufficient evidence to avoid

summary judgment, which the trial court granted the defendants on September 18, 1998.

       Sometime after the grant of summary judgment (the record does not indicate the exact

dates), Mirsky and Hepps opted to renew their insurance policies with Westport. On

February 13, 1999, Mirsky’s one-year policy incepted; Hepps’ policy incepted on July 14,

1999. Neither Hepps nor M irsky reported to Westport any potential claim against them by

Kaston. In November 1999, Kaston notified Hepps and Mirsky that she was suing them for

legal malpractice, and Hepps and M irsky in turn notified Westport, which led to this

declaratory judgment action.

       The District Court exercised jurisdiction over this matter based upon diversity of the

parties. 28 U.S.C. § 1332(a)(1). We have appellate jurisdiction pursuant to 28 U.S.C. §

1291. This Court reviews a district court’s findings of fact for clear error. Scully v. U.S.

WATS, Inc., 238 F.3d 497, 505 (3d Cir. 2001), and its conclusions of law de novo, Henglein

v. Colt Industries Operating Corp., 260 F.3d 201, 208 (3d Cir. 2001).

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       After a careful review of the record and the Parties’ arguments, we find no basis for

disturbing the District Court’s thorough and well-reasoned opinion. The District Court first

made the sound conclusion that Exception B is not ambiguous. The District Court then

determined that Kaston’s legal malpractice claim arose out of acts and errors resulting during

the course of Hepps and Mirsky’s representation of Kaston. The District Court therefore

granted Westport judgment on the grounds that Hepps and M irsky should have reasonably

known of Kaston’s potential claim by September 18, 1998 (the date the trial court granted

summary judgment to the defendants), or by October 23, 1998 (the date they filed an appeal

of Kaston’s case), in either case, well before the inception of the polices under which they

now claim insure them for the alleged malpractice. The District Court’s conclusion was

warranted by the facts and the law. See Coregis Ins. Co. v. Baratta & Fenerty, Ltd., 264 F.3d

302, 307 (3d Cir. 2001) (“When an attorney has a basis to believe he has breached a

professional duty, he has a reason to foresee that his conduct might be the basis of a

professional liability claim against him.”)

       The District Court also properly noted that because Mirsky was covered under his own

policy, as well as under Hepps’ policy (because he admitted to acting as an independent

contractor on behalf of Hepps), Exclusion B of the Hepps policy barred coverage for both

Mirsky and Hepps in connection with the Kaston malpractice action, because the Exclusion

states that if “any insured” knew of the basis of a claim, there is no insurance for any insured

under the policy. Additionally, the District Court pointed out that Hepps himself knew of the

potential malpractice claim, thus undeniably barring coverage under his policy. We will

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affirm for substantially the same reasons stated in the D istrict Court’s exhaustive opinion.

_____________________________
TO THE CLERK OF THE COURT:

Kindly file the foregoing Opinion.

                                                         /s/ Julio M. Fuentes
                                                         Circuit Judge

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