Plaintiff insured, a lawyer, sued defendant insurer for failing to provide coverage on a malpractice claim. The Superior Court of Orange County, California, granted summary judgment for the insurer, and the insured sought review.
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A former client filed a malpractice suit against the insured on the Thursday before the Sunday on which the policy expired. The insured received an inquiry from a legal journal the same day, but did not take it seriously, and he was not served with notice until after the policy expired. The insured immediately notified the insurer of the claim the following Tuesday after seeing an article describing the claim. The insurer denied coverage because the insured had not reported the claim during the policy period. On appeal, the court reversed the judgment for the insurer, finding that the reporting requirement was an express condition precedent that could not be avoided by construction but that could be equitably excused under the particular circumstances of the case. In discussing the equities, the court found significant the facts that the insurer did not offer an extended reporting endorsement, which could have given the insured an extra 60 days to report any claims, that the insured did not have sufficient time to conduct an investigation as to whether a claim had indeed been made against him, and that the insured reported the claim the day he received confirmation of it.
The court reversed the judgment in favor of the malpractice insurer and directed the trial court to conduct further proceedings.