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COREGIS INS. CO. v. WHEELER

November 12, 1998

COREGIS INSURANCE COMPANY, Plaintiff,
v.
JONATHAN WHEELER, Defendant and Third Party Plaintiff, v. BERTHOLON-ROWLAND, INC. t/a COLBURN BERTHOLON-ROWLAND, INC. Third Party Defendant.



The opinion of the court was delivered by: REED

MEMORANDUM

 Reed, J.

 November 12, 1998

 Plaintiff Coregis Insurance Company ("Coregis") has brought this declaratory judgment action against defendant Jonathan Wheeler ("Wheeler") pursuant to 28 U.S.C. § 2201, seeking a declaration that Coregis has no duty to defend or indemnify Wheeler in connection with a legal malpractice claim brought against him by Anita Wendler. This Court has jurisdiction pursuant to 28 U.S.C. § 1332 as the parties are of diverse citizenship and the amount in controversy is in excess of $ 75,000.00, exclusive of interest and costs.

 Presently before the Court is the motion of plaintiff, Coregis, for summary judgment (Document No. 11) and the response of defendant Jonathan Wheeler thereto. For the reasons stated below, the motion will be granted.

 I. BACKGROUND

 A. The Underlying Litigation

 The malpractice claim against Wheeler arises out of his representation of Anita Wendler ("Wendler"). Wheeler was retained by Wendler in February 1991 to represent her on matters concerning alleged injuries she received while hospitalized at Nazareth Hospital in March 1989. The two claims which allegedly arose from these injuries and for which Wendler allegedly retained Wheeler's representation were: (i) a medical malpractice claim against the doctor and (ii) a slip and fall claim against the hospital. Wheeler filed a lawsuit on behalf of Wendler on March 6, 1991 against the doctor and the hospital, but did not include any allegations pertaining to the slip and fall claim. The statute of limitations on the slip and fall claim expired in or about March 1991. In December 1994, Wheeler filed a petition to add the slip and fall to the complaint, but the petition was denied by the trial court. Nazareth Hospital was subsequently dismissed from the lawsuit. Wendler settled her medical malpractice claim against the doctor in May 1996, but received no compensation for the slip and fall claim against the hospital.

 In September 1996, Wheeler applied to Coregis for professional liability insurance. Coregis issued a policy insuring Wheeler, with Bertholon-Rowland, Inc. t/a Colburn Bertholon-Rowland, Inc. ("Bertholon-Rowland") as the broker. The insurance policy included an exclusion clause ("Exclusion B"). The clause excludes:

 
Any CLAIM arising out of any act, error, omission 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 or PERSONAL INJURY might be expected to be the basis of a CLAIM.=
 
(Plt's Motion, Exh. A (capitalization in original)). A claim is defined as: "a demand made upon any INSURED for DAMAGES, including, but not limited to, service of suit or institution of arbitration proceedings against any INSURED." (Id. (capitalization in original)).
 
On December 5, 1996, Wendler brought a legal malpractice suit against Wheeler on the grounds of negligent representation with respect to her slip and fall claim. Wheeler had attempted to settle this matter by reducing the fee he charged to Wendler in the medical malpractice settlement. Indeed, Wheeler asserts in his Affidavit in Opposition to Plaintiff's Motion For Summary Judgment (Document 13, Exh. B) ("Def. Affidavit") that he believed that the matter had been resolved and that Wendler would not pursue a malpractice action against him "for the misunderstanding regarding the fact that her bathroom fall was not included in the allegations of the Complaint against John Ross, M.D. and Nazareth Hospital." (Def. Affidavit at P 12). Wheeler asserts that he believed that Wendler was wholly satisfied with his representation of her. (Id. at P 14).
 
Wheeler sent a letter to Coregis on December 19, 1996 notifying the insurance company of Wendler's claim against him. (Plt's Motion, Exh. C). Shortly thereafter, Coregis informed Wheeler that coverage was denied on Wendler's claim because Wheeler had breached the prerequisite conditions of the policy *fn1" and also ...

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