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Minn. Lawyers Mut. Ins. Co. v. Mazullo

April 19, 2010

MINN. LAWYERS MUT. INS. CO., PLAINTIFF,
v.
CHRISTOPHER MAZULLO, DEFENDANT.



The opinion of the court was delivered by: Eduardo C. Robreno, J.

MEMORANDUM

I. Introduction

This is a declaratory judgment action regarding professional liability insurance. Plaintiff, Minnesota Lawyers Mutual Insurance Company ("MLM"), brings this complaint against Defendant, Christopher Mazullo, Esq. ("Mazullo"), requesting a judgment declaring the parties' respective rights and obligations under an insurance policy concerning Mazullo's claim for defense and indemnity from pending lawsuits against him. MLM is a Minnesota corporation, eligible to underwrite insurance policies in Pennsylvania. Mazullo is a lawyer, Pennsylvania citizen and named insured under a policy with MLM.

On January 29, 2010, MLM filed a motion for summary judgment. On February 16, 2010, Mazullo filed a cross motion for summary judgment and reply in opposition to MLM's motion. MLM responded to Mazullo's cross motion on March 3, 2010. The case is now ripe for disposition. For the reasons that follow Plaintiff's motion for summary judgment will be granted and Defendant's cross motion for summary judgment will be denied.

II. Background

A. Underlying Policy

On or about April 1, 2009, MLM issued a Lawyers' Professional Liability Policy ("the Policy") to Mazullo, with effective coverage from April 1, 2008 through April 1, 2009.*fn1

B. State Court Actions

First, on August 27, 2008, W. Stanley Delp, Jr. ("Delp") commenced a civil action in the Court of Common Pleas of Bucks County, Pennsylvania, against sixteen defendants, including Mazullo, asserting causes of action stemming from Delp's investment with defendants in several real estate investment projects.*fn2 Specifically, in his Second Amended Complaint, Delp brought the following claims against Mazullo: (1) breach of fiduciary duty; (2) conversion; (3) intentional misrepresentation/fraud; (4) negligent misrepresentation; (5) unjust enrichment; (6) violations of sections 5, 10, and 12(a) of the Securities Act of 1933; and (7) violations of sections 401, 403, and 404 of the Pennsylvania Securities Act of 1972. In total, Delp seeks an investment loss in excess of $675,000.00 and punitive damages.

Second, on November 12, 2008, Michael Zoglio ("Zoglio") commenced a civil action in the Court of Common Pleas of Bucks County, Pennsylvania, against seven defendants, including Mazullo, asserting causes of action stemming from Zoglio's investments with defendants in several real estate projects.*fn3

Specifically, Zoglio brought the following claims against Mazullo: (1) breach of fiduciary duty; (2) conversion; (3) intentional misrepresentation/ fraud; (4) negligent misrepresentation; (5) unjust enrichment; (6) violations of sections 5, 10, and 12(a) of the Securities Act of 1933; and (7) violations of sections 401, 403, and 404 of the Pennsylvania Securities Act of 1972. Zoglio seeks compensatory damages, in excess of $50,000.00 and punitive damages.

Essentially, the complaints filed by Delp and Zoglio allege that they invested money through the Doylestown Investment Group ("DIG") to various DIG real estate entities. Delp and Zoglio allege that Mazullo, and the other defendants identified in the complaints, intentionally misrepresented the real estate investment scheme in order to induce Delp and Zoglio to invest in the DIG real estate investments. After the financial investments were made, Delp and Zoglio contend that Mazullo and the other defendants misappropriated their money. Mazullo purportedly prepared the investment agreement and documents for DIG. DIG, in turn, had Delp and Zoglio execute the investment agreements and documents to memorialize their ownership of the DIG entities. Mazullo admits he was the attorney for DIG, as he prepared agreements related to the real estate and other DIG general business documents. (Mazzulo Dep. at 21:12-22; 44:23-24-45:1-3.)

III. Legal Standard

Summary judgment is appropriate if the record establishes "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant meets this burden by pointing to an absence of evidence supporting an essential element as to which the non-moving party will bear the burden of proof at trial. Id. at 325. Once the moving party meets its burden, the burden then shifts to the non-moving party to show that there is a genuine issue for trial. Fed. R. Civ. P. 56(e). An issue is "genuine" only if there is a sufficient evidentiary ...


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