A recent ruling from the Franklin County Court of Common Pleas in McFarland v. Diccucio (Case No. 23-CV-001700) serves as a critical reminder for law firms and practitioners regarding insurance applications and warranties.
The Case: Ohio Bar Liability Insurance Company (OBLIC) sought a declaratory judgment after an insured law firm failed to report an ongoing federal lawsuit and judgment during the policy application process.
The Ruling: The Court ruled that the inaccurate warranties in multiple policy applications rendered the policies void ab initio—meaning they were treated as if they never existed. The Court determined that:
- The policies explicitly incorporated the application information as a warranty and warned that inaccurate application information would void the policy;
- At the time of each relevant policy application, the firm was being sued or was subject to a judgment in an Illinois federal court;
- The firm’s policy applications nonetheless denied the existence or knowledge of any circumstances that might result in a claim;
- The nondisclosure beached the warranties, voided the policies, and resulted in no coverage for subsequent legal malpractice claims.
Congratulations to Kurt Anderson, a Partner in CRUG’s Cleveland Office, who successfully represented OBLIC in obtaining summary judgment.
