Florida Court Holds E&O Insurer Has Duty to Defend Civil Conspiracy Claim

In its recent decision in Philadelphia Indem. Ins. Co. v. Hamic, 2012 U.S. Dist. LEXIS 150067 (M.D. Fla. Oct. 18, 2012), the United States District Court for the Middle District of Florida had occasion to consider whether a legal malpractice insurer has a duty to defend a civil conspiracy claim.

The insured law firm of Hamic, Jones, Hamic & Sturwold, P.A., and an individual member of the firm, were sued for alleged civil conspiracy to commit malicious prosecution, extortion and other harms.  The complaint was subsequently amended to include a malicious prosecution claim only against the individual attorney, and the Middle District of Florida held on summary judgment that the malicious prosecution claim triggered Philadelphia Indemnity Company’s duty to defend the entire suit.  Philadelphia moved for reconsideration solely on the issue of whether it had a duty to defend the Hamic law firm, against which a claim for malicious prosecution had not been asserted.  In other words, Philadelphia sought a ruling that a civil conspiracy claim, in and of itself, did not trigger its policy’s coverage.

In support of this argument, Philadelphia relied on case law in the general liability context standing for the proposition that claims for intentional torts are not covered.  The court acknowledged that most, but not all, claims of intentional torts are not insured under a general liability policy.  The court distinguished typical professional liability policies from general liability policies, finding that professional liability policies typically do provide coverage for intentional torts unless specifically excluded.  It further noted that Philadelphia’s policy did not contain an intentional acts exclusion and therefore provided coverage for intentional torts, although “not specifically malicious prosecution or conspiracies.”

With this in mind, the court considered the nature of a claim for civil conspiracy, the gist of which, it explained, is not the conspiracy itself, but instead the civil wrong accomplished by the conspiracy.  In this case, the “civil wrong” giving rise to the underlying plaintiff’s claim was alleged malicious prosecution, which the court had previously concluded on summary judgment was covered under Philadelphia’s policy.   The court therefore held that the civil conspiracy claim necessarily was covered, explaining that:

Because malicious prosecution falls within the coverage of the policy at issue under the facts as alleged in this case, there is also coverage for the conspiracy to commit malicious prosecution. The tort of civil conspiracy does not require a finding of specific intent to harm the plaintiff or to extract an intended result. Essentially the intent to commit the tort does not also mandate an intent to do the harm that resulted, which was an arrest. Based on these principles, Philadelphia owes a duty to defend the insureds on the claim of conspiracy.