Ninth Circuit finds question on professional liability application elicits statement of opinion

Ninth Circuit finds that reasonable persons could conclude that question on professional liability insurance application regarding prior claims elicits a statement of opinion.  In James River Ins. Co. v. Schenk, ----F.3d -----, 2008 WL 1836729 (9^th Cir. 2008), the Court reversed a District Court of Arizona ruling permitting denial of coverage because the insured’s omission constituted legal fraud. 

Arizona allows an insurer to rescind an insurance policy due to misrepresentations in applications if (1) the misrepresentation is fraudulent, (2) the misrepresentation is material and (3) the insurer would not have issued the policy had the true facts been known. See A.R.S. section 20-1109.  If a question elicits a factual response, evidence of intent to deceive is not necessary.  If the question elicits a statement of opinion, evidence of intent to deceive is necessary.

 The question at issue in James River asked whether “[a]fter inquiry,” any lawyers in the firm were “aware” of any circumstances “as to any incident which may result in a claim being made against” the firm.  The court found that this question called for a subjective determination.  Therefore, summary judgment was improper because there was no evidence of intent to deceive. 

Christy Brown, Esq.

View News Archives  2005 2006 2007 2008 --Select Year--

Jun 25 2008 Rule 702 of the Arizona Rules of Evidence has, since its inception, helped define the standard by which Arizona courts determine whether expert witness testimony proffered by a particular expert witness will be allowed.  The rule provides as follows: "If scientific, technical, or other specialized knowledge will assist the Trier of Fact to understand the evidence or deter

May 6 2008 On May 6 David Childers addressed the 2008 Arizona Captive Insurance Conference regarding legal issues to be considered in the formation of an Arizona captive.

May 1 2008 Ninth Circuit finds that reasonable persons could conclude that question on professional liability insurance application regarding prior claims elicits a statement of opinion.  In James River Ins. Co. v. Schenk, ----F.3d -----, 2008 WL 1836729 (9th Cir. 2008), the Cour

Apr 1 2008 On March 22, 2008, the Arizona Department of Insurance issued Regulatory Bulletin 2008-03 requiring that a Uniform Employee Health Status Questionnaire be used by all Accountable Health Plans ("AHPs") that seek to obtain health status information from employees of a small employer. ARS § 20-2305(C) require that all AHPs begin using such a uniform questionnaire by January 1, 2009.

Jul 11 2007 Motor vehicle crashes are the leading cause of death for teenagers in Arizona and nationwide. Statistics demonstrate that teen drivers as a group are among the worst drivers, and that Arizona has some of the weakest training requirements for teenage drivers in the nation. Recent studies illustrate that graduated drivers licensing laws can reduce fatal crashes for teen drivers by eleven to twenty p

Jul 5 2007 Do pleadings standards favor defendants? Read Full Story Here

Alternative Dispute Resolution   Low & Childers provides cost effective and quick resolution o Read More >>

General Contact Information   Low & Childers P.C. 2999 North 44th Street Suite 250 Phoenix, Arizona 85018 Telephone: (602) 266-1166 Facsimile:   (602) 808-8835