27 décembre, 2006 15:56
Insurer Can Rescind Convicted Lawyer's Malpractice Coverage
New York Law Journal
12-26-2006
A federal judge in Manhattan has permitted a professional liability insurer to rescind coverage for a lawyer recently sentenced to four years in prison for participating in an elaborate corporate fraud scheme.
John Fasciana was convicted in July 2005 on federal charges relating to the diversion to his law firm's account of hundreds of thousands of dollars sent as payment to Electronic Data Services Corp. (EDS) between 1995 and 1998.
The lawyer was sentenced last month along with Joseph Amato, a former chief financial officer of EDS's Global Securities Industry Group who also participated in the scheme.
Several months prior to his January 2001 indictment, Fasciana had applied to the Chicago Insurance Co. for a professional liability insurance policy. On the application, he indicated there were no circumstances at the time that could result in a claim against his firm, Fasciana & Associates.
Along with the criminal charges in the Southern District, Fasciana had faced a civil suit by EDS in Texas federal court. Chicago Insurance's policy only covered his defense in the civil case.
Southern District of New York Judge Loretta A. Preska ruled last week on a summary judgment motion that the insurer was entitled to rescind the policy and could seek reimbursement of all legal fees it paid on behalf of Fasciana. She also said Chicago Insurance was entitled to a declaration that it was no longer required to defend Fasciana in the Texas action.
"[N]o reasonable factfinder would find that an insurance company would have issued the policy Chicago Insurance issued had it known of the true facts," the judge wrote in Chicago Insurance Co. v. Fasciana, 04 Civ. 7934.
In ruling for the insurer, Preska said Fasciana's conviction precluded him from arguing that he was unaware or innocent of fraud against EDS.
She also rejected as hearsay Fasciana's assertion that he had been told by agents of the insurer to only mention on his application those circumstances "likely" to lead to claims, rather than every possible claim.
"[E]ven accepting for today's purposes Fasciana's claim that he only had to list a 'likely' claim, no reasonable factfinder could find that the fraudulent activities which he was convicted of engaging in with respect to EDS were not likely to result in a claim," the judge wrote.
Fasciana also had argued that Chicago Insurance waived its right to rescission by initially assigning him counsel in the Texas suit. But Preska said Chicago had reserved its rights in a letter it sent to Fasciana shortly after it was notified of the Texas suit.
Chicago Insurance was represented by Kevin Cavaliere of White Plains' Stein & Cavaliere. Fasciana was represented by Roger Sanders of Sanders, O'Hanlon & Motley in Sherman, Texas.
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If my memory severs me correctly, Data Con was the company that screwed up
The cards sent out to, Breast Implant victims to vote on, The Settlement Plan. Remember many of, you received none; an other had 4-5 arrive in there mail? Was this a mistake or another of, Dow Chemical/Cornings nasty tricks? IMHO YES!Dow meant to confuse the women and men filing against them for faulty medical devices Dow Chemical made in there labs- Toxic Silicone Breast Implants, Dow's own data and Documents/experiments prove.GIGI
