Insurer owes no duty in dispute between sibling ex-law partners

December 30, 2014

A dispute between a brother and sister as their law firm partnership was dissolving was an employment-related matter covered by an insurer’s exclusionary clause, the Indiana Court of Appeals held Tuesday, reversing a trial court order.

Sarah Moshe and Justin Stimson were partners in Moshe & Stimson LLP in Indianapolis until Moshe told Stimson she intended to leave the partnership. Their professional relationship began to deteriorate. According to the record, Moshe said her brother refused to dissolve the partnership, seized control of firm assets and case files, refused to pay her, and began making accusations about her personal integrity and professional competence.

Moshe ultimately sued Stimson for defamation, an accounting of the firm’s assets, an injunction and damages. The trial court ordered the insurer, Peerless Indemnity, to defend and indemnify Stimson against his sister’s lawsuit.

“On appeal, Peerless argues that the employment-related exclusionary clause is unambiguous and bars coverage. We agree,” Chief Judge Nancy Vaidik wrote in Peerless Indemnity Insurance Co. v. Moshe & Stimson Llp, Sarah Moshe, and Justin Stimson,  49A02-1404-PL-244. “Because Justin’s alleged actions toward his sister were employment-related, the exclusionary clause applies. We reverse the trial court and remand with instructions to enter summary judgment in Peerless’s favor on the issue of coverage.

“… The policy at issue was designed to protect the siblings in suits brought by third parties – it was not meant to protect one against the other in a suit between the two,” the court held.



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