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Notice of claim sufficient to exclude coverage from retroactive professional insurance policy.

Jackson v. Middleton
Circuit Court of the City of Norfolk, Virginia, Docket No. CL 14-104

by Gregory S. Emrick, Associate
Semmes, Bowen & Semmes (

Available at:

On November 26, 2011, Kortney Jackson, a mentally disabled autistic adult, was burned severely while in the care of Antiniece Middleton, an employee/independent contractor of Community Direct Services, Inc. (“CDS”). Shortly thereafter, Carolyn Jackson, as mother, guardian and next friend of Kortney Jackson, retained counsel, Poole Mahoney, PC (“Plaintiff’s counsel”). On December 20, 2011, CDS received a letter from Plaintiff’s counsel advising them of an attorneys’ lien related to the injury and requesting that the correspondence be provided to CDS’s insurance carrier. On February 23, 2012, Certain Underwriters at Lloyd’s of London (“Lloyds”) issued a general and professional liability insurance policy to CDS that was back dated to February 23, 2009. The policy also contains exclusion for any claim which:

As of the inception of the Underwriters’ first Policy period, had resulted in Bodily Injury… Personal Injury…of which an Insured was aware and could have foreseen might result in a claim.

Lloyds sought a declaration from the Circuit Court for the City of Norfolk that it did not owe coverage for Jackson’s claim against CDS. Lloyds filed a motion for summary judgment. The Honorable Mary Jane Hall noted that in Virginia, summary judgment is a drastic remedy and courts are cautious to “avoid having discovery supplant the taking of evidence at trial.” Id., at *4. Despite this position, the Court reviewed the facts and noted that “any interpretation of the demand letter as something other than [plaintiff] counsel’s statement of intent to file a lawsuit against CDS would be ‘forced, strained or contrary to reason.’” Id. at *6. Because the plain reading of the contract excluded any claims that CDS could have foreseen might result in a claim and the letter put them on notice of such a potential claim, coverage for Jackson’s loss was properly denied.

The Court then dismissed the Plaintiff’s argument that Lloyds had waived the right to deny coverage by failing to timely give notice to the claimant of a breach of the insurance contract resulting in the loss of coverage, as required by Virginia Code § 38.2-2226. The Court noted that the statute provided consequences for an insurer’s failure to give timely notice to a claimant of its insured’s breach. In this case, there was no breach, only a question of whether the policy covered the claim.

Based upon the language of the contract, and the notice of the potential claim to CDS of an incident that pre-dated the policy, the Court held that there was no coverage for the claim. The Court then granted Lloyds’ motion for summary judgment.