MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,
BEECHER, FIELD, WALKER, MORRIS, HOFFMAN & JOHNSON, P.C., Defendant-Appellant.
Appeal from the Iowa District Court for Black Hawk County, Richard D. Stochl, Judge.
A law firm appeals from a district court decision finding it had failed to prove there was an oral agreement with the insurer to waive the deductible on a professional liability claim settlement.
John R. Walker, Jr., and Kate B. Mitchell of Beecher, Field, Walker, Morris, Hoffman & Johnson, P.C., Waterloo, for appellant.
Patrick M. Roby and Robert M. Hogg of Elderkin & Pirnie, P.L.C., Cedar Rapids, for appellee.
Heard by Vogel, P.J., and Danilson and Mullins, JJ.
The law firm of Beecher, Field, Walker, Morris, Hoffman, and Johnson, P.C. (Beecher) appeals from a district court decision finding it had a contractual obligation to pay the deductible on a professional liability insurance policy following settlement of a lawsuit. It argues the district court erred in finding that it had failed to meet its burden of proving there was an oral agreement with the insurer to waive the deductible. We affirm.
I. Background Facts and Proceedings
The appellee, Minnesota Lawyers Mutual Insurance Company (MLM), is a professional liability insurer. MLM insured the appellant, the Beecher law firm, from August 10, 2008 to August 10, 2009. During this period, a third party, Julius Ashley, sued Beecher over a past debt, alleging violations of the Iowa Fair Debt Collection Practices Act, fraud, abuse of process, breach of contract and intentional infliction of emotional distress. The original damages claim was over $100, 000. As Beecher's insurer, MLM retained Charles Litow to defend Beecher against Ashley's claim. John Walker was Beecher's primary contact regarding the case and Angela Hoppe, a claims attorney, was MLM's.
The insurance policy was a claims-made policy with coverage up to $3, 000, 000 and a deductible of $10, 000 on each claim. The policy included the following terms:
We have the exclusive right to investigate, negotiate and defend CLAIMS seeking DAMAGES against the INSURED for which this policy provides coverage. . . . There is no coverage under this policy to pay any part of a settlement of a CLAIM made without our consent.
We will not settle a CLAIM without the written consent of the INSURED.
The limit of liability will apply in excess of the deductible.
The deductible will be subtracted from the total amount of covered DAMAGES resulting from each CLAIM reported to ...