Legal malpractice insurance coverage; Policy notice requirements; Whether the insurance contracts were “ambiguous”; Policy exclusion

[This appeal was from the ED-MI.] The court affirmed dismissal of plaintiff-Bridges’s claims for legal malpractice insurance coverage because the insured law firm failed to give one of the insurers notice of the potential claim during the Policy Period, and coverage was barred under an exclusion in the other insurer’s policy. Bridges hired the law firm (not a party to this case) to represent her in a medical malpractice case. That case was dismissed when the firm failed to respond to a summary judgment motion. Bridges sued for legal malpractice. The firm had legal-malpractice insurance with three insurers: defendants-Maxum Indemnity and Landmark American Insurance, as well as a nonparty to this appeal (StarStone). All three refused to defend or indemnify as to Bridge’s claim. The firm settled with her, assigning her all its rights under the policies. She then filed this suit, pursuing declaratory judgment and contract breach claims under all three policies. The district court granted Maxum’s and Landmark’s motion to dismiss. Bridges and StarStone reached an agreement to dismiss. On appeal, after reviewing Michigan contract law, the court held that Maxum’s contract language was not ambiguous. “Under Section VII.B., a ‘condition precedent’ to coverage is that [the firm] must ‘give written notice’ of a claim to Maxum ‘no later than 60 days after the end of the “Policy Period.”’” There was an exception under which “an actual claim will be deemed timely even if it is reported more than 60 days after the end of the Policy Period as long as a potential claim arising from the same alleged malpractice was previously reported during the Policy Period.” The firm did not report an actual claim by Bridges until long after the end of both the Policy Period (5/18 to 5/19) and the Optional Extended Reporting Period (7/19 to 7/21). But it “had previously reported a related potential claim by Bridges” during the latter period. The court held that because “no potential claim was reported between” 5/18 and 5/19, and the firm’s “notice of Bridges’s potential claim occurred only thereafter, the notice occurred too late for the exception to apply.” It further found that a “discrepancy between the endorsement’s reference to a ‘Supplemental Extended Reporting Period’ and the main Policy’s reference to an ‘Optional Extended Reporting Period’” was a scrivener error. It also held that coverage was not available under the Landmark policy as a matter of law.