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Insurer must pay defense costs for attorney charged with embezzlement


An attorney charged with embezzling funds from lottery winners is entitled to defense costs under his professional liability policy, a U.S. District Court ruled last week.

Jason M. Kurland was an equity partner at Rivkin Radler LLP, according to last Wednesday’s ruling by the U.S. District Court in Central Islip, New York, in Jason M. Kurland vs. Fireman’s Fund Insurance Co.

Allianz unit Fireman’s Fund issued a “lawyer’s professional liability claims-made insurance policy” for the period from Jan. 25, 2020, to Jan. 25, 2021, according to the ruling.

The coverage limited liability to $10 million for each claim and $20 million in the aggregate, subject to a $500,000 self-insured retention, according to the policy.

In August 2020, a federal grand jury indicted Mr. Kurland on charges of conspiracy to commit wire fraud, wire fraud, honest services wire fraud, conspiracy to commit money laundering, and money laundering. The indictment alleged, in part, that he and co-defendants conspired to defraud three lottery winners of their property and their right to his “honest service” as their attorney, the decision said

According to a statement issued in August 2020 by the U.S. Attorney’s Office in Brooklyn, the lottery winners, who lost $107 million, provided him with funds to safely invest.

Some money was funneled back to the lottery victims as “interest payments,” while other funds went to support the defendants’ lavish lifestyles, the statement said.

Mr. Kurland sought coverage for legal fees and costs, and Fireman’s Fund denied coverage. He filed suit against the insurer, which filed a cross motion for summary judgment.

The court ruled in Mr. Kurland’s favor.

The summary judgment motions turned “solely” on whether the underlying action was a claim seeking damages, the ruling said. The court concluded it was, citing ambiguity in the policy language.

The policy’s ambiguous provisions “would require Fireman’s Fund to defend a civil suit seeking both monetary damages and injunctive relief,” the ruling said. “The Policy is similarly ambiguous as applied to any criminal indictment that seeks both ‘damages’ and imprisonment — a form of non-pecuniary relief,” it said. 

The court ordered Fireman’s Fund “to immediately pay, on a current and ongoing basis and up to the Policy’s Limit of Liability” Mr. Kurland’s defense costs in the underlying action.

Mr. Kurland’s attorney, Andrew N. Bourne, a partner with Cohen Ziffer Frenchman & McKenna LLP in New York said in a statement, “We are grateful that the court read the policy as we did. Professional liability policies such as the one at issue can provide coverage for criminal defendants."

The insurer’s attorneys did not respond to requests for comment.