Coverage Barred By Related Claim Made Prior To Policy Period And Prior Knowledge Exclusion

Applying New York law, the United States District Court for the Southern District of New York has held that no coverage exists under a professional liability policy because the lawsuit for which the insured sought coverage was based on largely the same facts, circumstances, and alleged legal violations as a claim made before the policy's inception. Pine Mgmt. Inc. v. Colony Ins. Co., 59 F.4th 364, 2023 WL 2575082 (S.D.N.Y. Mar. 20, 2023).

Prior to the policy's inception, the insured management and development company received a letter from the claimant's attorneys advising it of claims against it arising from the insured's management and asserting that the insured had breached its fiduciary duties, had not acted in good faith, had breached contracts, and demanding an accounting. Subsequently, also during the policy period, the insured was sued in a lawsuit by ten companies it managed alleging breach of contract, breach of fiduciary duty, inspection of books and