United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
R. GOODWIN UNITED STATES DISTRICT JUDGE
before the court is the plaintiff's Motion for Summary
Judgment [ECF No. 30]. The intervening defendant, David M.
Turkaly, filed a response in opposition [ECF No. 33], and the
plaintiff filed a reply [ECF No. 33]. The matter is ripe for
adjudication. For the reasons stated below, the
plaintiff's Motion is GRANTED in part
and DENIED in part.
Factual and Procedural Background
plaintiff, ALPS Property & Casualty Insurance Company
(“ALPS”), is a professional liability insurance
carrier that provides malpractice insurance coverage for
lawyers. The defendants are Michael A. Turkaly, individually,
and Michael A. Turkaly, Attorney at Law, LC. Michael A.
Turkaly, Attorney at Law, LC purchased ALPS' professional
liability malpractice insurance for the coverage periods
September 1, 2015 to August 31, 2016 (“2015
Policy”) and September 1, 2016 to August 31, 2017
(“2016 Policy”). Michael Turkaly, individually,
is the only practicing attorney at Michael A. Turkaly,
Attorney at Law, LC. The intervening defendant, David M.
Turkaly, is Michael Turkaly's brother and is the
plaintiff in the underlying lawsuit against Michael Turkaly.
The Underlying Lawsuit
10, 2016, David Turkaly filed a lawsuit against Michael
Turkaly, and twenty-three other parties, in the Circuit Court
of Jackson County, West Virginia regarding Michael
Turkaly's administration of the Declaration of Revocable
Living Trust of Wanda S. LeFebvre (“the Trust”)
as the successor trustee. Compl. Ex. 2, at 2-3 [ECF No. 1-2].
Michael Turkaly is a named beneficiary under the terms of the
Trust. See Id. at 3; Mot. Intervene Ex. 2, at 4 [ECF
No. 14-2]; Compl. ¶ 19 [ECF No. 1]; Ans. ¶ 19 [ECF
15, 2016, David Turkaly mailed a letter to a P.O. Box address
in Evans, West Virginia, notifying Michael Turkaly of the
underlying lawsuit and telling him to expect to receive a
copy of the complaint and waiver of service form from the
Jackson County Clerk of Court. Mot. Intervene Ex. 2, at 21.
On July 18, 2016, those materials were mailed by the Clerk of
Court to the same P.O. Box address. Id. at 10.
Michael Turkaly never responded to either communication and
was personally served with the complaint for the underlying
lawsuit on September 6, 2016. Compl. Ex. 6, at 3 [ECF No.
The Current Lawsuit
Turkaly had professional liability insurance through ALPS
during the 2015 Policy period, which ran from September 1,
2015 to August 31, 2016. On August 31, 2016, ALPS sent
Michael Turkaly an online application to renew his
professional liability insurance for the 2016 Policy period.
Compl. ¶ 23; Ans. ¶ 23. The online application
asked “[a]re you aware of or do you have knowledge of
any fact, circumstance, act, error or omission that could
reasonably be expected to be the basis of the claim against
you, regardless of the merit of such claim, that has not been
previously reported to ALPS?” Compl. ¶ 26; Ans.
¶ 26. Michael Turkaly answered the question in the
negative, although he has since admitted to having knowledge
of the underlying lawsuit at the time by claiming “he
believes he informed ALPS by telephone of the underlying
[lawsuit].” Compl. ¶¶ 24-25; Ans.
September 15, 2016, Michael Turkaly signed an
“Acceptance Page” as Owner, Partner or Corporate
Officer of Michael A. Turkaly, Attorney at Law, LC. Compl.
Ex. 5, at 2 [ECF No. 1-5]. The bottom of the Acceptance Page
contains three Representations and Assurances, one of which
states “[e]xcept as otherwise disclosed in writing or
electronically to ALPS there exists no changes to the answers
and information set forth in the most recent Application the
firm has submitted to ALPS, including all supplements and
attachments thereto.” Id.
making representations on his online application and the
Acceptance Page, on August 31, 2016 and on September 15,
2016, respectively, that he was unaware of any facts that
could form the basis of a claim against him, Michael Turkaly
reported the underlying lawsuit to ALPS by email on September
16, 2016. Compl. Ex. 6, at 2. ALPS is currently defending
Michael Turkaly in the underlying lawsuit pursuant to a
reservation of rights under the 2016 Policy. Compl.
on October 14, 2016, ALPS mailed a Letter of Rescission and
returned the premium for the 2016 Policy to Michael Turkaly.
Compl. ¶ 47. ALPS based its rescission on the assertion
that Michael Turkaly made a “[m]isrepresentation,
omission, concealment of facts, and incorrect statements . .
. in the application for insurance which were fraudulent and
material to the acceptance of the risk and the hazard assumed
by [ALPS].” Compl. Ex. 7, at 2 [ECF No. 1-7].
October 26, 2016, ALPS filed the instant declaratory action
against Michael Turkaly, individually, and Michael A.
Turkaly, Attorney at Law, LC seeking three declarations: (1)
that the 2016 Policy does not provide coverage for the
underlying lawsuit, (2) that the 2016 Policy has been
rescinded by ALPS, and (3) that ALPS is entitled to
reimbursement from Michael Turkaly for costs incurred in
providing Michael Turkaly with a legal defense in the
underlying lawsuit under the 2016 Policy.
Turkaly failed to answer, or otherwise respond to, the
complaint in this case in a timely manner, as evidenced by
the entry of default against Michael Turkaly on January 13,
2017. Clerk's Entry of Default [ECF No. 9]. Michael
Turkaly answered the complaint two weeks later, and David
Turkaly motioned the court to intervene under Rule 24 on
March 10, 2017. Mot. Intervene 1. The court granted David
Turkaly's Motion to Intervene, Mem. Op. & Order [ECF
No. 19], and it is David Turkaly who has been litigating
ALPS' Motion for Summary Judgment. Michael Turkaly has
not responded or otherwise participated in the litigation of
this case since answering the complaint.
obtain summary judgment, the moving party must show that
there is no genuine dispute as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). In considering a motion for
summary judgment, the court will not “weigh the
evidence and determine the truth of the matter.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). Instead, the court will draw any permissible
inference from the underlying ...