United States District Court, N.D. West Virginia
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S
MOTION TO DISMISS [Dkt. No. 10] AND STAYING CASE
M. KEELEY UNITED STATES DISTRICT JUDGE
before the Court is a motion by the defendants S. Sean
Murphy, Esq. and S. Sean Murphy, PLLC (collectively,
“Murphy”) to dismiss the complaint filed by the
defendant, ALPS Property & Casualty Insurance Company
(“ALPS”) (Dkt. No. 10). For the following
reasons, the Court DENIES the motion, and
for good cause STAYS the case pending
further development in the state court action.
Court's recitation of the facts is taken from the
complaint. As it must, at this early stage of the
proceedings, the Court construes those facts in the light
most favorable to the non-moving party, ALPS. See
De'Ionta v. Johnson, 708 F.3d 520, 524 (4th Cir.
1, 2019, ALPS filed a complaint against Murphy seeking a
declaratory judgment that its insurance policy does not
afford coverage to Murphy with respect to a potential claim.
In addition, ALPS seeks a declaration that it has no duty to
defend or indemnify Murphy under the policy with respect to a
potential claim (Dkt. No. 1).
The Wire Transaction
dispute arises from Murphy's representation of Betty
Parmer (“Parmer”) in a collection action
involving United Bank, Inc. (“United Bank”),
styled United Bank, Inc. v. Parmer, Civil Action No.
17-C-210 (Cir. Ct. Monongalia Cty., W.Va.) (“the United
Bank case”) (Dkt. No. 1 at 2). On April 4, 2019, Parmer
and United Bank settled their dispute, with Parmer agreeing
to pay United Bank a confidential settlement amount.
April 11, 2019, at 7:06 A.M., based on custom and practice of
counsel in the state case, Murphy requested wire instructions
via email for the settlement payment from counsel for United
Bank, Sean P. George (“George”). Id. At
9:39 A.M. the same day, George responded to Murphy's
email, stating “Will request them and forward on
receipt.” Id. at 3. At 2:41 P.M. the same day,
a person or persons posing as George provided Murphy with
wire instructions indicating that the payment should be
transferred to Chase Bank. Id.
provided the Chase Bank instructions to Parmer's bank,
Fulton Bank in Harrisburg, Pennsylvania. Id. On
April 15, 2019, Fulton Bank, on behalf of Parmer, wired the
settlement payment according to the wire instructions
provided by Murphy. Id. Thereafter, on May 3, 2019,
George informed Murphy that United Bank had never received
the payment. Id. The settlement payment was not
recovered, and the loss was reported to Fulton Bank, Chase
Bank, and the Federal Bureau of Investigation. Id.
23, 2019, George asserted that the wire instructions sent by
Murphy to Fulton Bank were incorrect, stating he had not
provided Murphy with “bogus instructions” and
alleging that “Ms. Parmer's bank and [Murphy] had a
duty to verify the instructions as accurate before acting
upon them.” Id. That same day, George demanded
that Murphy contact law enforcement and participate in a
status conference in the United Bank suit. Id.
The Insurance Policy
issued Lawyers Professional Liability Insurance Policy No.
APLS15426-7 to the Murphy Law Firm for the policy period
August 31, 2018 to August 31, 2019. Id. The policy
provides coverage on a claims made and reported basis.
Id. at 5. Under the policy, a “claim” is
defined as “a demand for money or services including,
but not necessarily limited to, the service of suit or
institution of arbitration or alternative dispute resolution
proceedings against the Insured[.]” Id. at 6.
A claim does not mean nor does it include any demand, service
or proceeding arising from or in connection with any actual
4. Security breach, unauthorized access, unauthorized use or
misuse of any Computer Systems; [or]
5. Theft, unauthorized use or misuse of any login
information, access information or identification, or
personally identifiable information including, but not
necessarily limited to, any password, username, social
security number or other code or identified intended for use
in accessing any Computer System, account, website or the
systems” is defined as “computers, information
systems, servers, hardware, software, and associated input
and output devices, data storage devices, networking
equipment, back up facilities and any other associated or