Underwriters Win Significant Victory Over Beazer Homes

FHAM represented Certain Underwriters at Lloyd’s, London in their recent victory over Beazer Homes in the Superior Court of Fulton County. Beazer is a Fortune 500 Company and is one of the top residential homebuilders in America. Beazer filed suit against Certain Underwriters contending that its insurance broker successfully negotiated an endorsement to add three newly acquired companies to Underwriters’ excess liability insurance contract.


Certain Underwriters moved for summary judgment because a condition of the endorsement to add the newly acquired companies was for the parties to agree to the wording of a known loss exclusion, which was never done. Beazer contended that by considering several documents the court should find an enforceable written contract existed and that any ambiguity as to the wording of the known loss exclusion in that contract should be construed against Certain Underwriters.


The trial court granted Certain Underwriters’ Motion for Summary Judgment, finding that Beazer and Underwriters attempted for several years to agree to language for the wording of a known loss exclusion, and despite repeated attempts, the parties were unable to agree to the language of the exclusion. The court stressed that the testimony from Beazer’s insurance broker who negotiated the coverage showed that the parties never agreed on the wording of a known loss exclusion. In addition, Beazer’s insurance brokers who negotiated the coverage testified that there was no way for this Court to know the wording of the known loss exclusion to be agreed by the parties. Thus, the trial court found there was no written agreement to a known loss exclusion.


Bob McLaughlin and Terry Howell led the representation of Underwriters, with the assistance of several associates, including Andy Diamond and Jonathan Kramer, and paralegals Pam Bader and Jennifer Hronek.

FHAM Wins Professional Liability Case...

FHAM Wins Professional Liability Case in Which the Georgia Court of Appeals Decides Issue of First Impression

In a case of first impression in Georgia, the Georgia Court of Appeals has decided that a professional liability policy does not cover an attorney’s alleged liability for breaching a fee-splitting contract. Garland v. American Safety Casualty Insurance Company, 2007 WL 2305475 (Aug. 14, 2007). FHAM attorneys, Terry Howell and Jonathan Kramer, represented American Safety against a suit by an Atlanta criminal defense attorney, demanding that American Safety reimburse him under its professional liability policy for over $100,000 in defense costs expended in winning a Florida case.

In the underlying lawsuit, a Florida attorney asserted that the Atlanta attorney owed compensation to the Florida attorney under an alleged oral fee referral contract. American Safety denied coverage because the underlying lawsuit did not involve performance of legal services as required by the policy and because the exclusion in the policy for damages arising from the restitution of fees applied. The Atlanta attorney sued American Safety, arguing that American Safety had wrongfully refused to defend him. FHAM convinced the trial court to dismiss the suit because there was no possibility of coverage under the professional liability policy and therefore no duty to provide a defense.

The Georgia Court of Appeals affirmed, holding:

Here, given the fact that the Florida attorney’s lawsuit against Garland and his firm
involved the alleged breach of a fee-splitting agreement incidental to the firm’s business as a law firm, the claim did not arise from Garland’s or his firm’s acts or omissions in rendering professional services as lawyers and was not covered by the policy issued by American Safety.

2007 WL 2305475, *3. The Court of Appeals relied heavily on the fact that many courts in the United States have held that contractual fee disputes do not constitute the rendering of professional services. Id. at *1.