Publications

A West Virginia federal district court ruled that rescission of an insurance policy was warranted but that the insurer was not entitled to reimbursement of defense costs expended by the insurer prior to rescission.  ALPS Property & Casualty Ins. Co. v. Turkaly, 2018 WL 385195 (S.D.W.Va. Jan. 11, 2018).

Attorney Michael Turkaly sought coverage from professional liability insurer ALPS for malpractice claims filed against him during the policy period.  ALPS initially defended Turkaly under a reservation of rights, but later sought to rescind the policy based on alleged misrepresentations in the application.  ALPS filed the instant suit, seeking a declaration as to rescission and reimbursement of costs incurred in defending Turkaly in the underlying suit.

The court ruled that rescission was proper under West Virginia law because Turkaly made material misrepresentations in his policy — namely, that he was unaware of any facts that could form the basis of a claim against him, when in actuality, he had knowledge of the underlying suit against him.  However, the court denied ALPS’s claim that it was entitled to reimbursement of defense costs under the policy.  The court reasoned that “[b]ecause the 2016 Policy is rescinded and void ab initio, it cannot form the basis of liability, for either ALPS or Michael Turkaly.”