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“Vague” Insurance Policy Requires Insurer to Defend Lawyer in Criminal Case, New York Judge Rules

After a recent ruling by Eastern District of New York Judge Joan Azrack, Fireman’s Fund Insurance Co. will have to provide defense for Jason Kurland, also known as the “Lottery Lawyer,” in the criminal action against him. Kurland is currently facing charges of fraud and unlawful monetary transactions after allegedly swindling tens of millions of dollars from lottery winners and participating in an extortion plot.

Why is this important to legitimate business leaders?

Initially, the insurance company refused to cover Kurland’s defense, stating that the lawyer’s legal liability policy only provided for defense in civil cases. The policy provided coverage to defend against any suit seeking damages, and the company rejected the claim for coverage of defense costs in Kurland’s criminal case because criminal proceedings did not constitute a claim seeking damages. The company also stated that the lawyer’s “criminal conduct [was] for his own benefit,” thus disqualifying him from insurance coverage.

Kurland filed suit against the insurance company in November 2021, arguing that the policy did not only apply to civil suits and should cover his criminal defense because prosecutors were seeking restitution for victims, thus making it a “suit seeking damages.”

Judge Azrack agreed with Kurland, finding the policy to be vague and reasoning that the policy did not define “suit” as applying only to civil proceedings. Additionally, under New York law, the insurance company has a duty to defend Kurland until his conduct is found to be dishonest, fraudulent, criminal, or malicious by a jury or judge’s verdict. This decision is important because depending upon policy language, it may prompt insurers to provide coverage in investigations which carry criminal as well as civil ramifications.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume XII, Number 192
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About this Author

Edward Novak, Polsinelli Law Firm, Commercial Litigation Attorney
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Edward Novak’s problem-solving skills, combined with his years of experience, enable him to assist clients facing government investigations in many areas, including health care, banking, securities, environment, education, government contracting, and civil rights. His many community contacts and the recognition of his legal peers give him credibility in dealing with clients’ adversaries. He is frequently called to serve as an expert witness or mediator in disputes involving business and government.

Ed also assists professionals, such as...

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Brea M. Croteau Government Investigations Attorney Polsinelli Atlanta, GA
Associate

Brea Croteau focuses her practice on internal investigations and white collar crime. She represents corporations and individuals in federal and state regulatory investigations and enforcement matters. Brea’s experience includes assisting clients in responding to government investigations based on alleged violations of civil and criminal laws, including the False Claims Act, and representing both plaintiffs and defendants in a wide variety of civil litigation matters including breach of contract, business torts, fraud and misrepresentation claims.

Prior to joining Polsinelli, Brea...

404-253-6062
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