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Claims Made Policy May Not Respond to Claims Made After Expiration of \\nthe Policy\\n\\nTwin City Fire Insurance Company sold a malpractice insurance policy to \\nJohn S. Xydakis, an attorney and one of the Defendants. Xydakis made \\nclaims under the policy based on lawsuits and motions filed against him \\nin Illinois state court. Twin City sought a declaratory judgment that it\\n owes no insurance coverage to Defendants for these claims or, in the \\nalternative, rescission of the policy. In Twin City Fire Insurance \\nCompany v. Law Office Of John S. Xydakis, P.C., et al., No. 18 C 6387, \\nUnited States District Court, N.D. Illinois, Eastern Division (March 20,\\n 2023) the USDC resolved the dispute.

BACKGROUND\\n\\nUnderlying Lawsuits\\n\\nThe Chen Lawsuit.\\n\\nFiona Chen Consulting Company (\\u201cChen Consulting\\u201d) sued Xydakis for \\nfailing to pay retained expert witness fees.\\xa0All the acts and conduct \\nrelated to the Chen Lawsuit occurred between January 2012 and November \\n2012.\\n\\nThe Spiegel Motions for Sanctions.\\n\\nLitigants in a separate set of lawsuits (collectively the \\u201cSpiegel \\nLawsuits\\u201d) brought three motions for sanctions The presiding Cook County\\n judge ruled on all three motions and entered judgment against Spiegel \\nand Xydakis for over $1,000,000.\\n\\nThe Klein Lawsuit.\\n\\nOn August 14, 2019, Tiberiu Klein filed a complaint against Twin City \\nand Xydakis alleging legal malpractice, breach of contract, and breach \\nof fiduciary duty. \\n\\nThe Twin City Insurance Policy\\n\\nIn December 2016, Xydakis applied for legal malpractice insurance \\ncoverage from Twin City. Twin City underwrote and issued a \\nclaims-made-and-reported Lawyers\' Professional Liability Policy to the \\nLaw Office of John S. Xydakis (the \\u201cPolicy\\u201d).\\n\\nDISCUSSION

Under Illinois law, the insurer\'s duty to defend arises when the facts \\nalleged in the underlying complaint fall within, or potentially within, \\nthe policy\'s provisions. The insured bears the burden of proving that \\nits claim falls within the policy\'s coverage. Once the insured has \\nestablished coverage, the burden shifts to the insurer to prove that a \\nlimitation or exclusion applies.\\n\\nXydakis had until March 27, 2018 to make claims under the Policy. The \\nChen Lawsuit, the Spiegel Motions for Sanctions, and the Klein Lawsuit \\neach fall outside the Policy\'s scope of coverage, either for underlying \\nconduct occurring before its retroactive date or for claims made after \\nits expiration.\\n\\nESTOPPEL\\n\\nXydakis argued that a genuine issue of material fact exists as to \\nwhether Twin City should be estopped from denying coverage. Estoppel \\nonly applies where the insurer has breached its duty to defend.