Alaska Supreme Court Opinions made Available by Touch N' Go Systems and Bright Solutions

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website.
  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Tush v. Pharr (4/25/2003) sp-5684

Tush v. Pharr (4/25/2003) sp-5684

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     email corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

TRUDY TUSH,                                  )
                              )    Supreme Court No. S-10229
             Appellant,                 )
                              )    Superior Court No.
     v.                       )    3AN-99-10897 CI
                              )
JOHN C. PHARR, THOMAS P.           )    O P I N I O N
OWENS, JR., and OWENS &            )
TURNER, P.C.,                                 )     [No.  5684  -
                              April 25, 2003]
                              )
             Appellee.                  )
_______________________________    )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, John E. Reese, Judge.

          Appearances:   Kristi Nelson  Pennington  and
          Richard    D.   Pennington,   Pennington    &
          Associates,  Anchorage, and Gary  Eschbacher,
          G.R.  Eschbacher Law Offices, Anchorage,  for
          Appellant.   David Karl Gross and Timothy  J.
          Petumenos, Birch, Horton, Bittner and Cherot,
          Anchorage, for Appellee John C. Pharr.  James
          D. Gilmore, Gilmore & Doherty, Anchorage, for
          Appellees  Thomas P. Owens, Jr. and  Owens  &
          Turner, P.C.

          Before:    Matthews,  Eastaugh,  Bryner,  and
          Carpeneti,  Justices.  [Fabe, Chief  Justice,
          not participating.]

          CARPENETI, Justice.




I.   INTRODUCTION

          Trudy  Tush  appeals the trial courts grant of  summary

judgment  against her on four separate motions.  Because  genuine

issues of material fact remain on all four, we reverse the  order

of  the  superior court granting summary judgment on each  motion

and  we  remand  the  case  to  the superior  court  for  further

proceedings.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          Trudy  Tush  and  her former husband  Larry  Tush  sued

Hector  Perez to evict him.  Tush owns numerous rental properties

and  has been involved in real estate investment for over  twenty

years.  Perez was one of her tenants.

          On  August 23, 1993 Tush, acting pro se for herself and

Larry,  sued  to  evict Perez from her rental  property  at  1201

Chugach  Way  in  Anchorage, a single family  residence  (Chugach

property).1   Perez  obtained  legal representation  from  Alaska

Legal   Services.   Perez  answered  Tushs  complaint  and  filed

numerous   counterclaims   against  Tush   alleging   intentional

infliction of emotional distress, willful diminution of essential

services, breach of the covenant of good faith and fair  dealing,

harassment,   retaliatory  eviction,  unlawful   termination   of

utilities, and failure to maintain and repair the premises.  Tush

then  hired  attorney John C. Pharr to represent her  and  Larrys

interests.

          Throughout  her real estate investments, Tush  and  her

spouse managed the properties by themselves.  To obtain insurance

for  the  properties, Tush would normally telephone an  insurance

broker and attempt to purchase whatever her bank required her  to

carry,  while investigating to find the cheapest price.  I  would

tell them what I wanted and . . . they would get it for me.

          Tush had rental property insurance, including liability

coverage,  for the Chugach property.  Tush purchased this  policy

from the Umialik Insurance Company.  Umialik covered a number  of

Tushs properties.  After the policy was obtained, certain tenants

filed  claims  against Tush.  One tenant from 1117  Chugach  Way,

which  Tush  also owned, alleged improper notice of eviction  and

          intentional infliction of emotional distress.  Tush notified her

insurance  broker,  who notified Umialik of the  claim.   Umialik

hired  Tush an attorney, provided her a defense, and settled  the

claim for $5,000.

          Umialik subsequently refused to renew the policy.  Tush

then  sought  coverage for her properties from  other  companies.

She  eventually  decided on State Farm Fire and Casualty  Company

(State  Farm).  Tush applied for insurance from State  Farm  over

the  telephone.  Tush obtained a separate policy for the  Chugach

property  from other properties she owned on Chugach Way.   Tushs

application  was filled out by an insurance agent  speaking  with

Tush  over  the  phone.  Tush never signed the application.   The

application states that Tush had not had a loss in the last three

years, had never had an insurance carrier deny renewal, and  that

Tushs  last insurance company was Liberty National.  All of these

statements are false.  State Farm issued Tush a policy including,

among  other things, liability coverage with limits of $1,000,000

per occurrence.

          Tush  was  deposed  on September 15 and  September  20,

1993.  At the deposition, Tush was asked questions regarding  her

insurance  coverage for the Chugach property.  Pharr objected  as

to  relevance, and Tush largely refused to respond.2 Later,  Tush

was  marginally more forthcoming on the subject of insurance, but

she answered the question whether she had liability insurance  on

the  premises at 1201 Chugach with, No, its just the value of the

house.

          In  November  Pharr  received a settlement  offer  from

Perez  for  $25,000, including attorneys fees and  costs.   Pharr

alleged  that he discussed the offer with Tush in his office  and

then  mailed it to her for documentation purposes.  Pharr further

claimed that when he showed it to Tush she laughed and tossed  it

down on the desk.  According to Pharr, no further discussion  was

held  regarding  this  settlement offer.  Tush  denied  that  the

$25,000 settlement offer was ever communicated to her.

          There  was  then no action in the Perez  lawsuit  until

October  1994,  when  Dan Fitzgerald entered  his  appearance  on

behalf  of Perez by filing a second amended answer and additional

counterclaims.   Pharr  claims that,  at  around  this  time,  he

discussed  the new counterclaims filed by Fitzgerald  with  Tush.

Pharr recounted their conversation at his deposition:

          its   been   my  experience  that   insurance

          actually  draws lawsuits because the claimant

          is  after the insurance.  Its more of  a  fat

          easy   target  than  trying  to  execute   on

          somebodys property, for example.  So they may

          you  know, the other side may have been under

          some impression that there was insurance, and

          that   they  were  going  to  go  after  that

          insurance.   And  once they found  out  there

          wasnt  any  insurance, theyd  be  discouraged

          from pursuing it.

On December 28, 1994 Fitzgerald successfully had the case removed

to the superior court.

          Tush  and  Larry divorced in 1995.  Tush  believed  the

divorce  created a conflict of interest in Pharrs representation.

Because  of  this perceived conflict of interest, Tush terminated

Pharrs services on January 4, 1995, instructing him to do nothing

further  in  her  case.   There was no other  reason  why  Pharrs

services were terminated; Tush was generally happy with the  work

he had done in the case.  At no time during Pharrs representation

of  Tush  did  Pharr  ever  ask to see  any  of  Tushs  insurance

policies,  nor  did  he himself investigate  or  direct  Tush  to

investigate  whether  her insurance would  cover  any  of  Perezs

claims.

          On January 24, 1995 Pharr received Perezs second set of

requests  for  production.  Two requests asked for production  of

Tushs insurance policies.  Although these requests for production

arrived  in Pharrs office after Tush had terminated his services,

Pharr  accepted  service  of  the document  because  he  was  the

attorney  of record and had not received notice of who Tushs  new

attorney would be.  Pharr, however, did not attempt to answer the

discovery request, mailing it to Tush with an explanation of when

her responses were due.3  On February 6, 1995 Pharr sent a letter

to Fitzgerald attempting to discourage him from pursuing the case

based  on  his  belief  that  there  was  no  insurance  coverage

involved.   This letter was copied to Tush.  Pharr also  answered

Perezs new counterclaims (filed by Fitzgerald on February 20)  to

protect   Tushs   interests   while   she   was   obtaining   new

representation.

          Robert  Reiman entered his appearance as Tushs attorney

in February 1995.  In May 1996 Perez made an offer of judgment to

Tush  for $50,000.  Reiman alleged that Tush was informed of this

offer but refused to accept it.  In January 1997 the parties  had

a settlement conference and Tush offered $20,000 in an attempt to

settle the case.  This offer was refused.  At a second settlement

conference Perez offered to settle for $450,000.  Tush  countered

with  a piece of property worth approximately $50,000 and $20,000

in  cash  paid  out  over a period of time.  Perez  then  made  a

counteroffer  of  $400,000.   This offer  was  not  accepted  and

settlement negotiations between the parties ended.

          While  Reiman  represented Tush,  Fitzgerald  moved  to

compel the answers  to the second set of requests for production.

Reiman  alleges he produced the declaration page from  the  State

Farm policy.4  Although Reiman thought it may provide coverage on

one  or  more of the claims, he did not attempt to contact  State

Farm  and tender the claim.  Reiman alleges he suggested to  Tush

that she tender the claim to State Farm and that she told him  in

response that she did not want to do so.

          Tush fired Reiman and replaced him in January 1997 with

attorney Tom Owens.  Owens accepted representation in the  matter

after a continuance of the trial date was obtained by Reiman.

          The  Perez lawsuit went to trial.  In November  1997  a

          jury found in favor of Perez and awarded a verdict, including

punitive damages, in excess of $1,600,000.

          On  April 8, 1998 Tush received notice that State  Farm

would no longer be insuring her other properties under a separate

policy  due to misrepresentation regarding prior cancellation  or

refusal to issue or renew similar insurance by an insurer.

          Tush again retained new counsel.  Counsel then tendered

the  Perez  claim to State Farm on February 4, 1999.  State  Farm

undertook  an investigation to determine coverage.   On  February

22,  1999  State  Farm  disclaimed coverage under  Tushs  primary

insurance policy because the claim was not tendered on  a  timely

basis,  prejudicing  its  ability to  defend  and  breaching  the

policys   prompt  reporting  requirement.   State  Farm   further

investigated and concluded that the Tushes were not covered under

any  of  their  other insurance policies for the Perez  judgment,

because  of both the delay in tendering the claim and the policys

intentional acts exclusion.

     B.   Proceedings

          A.   In October 1999 Tush filed the present case alleging that

her  attorneys,  Pharr, Reiman,5 Owens and Owens &  Turner  P.C.,

acted  below the standard of care during the course of the  Perez

lawsuit  by  failing  to tender her claim  to  State  Farm.   She

alleged  causes of action for professional negligence, breach  of

fiduciary duty, and breach of contract.  Tush contended that  had

State Farm been given notice of the counterclaims, it would  have

acted on them under Tushs insurance policy and provided a defense

and either settled the claim or paid any verdict.

          Four  motions  for summary judgment were filed  by  the

defendants in this matter.  The first was filed by Pharr on  June

30,  2000,  arguing  that  because  Tush  testified  the  Chugach

property  did not have coverage, he was under no duty to  further

investigate  whether  or not such a policy existed.   The  second

motion for summary judgment was filed September 21 by Reiman.  In

his motion Reiman argued that not only did he not have a duty  to

          tender the claim, but also that even if such a duty existed, he

was  not  the cause of Tushs injury as the misrepresentations  in

her  application for coverage to State Farm voided the policy  ab

initio.   The third motion for summary judgment was filed October

5,  also  by  Pharr.  In it, Pharr joined in Reimans  motion  and

further argued that even if Tush was correct that a duty existed,

any negligence on the part of the defendants was not the cause of

Tushs  harm  as State Farm would have denied coverage  under  the

intentional  acts  exclusion.   The  final  motion  for   summary

judgment was filed by Owens and Owens & Turner P.C.  In it, Owens

argued  that  regardless of his or his firms actions  State  Farm

would have denied the claim because of Tushs failure to tender it

in  a  timely fashion.  Owens also joined in Reimans  motion  for

summary judgment and Pharrs second motion for summary judgment.

          Superior Court Judge John E. Reese granted each  motion

for  summary  judgment,  specifically adopting  as  to  each  the

arguments made by defendants.

          Tush now appeals.

III. STANDARD OF REVIEW

          We  review a trial courts grant of summary judgment  de

novo  and  affirm  if the record presents no  genuine  issues  of

material fact and the moving party is entitled to judgment  as  a

matter  of law.6  All reasonable factual inferences are drawn  in

favor of the non-moving party.7

          Contract language interpretation is a question of  law,

subject  to  our  de  novo  review.8   Insurance  contracts   are

interpreted  by  looking to the language of the  disputed  policy

provisions,  the language of other provisions of the policy,  and

to  relevant extrinsic evidence.  In addition, we also  refer  to

case law interpreting similar provisions.9

IV.  DISCUSSION

          A claim of legal malpractice consists of four elements:

          (1) the duty of the

professional to use such skill, prudence, and diligence as  other

members  of the profession commonly possess and exercise;  (2)  a

breach  of  that duty; (3) a proximate causal connection  between

the  negligent conduct and the resulting injury; and  (4)  actual

loss or damage resulting from the professionals negligence.10

     A.   Summary Judgment Was Improperly Granted on Pharrs First

          Motion for Summary Judgment Because Material Facts Were in

          Dispute as to Pharrs Duty To Investigate.

          Pharr argues he did not breach his duty of care to Tush

by  failing to further investigate the issue of insurance.   Tush

responds  that  reasonable minds could differ on whether  or  not

Pharr had a duty to further investigate, creating a genuine issue

of material fact in dispute.  We agree with Tush.

          Because  the question of whether a tort duty exists  is

usually  a  question  for  the trier of fact  and  therefore  not

susceptible  to  summary adjudication, summary  judgment  on  the

question  of a tort duty is only appropriate when the  undisputed

facts support only one reasonable inference.11

          But  the  facts pertinent to Pharrs initial motion  for

summary judgment supported more than one inference.  The question

before  the  court  concerned  the  first  element  of  a   legal

malpractice  claim:  Did Pharr have a duty to  investigate  Tushs

insurance?   For several reasons we conclude that material  facts

concerning this issue were in dispute.

          First,  Tushs deposition testimony on the  question  of

what  type of insurance she carried on her rental properties  was

ambiguous.   She  testified  that  all  of  her  properties  were

covered,  but  then she answered the question,  Is  it  liability

insurance?  by  saying, No, its just the value of  the  house,  a

statement  that  implies, but does not clearly  state,  that  the

insurance covers only loss of premises.  But then, when asked  if

her  other policies strictly insured the value of the house,  she

responded  I really dont know.  Finally, when asked if  she  knew

the  extent  of  her  insurance coverage  and  other  information

pertaining  to her policies, Tush responded, I leave that  up  to

          the insurance agent and I talk to him about it.  Pharr contends

that  Tushs  sworn  testimony that she  did  not  have  liability

insurance relieved him of the duty to inquire further.  But given

the  ambiguous  nature  of Tushs deposition  responses,12  Pharrs

defense  that  he was entitled to rely on his clients  deposition

testimony raises disputed issues of fact.

          Second,  Pharr relies on his assertion that  Tush  told

him  in  a  separate  conversation  that  she  had  no  liability

insurance on the subject property.  But Tush denied that  such  a

conversation ever took place, creating a further material factual

dispute.

          Third,  Tush  offered  substantial  expert  opinion  to

support the proposition that an attorney faced with the situation

facing  Pharr  had  a  duty to obtain and inspect  the  insurance

policies  so as to competently advise his client.  Expert  Robert

Wainscott  opined,  It  has been my experience  that  it  is  the

standard  and  essential practice of the attorney to  immediately

seek  out  all  insurance  policies  that  may  possibly  provide

coverage   for  a  date  of  event  and  tender  the  claims   or

counterclaims to the carrier or carriers who wrote the  policies.

Expert  James  A.  Hanson offered the opinion that,  after  Tushs

deposition,  prudence  required a full review  of  her  insurance

policies  by her counsel.  Expert Roger Holmes added, It  is  the

standard of care for a lawyer representing a client in a personal

injury, bodily injury or property damage claim to help the client

ascertain  the  availability of insurance  coverage  which  might

provide  for  a  defense and/or indemnity to  the  client.   This

should be done as soon as possible after the commencement of  the

case.   To be sure, there was contrary expert testimony.  But  at

the least, a material fact dispute existed on the attorneys duty.13

          Finally,  Pharr admitted that he adopted  the  position

that Tush was better off without liability insurance, because  in

his   experience  the  existence  of  such  insurance   attracted

plaintiffs.

          Pharr cites a number of cases for the proposition  that

a  lawyer has no duty to investigate the truth or falsity of  his

or  her  clients  representations.14  But  these  cases  involved

unambiguous  situations, and Pharrs argument assumes  that  Tushs

deposition   testimony  stating  she  does  not  have   liability

insurance was unequivocal.  As noted above, this is far from  the

case.   The  rule that an attorney can rely on a clients  factual

representations   absent   circumstances   indicating   otherwise

provides  scant  support for Pharr, because  there  are  numerous

circumstances indicating otherwise here: the ambiguity  of  Tushs

deposition statements, her denial that she told Pharr outside  of

the  deposition that she had no liability insurance,  and  expert

opinion  to the contrary.  As stated in Milliner v. Elmer  Fox  &

Co.,15  one of the cases upon which Pharr relies, [a]s a  general

rule,  an  attorney is not required to investigate the  truth  or

falsity of facts and information furnished by [a] client, and his

failure  to do so would not be negligence . . . unless facts  and

circumstances  of  the  particular legal problem  would  indicate

otherwise.16  The court in Harline v. Barker,17 applying Milliner,

looked  to see if there were any special circumstances indicating

that  the clients representation could not be relied on and found

there  were.18   Here too, the circumstances of  Tushs  testimony

arguably should have alerted Pharr that her single representation

that  she  did  not have liability insurance might have  required

further  investigation.  A review of Tushs testimony  shows  that

the  issue  of what insurance she had was far from  clear.   When

asked  if she knew the extent of her insurance coverage or  other

information pertaining to her policies, Tush answered I leave  it

up  to  the  insurance agent and I talk to him about  it.   Also,

Tushs  testimony  clearly stated that she was  in  possession  of

other  insurance policies as well.  Given that Pharr  knew  this,

there  is  a  material fact dispute as to whether he should  have

inquired  as to whether any of these policies might have provided

possible coverage for the Perez claim.

          Because  reasonable minds could differ  as  to  whether

Pharr  had  a  duty  to  further  investigate  whether  Tush  had

liability insurance for the Chugach property, summary judgment on

Pharrs first motion was inappropriate.

     B.   Summary Judgment Was Improperly Granted on Pharrs Second

          Motion for Summary Judgment Because Material Facts Were in

          Dispute as to Whether State Farm Would Have Denied Coverage or

          Could Have Done So Successfully.

          To   make   out  a  prima  facie  claim  for   attorney

malpractice, Tush must show that the defendants were the cause of

her  injury.   Pharrs second motion for summary  judgment  argued

that  Tush  is  unable  to  do  this because  regardless  of  the

defendants actions, State Farm would have denied Tushs claim  due

to misrepresentations in her application or under the intentional

acts exclusion of her policy.19  Tush claims that any argument as

to  what  State Farm would or could have done had the claim  been

tendered  is  speculative and that there are  genuine  issues  of

material  fact  in  dispute  with  regard  to  both  her  alleged

misrepresentations  in obtaining her State Farm  policy  and  the

intentional acts exclusion of that policy.  Again we  agree  with

Tush.

          1.   There  are disputed issues of material fact as  to

               whether  the misrepresentations in Tushs insurance

               application  would have caused or permitted  State

               Farm to void the policy ab initio.

          Tush  argues that by ruling that regardless of  whether

the claim was promptly tendered to State Farm, that company would

have  denied  coverage due to the material misrepresentations  in

Tushs  application,  the  superior court  improperly  resolved  a

genuine  issue  of  disputed material  fact  and  misapplied  the

applicable law.  Pharr responds that the superior court correctly

decided this causation issue.  Causation issues such as this  are

normally  left  for  the  trier of  fact  where  unresolved  fact

questions remain, although the court may decide the matter  where

          the evidence is such that reasonable minds cannot differ.20

          Tushs  policy  for  the  Chugach  property  contains  a

provision dealing with concealment, misrepresentation, and fraud.

Under  it, the policy is void in any case of fraud by the insured

as  it  relates to the policy.  The policy is also  void  if  the

insured  intentionally conceals or misrepresents a material  fact

concerning the policy or the covered property.

          Under AS 21.42.110,

          All   statements  and  descriptions   in   an
          application  for  an  insurance   policy   or
          annuity contract, or in negotiations for  the
          policy  or contract, by or in behalf  of  the
          insured or annuitant, shall be considered  to
          be   representations  and   not   warranties.
          Misrepresentations, omissions, concealment of
          facts,  and  incorrect  statements  may   not
          prevent  a  recovery  under  the  policy   or
          contract unless either
               (1) fraudulent;
               (2) material either to the acceptance of
          the  risk,  or to the hazard assumed  by  the
          insurer; or
               (3)  the  insurer  in good  faith  would

          either   not  have  issued  the   policy   or

          contract, or would not have issued  a  policy

          or  contract in as large an amount, or at the

          same  premium  or  rate, or  would  not  have

          provided coverage with respect to the  hazard

          resulting in the loss, if the true facts  had

          been  made  known to the insurer as  required

          either  by the application for the policy  or

          contract or otherwise.

          Tushs  application for insurance was made by  telephone

and,  as a result, she did not sign the application.  Tush denied

that  she  had  been  asked about prior losses or  cancellations,

testified  that  she  had  told the State  Farm  agent  that  her

previous insurance had just been canceled, and testified that she

did  not understand prior losses to mean insurance claims.   Tush

offered  expert  opinion  to  the  effect  that  because  of  the

          uncertainty introduced by Tushs testimony, State Farm might not

have  denied  coverage  or  might  have  defended  Tush  under  a

reservation of rights.21  Under these circumstances, the question

whether  State  Farm would have voided the policy  ab  initio   a

question that required speculation as to what another would  have

done  was one for the jury.22  Moreover, although State Farm  has

maintained  that  even an unsigned application can  be  canceled,

summary  judgment would still be inappropriate.   Simply  because

State Farm had the option to cancel the policy does not mean that

it  would have done so had the claim been promptly tendered under

these circumstances.

          Further, what State Farm might have done in response to

a tender of defense is by no means the complete inquiry.  Even if

State  Farm would have denied coverage or refused to defend,  the

question whether such actions would have been legally sustainable

if challenged must also be decided.

          Pharr relies on Bennett v. Hedglin,23 but that case  is

distinguishable factually from the present case.  In Bennett,  we

upheld  the  superior  courts grant of summary  judgment  against

Bennetts  claim for insurance coverage because it was clear  that

Bennett  made  the  misrepresentation on the  application.   Even

though  Tushs actions in this case and in the Perez  lawsuit  may

cast  her  credibility  into  question,24  summary  judgment   is

unavailable where credibility issues are to be resolved.

          Because how the misstatements on Tushs application came

about and what actions State Farm would or could have taken after

discovering the misstatements are unclear and in dispute, summary

judgment should not have been granted on these grounds.

          2.   There are disputed issues of material fact as to whether the

               intentional acts exclusion in Tushs policy would have precluded

               coverage.

          Pharr  contends  that  the intentional  acts  exclusion

would  have  precluded coverage for the Perez claims under  Tushs

State  Farm  policy.  Tush argues in opposition that  State  Farm

          could not properly have denied a defense based on the policys

intentional acts exclusion under Alaska law.

          Tushs   rental   dwelling  policy   provides   business

liability coverage where State Farm agrees to pay up to our limit

of  liability  for the damages for which the insured  is  legally

liable  .  .  .  including  malicious  prosecution  and  wrongful

eviction.   (Emphasis in original.)  However, this coverage  does

not  extend to bodily injury, personal injury, or property damage

.  . . which is either expected or intended by an insured; or . .

.  to  any person or property which is the result of willful  and

malicious acts of an insured[.]  (Emphasis in original.)

            An  insurers  duty  to defend and its  obligation  to

indemnify are separate and distinct contractual elements. 25  The

duty to defend is broader than the duty to provide coverage.26  A

duty  to  defend arises whenever a complaint sufficiently alleges

an  issue of liability covered by the policy on its face, even if

the  allegations of the complaint are false or groundless.27  The

insurer may therefore be obligated to defend even where it has no

ultimate liability under the policy.28  And, the presence of other

allegations in the complaint which are not within policy coverage

does not relieve [an insurer] of its duty to defend.29

          Pharr  is correct that the Perez counterclaims have  as

their  basis  intentional conduct.  However as  even  Pharrs  own

expert, Daniel T. Quinn, opined, State Farm might have agreed  to

defend in any event.  First, while Counts I and III through VI of

the  Perez  complaint  allege intentional  misconduct,  Count  II

alleges  in  part that [p]laintiffs deliberately  or  negligently

failed  to  provide  essential services to the  rental  premises.

(Emphasis added.)  Quinn opined that although the majority of the

complaint pleads intentional acts, in such a situation  he  would

advise  the  insurer to defend, possibly under a  reservation  of

rights.  Wainscott opined that even more of the counts might have

been  accepted for coverage by State Farm, and that the remainder

would  be  accepted by State Farm under a reservation of  rights.

          Disputed questions of fact precluded summary judgment here.

          Finally,  although  Tushs policy  excludes  intentional

acts,  the  policy  explicitly covers  injuries  arising  out  of

wrongful  eviction,  a  tort  that may  be  committed  either  as

intentional or  unintentional and otherwise actionable under  the

rules   governing   liability   for   negligent,   reckless    or

ultrahazardous  conduct. 30  Tushs policy does not  differentiate

between    intentional   and   negligent    wrongful    eviction.

Accordingly,  because the policy includes wrongful  eviction,  it

must   be  deemed  to  be  excluded  from  the  intentional  acts

exclusion.31

          In  sum,  disputed  issues of  material  fact  preclude

summary  judgment  on Pharrs second motion for  summary  judgment

concerning whether State Farm would or could have denied coverage

because  of misrepresentations in the application.  These include

whether  Tush  was  responsible  for  the  misrepresentation  and

whether State Farm would have denied coverage and a defense under

the  facts of this case.  Summary judgment was also inappropriate

on  the question of whether the intentional acts exclusion of the

policy barred coverage, because at least one of the counts of the

original Perez counterclaims alleged negligence by Tush, and  the

policy specifically included wrongful eviction.  Thus, reasonable

minds could differ as to whether the defendants failure to tender

the  claim was the cause of Tushs injury, making the question  of

causation one for the jury.

     C.   Summary  Judgment  Was  Improperly  Granted  on  Owenss

          Motion  Because  Whether Tushs Claim  Would  Have  Been

          Untimely  Had Owens Tendered it to State Farm  Involves

          Disputed Questions of Fact.

          Owens   claims  that  regardless  of  whether  it   was

negligent for him to have failed to tender Tushs claim  to  State

Farm, Tush suffered no damage as the claim would have been deemed

untimely.  Owens bases this argument on the fact that by the time

Owens had agreed to represent Tush, three and one-half years  had

          passed and the case had escalated from one in which plaintiff

offered  to  settle  for $25,000 to one where plaintiff  demanded

$450,000  to  settle.  Tush argues that the question  of  whether

State Farm would have denied coverage is a question of fact for a

jury,  making  the  superior  courts entry  of  summary  judgment

improper.

          We  have  recognized  the strong societal  interest  in

preserving insurance coverage for accident victims so long as the

preservation is equitable for all parties involved.32  Therefore,

absent  prejudice,  regardless of the  reasons  for  the  delayed

notice,  there is no justification for excusing the insurer  from

its obligations under the policy.33

          The  burden of showing prejudice from a delay in notice

rests  with the insurer, not the insured.34  Generally  proof  of

prejudice to the insurer is a question of fact.35

          Tushs  State  Farm  policy  requires  the  insured   to

promptly notify the insurer  in the event of any occurrence  that

might  result in a claim.  The policy also states, If a claim  is

made  or suit is brought against any insured, you must see to  it

that  we receive prompt written notice of the claim or suit.   It

is  undisputed that notice of the Perez judgment against Tush was

not  made  promptly.  The parties dispute the  existence  of  any

issues  of  genuine material fact as to whether  State  Farm  was

prejudiced  by  Tushs  delay and whether State  Farm  might  have

accepted the claim regardless.

          Owens cites many cases for the proposition that a delay

of three and one-half years constitutes prejudice,36 arguing that

State  Farm  would have denied the claim even if he had  tendered

it.   However,  in  those cases the plaintiffs were  suing  their

insurance  companies.  Here, State Farm is not a  party  to  this

appeal.   Therefore, whether three and one-half years is untimely

is  irrelevant if no prejudice resulted to State Farm or if State

Farm would have accepted the claim anyway.

          1.   There is no factual dispute that State Farm was prejudiced
               by the delay.
               
          The parties agree that Tush delayed over three years in

tendering  the  case to State Farm.  Owens claims  the  delay  in

tendering the claim was unreasonable and every expert retained in

the  matter agrees, primarily because the delay prejudiced  State

Farm  from being able to properly investigate and possibly settle

the  matter.  Tush argues that the denial of participation in the

settlement process is not sufficient to constitute prejudice  and

that  even if it was, whether State Farm might have accepted  the

claim is a genuine issue of material fact in dispute.

          The   evidence   of   prejudice  to   State   Farm   is

overwhelming.   Wainscott, an expert retained by  Tushs  counsel,

opined  that [i]t is clear that State Farm was prejudiced by  the

late  notice  since the opportunity to settle the  claim  for  as

little as $25,000 existed early in the case.  In his supplemental

report  Wainscott stated further that [t]here can be no  question

that  State Farms rights were prejudiced by the late notice.   In

43 years of insurance experience, I dont believe Ive ever seen  a

case  with more evidence of prejudice to a carrier.  And, Holmes,

another of Tushs retained experts, also agreed:  In my mind,  the

fact  that  they could have possibly settled for a lesser  amount

than  when they came into the case is prejudice.  Reimans  expert

agreed, noting State Farm suffered extreme prejudice and that the

timely  reporting requirement would have entitled  them  to  deny

that coverage if they so desired.

          2.   Whether State Farm would have denied a defense of the claim,

               even if prejudice did exist, is a disputed issue of material

               fact.

          Owens  argues that State Farms conduct is not  relevant

to Tushs legal malpractice case against Owens because this is not

a  coverage dispute between an insurer and an insured.   However,

because Owens is making a causation argument, in order to prevail

on  summary  judgment he must show not only that State  Farm  was

prejudiced  but also that there is no genuine issue  of  material

fact  that State Farm would have denied the claim because of  the

prejudice.  Owens has not met this burden.

          To  bolster  his  position, Owens  produced  an  expert

opinion  from  William Marr, a team manager for State  Farm.   In

Marrs opinion, had Owens tendered the claim to State Farm six  to

eight  months  before  trial, when he first agreed  to  represent

Tush,  State Farm likely would have denied the claim as  untimely

and  as prejudicial to its ability to properly investigate.  Tush

responded  with  the expert opinion of Roger Holmes,  who  opined

that  Marrs  prediction of how State Farm would have reacted  was

wrong: I read what Mr. Marr said would have happened.  And, in my

opinion,  that  isnt what would have happened.  They  would  have

defended  the case under a reservation of rights, or  they  would

have defended it without a reservation of rights, if they decided

that  CHI  counsel  was  too expensive.   Expert  witness  Robert

Wainscott  also testified that State Farm would have most  likely

proceeded  with a defense had Owens tendered the case, especially

after  the  trial date was continued:  And at the point  in  time

where  Tom Owens had an extension of time . . . I would  have,  I

would  have  proceeded with the coverage.  I believe  they  would

have  accepted the tender, probably, under reservation of rights,

I  would guess.  Im just guessing.  Im guessing what I would have

done if I was in their shoes.

          In  sum, even if State Farm suffered prejudice  by  the

delay in tender, there is a genuine question of material fact  as

to whether State Farm might have accepted the tender of the Perez

claim.  In these circumstances, summary judgment on Owenss motion

was improper.

V.   CONCLUSION

          Because  genuine  issues of material fact  remain  with
regard  to each of the four summary judgment motions, we  REVERSE
the  decision of the superior court granting summary judgment and
we REMAND this case for further proceedings.

_______________________________
     1    Tush v. Perez, 3AN-93-7673 CI.

     2    The following colloquy ensued:

          Q:   Are any of the rental properties insured?
          A:   Yes.
          Q:   And with whom?
          A:   Im not going to answer.
          Q:   Do  you have an agent  youre not willing
               to state who your agent is?
          A:   No.
          Q:   Do you have an agent?
          Mr. Pharr:      I think weve already answered
                    this  to  the  extent that  we  are
                    going to answer it.
          Ms. Hood: This  is  the first time Ive  asked
                    that particular question.
          Mr. Pharr:      Go ahead and answer  ask your
                    question.
          . . . .
          Q:   My question is, do you have an insurance
               agent?
          A:   I  guess  this is the fourth time  youve
               asked me that.
          Q:   And your answer is?
          A:   Im not going to answer.
          Q:   Okay.  Is your property particularly  at
               1201 Chugach insured?
          A:   Yes.
          Q:   And with whom is that insured?
          A:   Im not going to answer.
     3    Pharr did answer these requests on behalf of Larry whom
he  still  represented at this time.  However, Pharr claims  that
because  Larry  was  out of town and [he]  had  to  do  something
regarding the discovery, he simply said [Larry] does not have any
of  these  documents  you want and objected to  the  requests  as
overbroad.  Pharr eventually withdrew from his representation  of
Larry as well.

     4     Fitzgerald  stated in an affidavit that  no  insurance
policy was ever produced by Tush or any of her lawyers during the
course of the Perez lawsuit.

     5     Reiman  subsequently settled with Tush and  the  court
dismissed the cause of action against him with prejudice.

     6    Lincoln v. Interior Regl Hous. Auth., 30 P.3d 582, 585-
86 (Alaska 2001).

     7    Id. at 586.

     8    Cox v. Progressive Cas. Ins. Co., 869 P.2d 467, 468 n.1
(Alaska 1994).

     9    Id. (internal citation omitted).

     10    Doe v. Hughes, Thorsness, Gantz, Powell & Brundin, 838
P.2d  804, 806 (Alaska 1992) (quoting Belland v. O.K. Lumber Co.,
797 P.2d 638, 640 (Alaska 1990)).

     11    Arctic Tug & Barge, Inc. v. Raleigh, Schwarz & Powell,
956 P.2d 1199, 1203 (Alaska 1998).

     12    The complete exchange was as follows:

          Q:   Miss Tush, do you have insurance for the
               rental properties?
          A:   Yes.
          Q:   And who is your agent, or do you have an
               agent?
          A:   Yes.
          Q:   And who is your agent?
          A:   Conrad with State Farm.
          Q:   Conrad at State Farm?
          A:   Uh-huh.
          Q:   And is he a local agent?
          A:   Yes.
          Q:   And  does  he insure all of your  rental
               properties?
          A:   No.
          Q:   Which ones are uninsured?
          A:   I dont have anything uninsured.
          Q:   Oh, I see.  Who else insures your rental
               properties?
          A:   It  used  to be Home State, I dont  know
               what they are called now.
          Q:   So  you  have  insurance  policies  with
               Conrad at State Farm and Home State?
          A:   Yes.
          Q:   Are  there  any  other insurance  agents
               with whom you have policies?
          A:   No.
          Q:   Are  there any other insurance  policies
               that  you have with regard to the rental
               properties?
          A:   No.
          Q:   Okay.  And youve already stated that you
               dont  have copies of policies,  are  you
               aware  of  your coverage limits  or  any
               other  information pertaining  to  those
               policies?
          A:   I  leave that up to the insurance  agent
               and I talk to him about it.
          Q:   Do you have insurance for 1201 Chugach?
          A:   Yes.
          Q:   Do you know the extent of the insurance,
               what type of insurance it is?
          A:   Its  valued  at $20,000, if  thats  what
               youre referring to.
          Q:   Is it liability insurance?
          A:   No, its just the value of the house.
          Q:   Okay.  Are your other insurance policies
               strictly  insuring  the  value  of   the
               house?
          A:   I really dont know.
          Q:   Who  has  your  policy on 1201  Chugach,
               Conrad or Home State?
          A:   State Farm.
          Q:   Have  you  ever dealt with  an  adjuster
               regarding your rental properties?
          A:   No.
          Q:   So  you  wouldnt know the  name  of  the
               adjuster  that you would  deal  with  if
               there were to be an issue regarding your
               rental properties?
          A:   No.
          Q:   Okay.
          A:   Ive never had to contact one.
          Q:   Okay.  Have you ever had to make a claim
               on any of your policies for liability to
               tenants of any kind?
          A:   No.
     13     Haisley v. Grant, 486 P.2d 367, 370-71 (Alaska  1971)
(holding that the weight to be accorded to an experts opinion is,
for  all  practical purposes, exclusively within the province  of
the jurors as triers of the facts.).

     14    Loyd v. Paine Webber, Inc., 208 F.3d 755, 760 (9th Cir.
2000) (holding that in certain circumstances attorney had no duty
to  independently  investigate whether clients were  engaging  in
fraudulent  conduct);  Heine  v.  Newman,  Tannenbaum,   Helpern,
Syracuse  &  Hirschtritt, 856 F. Supp. 190, 195  (S.D.N.Y.  1994)
(holding   that  attorney  was  not  negligent  in   relying   on
representations made by client); Parksville Mobile Modular,  Inc.
v. Fabricant, 422 N.Y.S.2d 710 (N.Y. App. Div. 1979) (noting that
attorney  generally should not be held liable  for  ignorance  of
facts  client neglected to state); Milliner v. Elmer Fox  &  Co.,
529 P.2d 806, 808 (Utah 1974).

     15    529 P.2d 806 (Utah 1974).

     16    Id. at 808 (emphasis added).

     17    854 P.2d 595 (Utah App. 1993).

     18    Id. at 599-600 (reversing grant of summary judgment for
defendant  attorneys because a reasonable juror could have  found
that  attorneys breached duty to Harline by failing  to  ask  him
about  court  orders needing attention or to investigate  ongoing
bankruptcy proceedings).

     19     Pharrs second motion for summary judgment and Reimans
motion  for  summary judgment, in which Pharr and  Owens  joined,
will  be  considered together in this section as both  deal  with
similar issues of causation.

     20    Sharp v. Fairbanks N. Star Borough, 569 P.2d 178, 183-
84 (Alaska 1977).

     21    Tush offered the expert opinion of David G. Sever, who
worked  for  over  thirty years in the insurance  industry  as  a
claims adjuster and an underwriting manager,  for the proposition
that  the misrepresentations in the application would not provide
a  basis  for State Farm to void coverage.  Because Tush did  not
sign  the  application, according to Sever, she made  no  written
representations  to the insurance company of any  type  or  kind.
Severs  opinion  supports the conclusion that what  action  State
Farm would have taken on discovering the misrepresentations is  a
question of fact for a jury.  Pharr claims what State Farm  would
have  done  is  immaterial, arguing that  what  is  important  is
whether  the  policy could have been voided.   This  argument  is
unpersuasive,  for in making his causation argument,  Pharr  must
show that State Farm would have voided the policy to prevail.  If
State   Farm  might  not  have  voided  the  policy,  given   the
uncertainty of Tushs responsibility for the misstatements in  the
application, Pharrs alleged malpractice could have been the cause
of loss to Tush.

     22     See, e.g., Hawaiian Life Ins. Co., Ltd. v. Laygo, 884
F.2d  1300,  1303  (9th  Cir.  1989) (holding  that  insured  who
allegedly  made misrepresentations is entitled to opportunity  to
explain  actions and that relationship between insured and  agent
in  filling  out application should be developed on record).   If
the  matter was to be determined by this court, however, each  of
these  factual inferences would have to be resolved in  favor  of
Tush as the nonmoving party.

     23    995 P.2d 668 (Alaska 2000).

     24      For   example,  it  is  uncontested   that   similar
misrepresentations  appear on insurance  applications  Tush  made
from  1993  to  1998.  Tush claimed that each time the  insurance
agent failed to ask her the pertinent questions.

     25     Fejes  v.  Alaska Ins. Co., Inc., 984 P.2d  519,  522
(Alaska  1999) (quoting Sauer v. Home Indem. Co., 841  P.2d  176,
180 (Alaska 1992)).

     26    Id.

     27    Allstate Ins. Co. v. Roelfs, 698 F. Supp. 815, 817 (D.
Alaska 1987).

     28    Fejes, 984 P.2d at 522.

     29    Sauer, 841 P.2d at 181.

     30     See Barkett v. Brucato, 264 P.2d 978, 986 (Cal.  App.
1953)  (listing  elements  of wrongful  eviction  tort)  (quoting
Restatement of Torts  822 (1939)).

     31    E.g., Stanback v. Westchester Fire Ins. Co., 314 S.E.2d
775,  779 (N.C. App. 1984) (finding that policy covering personal
injury which defined personal injury to include intentional torts
that also had an exclusion for all intentional acts ambiguous and
that  such  ambiguity  should and would be resolved  in  insureds
favor).

     32     Weaver  Bros.,  Inc. v. Chappel, 684  P.2d  123,  125
(Alaska 1984).

     33     Id. (reversing grant of summary judgment in favor  of
insurer  due  to  insurers failure to offer  no  more  than  mere
allegations  of  prejudice  from  insureds  six-  year  delay  in
tendering claim under policy).

     34     Id.  at 126 (noting that [t]he insurer is in a better
position  to demonstrate that its ability to investigate,  defend
or settle a claim has been impaired).

     35    Id.

     36     See,  e.g., AVCO Corp. v. Aetna Cas. & Sur. Co.,  679
A.2d 323, 328 (R.I. 1996) (holding that delay of two and one-half
years  did not constitute immediate notice as required by policy,
as  no  judicial  holding or legal authority . . .  would  equate
immediate  as  meaning within two and one-half years thereafter);
Martinson v. Mass. Bay Ins. Co., 947 F. Supp. 124 (S.D.N.Y. 1996)
(holding  two-year delay from notice of claims and fourteen-month
delay  from time action commenced untimely and upholding insurers
denial  of  coverage).  Under New York law, however, an  insureds
failure to comply with a notice-of-claim provision is generally a
complete  defense  to actions against the insurer  for  coverage.
Id.  at  128 (citing Olin Corp. v. Ins. Co. of N. Am.,  966  F.2d
718,  723 (2d Cir. 1992)).  Because Alaska law requires a showing
of  prejudice in addition to an insureds failure to  comply,  see
Weaver  Bros., 684 P.2d at 126 and supra text accompanying  n.33,
New York law is generally inapplicable on this issue.