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March 27, 1978

WILLIAM S. KEOWN, Defendant, and MARGUERITE BOSSLE, Executrix of Estate of W. Louis Bossle, Intervening Defendant, and C. EDWIN MUNGER, F. MORSE ARCHER, JR., Guardian ad litem, GEORGE MUNGER and CAROL L. OBER, Intervening Defendants

The opinion of the court was delivered by: BROTMAN

BROTMAN, District Judge

 Plaintiff, Transamerica Insurance Company, instituted this action against defendant, William S. Keown, Esq., seeking a declaratory judgment, 28 U.S.C. § 2201, determining the rights and liabilities of the parties under the terms of the insurance policies issued to defendant. There is over $10,000 in controversy. Jurisdiction is conferred upon this court by diversity of citizenship, 28 U.S.C. § 1332. This matter is before the court on the motion for summary judgment of intervenors, C. Edwin Munger, F. Morse Archer, Jr., Guardian ad litem, George Munger, Carol L. Ober, Marguerite Bossle, and defendant William S. Keown, Fed. R. Civ. P. 56. Intervenors are beneficiaries of the will and trust of Clarence A. Munger.


 Mr. Keown is the Succeeding Trustee of a trust created by the will of Clarence A. Munger. The will empowered the trustee to invest the corpus


in such securities as may, in the judgment and discretion of my said Trustee, seem proper, whether or not such securities shall be of the type prescribed by law for the investment of trust funds . . . .

 Prior to October 1968, Mr. Keown filed his accounts as Succeeding Executor of the will and as Succeeding Trustee. Supplemental accounts were filed on September 30, 1970.

 Exceptions were filed by the beneficiaries of the Trust and the Will, intervenors herein. The central contention of the exceptions was that the will did not give the Succeeding Trustee the power to invest in real estate. The Camden County Court, Probate Division, found for the beneficiaries. This decision was affirmed by the Appellate Division of the Superior Court of New Jersey and by the Supreme Court of New Jersey. In re Munger, 63 N.J. 514, 309 A.2d 205 (1973). On July 30, 1974, Judge Brown of the Camden County Court surcharged defendant Keown in the amount of $199,142.46, including amounts for unauthorized investments in real estate and other charges.

 The intervenors and Succeeding Trustee Keown contend that the terms of the policy require the plaintiff to provide coverage for the judgment of the Probate Court.


 Clause I of the policy, "Individual Coverage," requires the company to pay:


all sums which the insured shall become legally obligated to pay as damages because of any act or omission of the insured, or of any other person for whose acts or omissions the insured is legally responsible, and arising out of the performance of professional services for others in the insured's capacity as a lawyer. . . .

 Intervenors contend that this clause is ambiguous in defining the scope of acts arising out of the performance of professional services for others and that the clause should be read expansively to include the work of Mr. Keown as a fiduciary.

 There are certain "grey areas" which are difficult to classify as "the professional services" of a lawyer. See, Bancroft v. Indemnity Insurance Co. of North America, 203 F. Supp. 49 (W.D. La.), affirmed, 309 F.2d 959 (5th Cir. 1962). Bancroft, a case cited by the intervenors, involved an insurance policy for an accountant with a provision very similar to Clause I of the instant policy. The court held that the term "professional services" of an accountant was broad enough to include quasi-legal advice on taxes, which fell within a "twilight zone" where both accountants and lawyers find some common ground. It went on to say:


We ask this pertinent question: Had defendant not undertaken to insure against the risk of professional liability for negligence in rendering an opinion as to tax consequences, knowing full well that C.P.A.'s give such opinions every day, why was this not made a specific exception or exclusion in the insurance contract here in view of continuing disagreement between the two professional groups as to appropriate spheres of services for each? Bancroft, supra at 56-57

 Furthermore, the court feared that without interpreting the insurance agreement broadly, innocent clients damaged by a C.P.A.'s professional negligence would be left unprotected. Id. at 57.

 In interpreting the insurance policy before this court, ambiguities must be construed liberally in favor of the insured, and the insured should not be subjected to hidden pitfalls. Fidelity & Casualty Co. of N.Y. v. Carll and Ramagosa, Inc., 243 F. Supp. 481, 486-87 (D. N.J. 1965), appeal dismissed, 365 F.2d 303 (3rd Cir. 1966). However, unlike Bancroft, the insurance company herein, recognizing that lawyers often act as fiduciaries, has attempted to cure possible ambiguity in Clause I by adding a section which specifically covers fiduciary exposure. Clause IV, entitled "Fiduciary Coverage" in boldface type, is situated immediately to the right of the Individual Coverage Clause in the same size type on the first page of the policy. Thus, there is no hidden pitfall. It states:


When the insured acts as an administrator, conservator, executor, guardian, trustee, or in any similar fiduciary capacity, his acts and omissions in such capacity shall be deemed for the purposes of Insuring Agreement I to be the performance of professional services for others in the insured's capacity as a lawyer, but only to the extent that such acts and omissions are those for which in the usual attorney-client relationship the insured would be legally responsible as attorney for a fiduciary.

 This explicit clarification of fiduciary coverage distinguishes this case from Bancroft. An insurance contract must be read as a whole giving effect to all the parts thereof. Feldman v. Urban Commercial, Inc., 87 N.J. Super. 391, 209 A.2d 640 (App. Div. 1965). The court cannot read Clause I broadly while ignoring the plain language of Clause IV. An insurance policy cannot be rewritten by the court, Last v. West American Insurance Co., 139 N.J. Super. 456, 354 A.2d 364 (App. Div. 1976), and is not ambiguous simply because it is complex. National Surety Co. v. Allstate Insurance Co., 115 N.J. Super. 528, 280 A.2d 248 (Law Div. 1971).

 The Fiduciary Coverage Clause eliminates two possible restrictions on coverage in Clause I. First, it establishes that, in acting as his own lawyer, the attorney-fiduciary will be deemed to be performing professional services for others. Second, the insured, when acting as trustee, is covered for his acts and omissions if they are acts normally performed by an attorney even though his title is not that of attorney for the estate or attorney for the fiduciary.

  The Fiduciary Coverage Clause itself is unambiguous. It requires the court to fictionalize the insured as two personae -- the Trustee and the Attorney -- and then to determine if the insured's actions would render him legally responsible as an Attorney to the fictional Trustee. The Law Division of the Superior Court of New Jersey recognized that plaintiff as trustee was acting as his own attorney. Keown v. West Jersey Title & Guaranty Co., 147 N.J. Super. 427, 440, 371 A.2d 370 (Law Div. 1977).

 Such an interpretation of the Fiduciary Clause eliminates the second problem in Bancroft, supra. The Bancroft court feared that if the term "professional services" were not read broadly, the innocent clients of the insured would be left without any coverage. In this case, the clients (intervenors) will be able to recover under the Fiduciary Coverage Clause specifically written to meet this type of situation.

 The inquiry then must proceed along two lines. First, were the acts for which Mr. Keown was surcharged acts for which he was responsible in his role as an attorney. Second, were the acts such that an attorney would be legally liable for their commission.

 A. THE INVESTMENT IN REAL ESTATE In its Judgment Order entered July 30, 1974, the Camden County Court surcharged defendant Keown for the following items: Real property in Egg Harbor $122,911.00 City, New Jersey Accounting fees to Morris Lieb- 9,425.00 man, Morris Liebman & Co., and Liebman and Sandrow Illegal contingent witness fees to 14,152.70 A. J. Rosenfeld Excessive attorney's fees to $ 17,281.01 Emanuel Liebman Federal Income taxes attributable 24,245.25 to Egg Harbor real estate Accounting and appraisal fees an- 5,017.50 cillary to the investment in real estate Payment to David Crabtree, Esq. 1,400.00 Counsel fees to Mr. Keown 4,810.00 Total $199,242.46


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