Overbilling Claim Not Covered
A law firm was the subject of a class action alleging overbilling practices in conjunction with its practice processing foreclosures for lenders and investors. The firm’s professional liability insurer filed a coverage action arguing its duty to defend did not extend to the underlying class action and seeking reimbursement for fees and costs incurred in defending the case. Applying Colorado law, the Tenth Circuit held the overbilling class action did not arise from the firm's “professional services” as defined in the policy. The court also found the firm was not prejudiced by the insurer's alleged failure to make an effective reservation of rights when assuming defense of firm in underlying action.