MEMORANDUM AND ORDER

STERLING JOHNSON JR., District Judge

Plaintiff/Counter-Defendant Coregis Insurance Company ("Coregis") brought this action against Defendants/Counter-Plaintiffs Lewis, Johs, Avallone, Aviles Kaufman, LLP ("Lewis Johs"), a law firm; Deborah Aviles ("Aviles"), a named partner at Lewis Johs; Edward Wright, M.D. ("Dr. Wright"), a physician; and Medical Liability Mutual Insurance Company ("Medical Liability"); and Defendant Ashley Andree, an infant represented by her Mother and Natural Guardian, Christine Andree ("Andree" and, together with Medical Liability, Dr. Wright, Lewis Johs, and Aviles, "Defendants") seeking a declaration, pursuant to 28 U.S.C. § 2201, that (1) the "prior knowledge" exclusion (also known as Exclusion B) provided in Lewis Johs' insurance policy precludes coverage for the legal malpractice claim brought by Dr. Wright and Andree against the firm, or, in the alternative, (2) that Coregis is entitled to rescind Lewis Johs' insurance policy based on a material misrepresentation contained in its application for insurance. Lewis Johs and Aviles bring a counterclaim against Coregis for attorneys' fees and expenses incurred in defending this action. Medical Liability also brings a counterclaim for a declaration, pursuant to 28 U.S.C. § 2001, that (1) Coregis must cover Lewis Johs for the legal malpractice claims brought against it by Dr. Wright and Andree and (2) Coregis is obligated to pay, on behalf of Lewis Johs, all sums that Lewis Johs may become legally obligated to pay Andree and/or Medical Liability, up to the insurance policy limits. Medical Liability also seeks an award of attorneys' fees and expenses incurred in defending this action.

Coregis now moves for summary judgment on its first request for declaratory relief. Additionally, Defendants have submitted a cross-motion for summary judgment with respect to both Coregis' first and second requests for declaratory relief. Coregis also moves to strike an expert witness affidavit submitted in support of Defendants' motion for summary judgment.

For the reasons stated herein, Coregis' motion for summary judgment and motion to strike are GRANTED. Defendants' motion for summary judgment is DENIED.

BACKGROUND

I. The Medical Malpractice Action

The case currently pending before this Court arose out of a New York state medical malpractice trial, wherein Lewis Johs and Aviles represented Dr. Wright and allegedly committed legal malpractice for which they now face a claim for damages. The following facts are undisputed, unless otherwise noted.

On October 18, 1994, Andree brought a medical malpractice action (the "Medical Malpractice Action") in the Supreme Court of the State of New York, Nassau County (the "State Court") against Dr. Wright, the obstetrician and gynecologist responsible for her delivery, and Winthrop University Hospital (the "WU Hospital"), the hospital in which she was delivered. (Lewis Johs Local R. 56.1 Counterstmt. ¶ 1a; Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 1.) At the time the Medical Malpractice Action was initiated, Andree suffered from cerebral palsy and severe periventricular leukomalacia, also known as brain matter softening. (Lewis Johs Local R. 56.1 Counterstmt. ¶ 1a.) Andree alleged that these injuries were proximately caused by Dr. Wright's departures from accepted standards of medical practice, most notably, allowing her premature labor to occur in a labor room without the appropriate obstetrical and neonatal personnel or equipment. (Lewis Johs Local R. 56.1 Counterstmt. ¶¶ 1b, 1c.)

After the Medical Malpractice Action commenced, Dr. Wrights's medical malpractice insurance carrier, Medical Liability, assigned Lewis Johs to represent Dr. Wright as defense counsel, with Aviles serving as the lead attorney. (Am. Compl. ¶ 10; Lewis Johs Ans. ¶ 3; Medical Liability Ans. ¶ 10.) Medical Liability also recommended that Lewis Johs use Dr. Rita Demopoulos ("Dr. Demopoulos"), a placental pathologist, as an expert witness for Dr. Wright's defense. (Aviles Dep. 13:8-18, Sept. 26, 2002.)

The case was ultimately tried in the State Court before a jury in January and February of 1998. (Am. Compl. ¶ 10.) On the morning of February 10, 1998, during the presentation of Dr. Wright's defense, Aviles called Dr. Demopoulos to the witness stand. (Medical Malpractice Action Trial Tr. 2:10-19, Feb. 10, 1998.) Aviles averred that the purpose in calling Dr. Demopoulos was to show that, contrary to Andree's allegations, Andree's injuries were actually caused by intrauterine insult and not by Dr. Wright's alleged negligence. (Aviles Dep., 17:24-5, 18:1-5.)

During trial, Dr. Demopoulos testified that she received certain pathology slides from WU Hospital that contained "cuts" of the placenta of Christine Andree and that she subsequently made chromatic slides of the placenta. (Medical Malpractice Action Trial Tr. 24:23-5, 25:1-10, Feb. 10, 1998, AM Session.) As Aviles anticipated, Dr. Demopoulos further testified that a "chronic intrauterine ischemia" caused a lack of oxygen to Andree while she was a fetus, thus resulting in her cerebral palsy. (Medical Malpractice Action Trial Tr. 44:1-22, Feb. 10, 1998, AM session.)

Dr. Demopoulos' cross-examination revealed, however, that the slides she had reviewed were not those of Andree, but those of Andree's younger brother, Christopher Andree, who was born at full term and did not suffer from cerebral palsy. (Medical Malpractice Action Trial Tr. 76:16-80:22, Feb. 10, 1998, AM session.) After the error was revealed, counsel for WU Hospital determined that a clerk in the hospital's pathology department inadvertently took recuts from the wrong pathology slides. (Aviles Dep. 30:3-23.) WU Hospital ultimately sent, upon authorization, those slides to Lewis Johs, who in turn sent the slides to Dr. Demopolous. (Aviles Dep. 15:1-25, 16:1-19.) Aviles avers that no one at Lewis Johs opened the box containing the slides before transporting it to Dr. Demopoulos. (Aviles Dep. 15:12-25.)

On the afternoon of February 10, 1998, Aviles moved the State Court, "in the interest of fairness," for a mistrial in order to have an opportunity to "reevaluate [the] case and go back to [Medical Liability] with the appropriate records." (Medical Malpractice Action Trial Tr. 6:3-14, Feb. 10, 1998, PM session.) Aviles also argued that there was no reason to believe that Dr. Demopoulos reviewed incorrect slides because hospitals have different labeling procedures and that, without knowing WU Hospital's procedures, both she and Dr. Demopoulos had every reason to rely on the hospital's representations. (Medical Malpractice Action Trial Tr. 6:11-25, Feb. 10, 1998, PM session.) After lengthy argument and discussion, the State Court denied Aviles' application.

On the morning of February 11, 1998, Aviles renewed her motion for a mistrial. (Medical Malpractice Action Trial Tr. 2:10-19, Feb. 11, 1998, AM session.) In support of her motion, Aviles advised the Court as follows: "If, indeed, a verdict comes in against Dr. Wright in excess of this policy, he may decide to sue my office for legal malpractice." (Medical Malpractice Action Trial Tr. 12:4-7, Feb. 11, 1998, AM session.) The State Court again denied Aviles' motion. (Medical Malpractice Action Trial Tr. 22:6-8, Feb. 11, 1998, AM session.) The State Court did, however, grant Aviles' request to provide the jury with a curative instruction stating that: (1) Dr. Demopoulos reviewed the wrong slides; (2) the slides were provided to Dr. Wright by WU Hospital; (3) the delivery of the wrong slides was not intentional or in any way intended to mislead the jury, but was the result of a clerical error; and (4) that Dr. Demopoulos' testimony should be stricken from the record and not considered during jury deliberations. (Medical Malpractice Action Trial Tr. 14:25, 15:1-9, 23:15-17, Feb. 11, 1998, AM session.)

On February 11, 1998, the jury in the Medical Malpractice Action returned a verdict against Dr. Wright in the amount of $15 million. (Am. Compl. ¶ 16.) On March 27, 1998, Lewis Johs filed a post-trial motion asking the State Court to either vacate the judgment against Dr. Wright, order a new trial, or reduce the jury verdict, on the ground that Coregis' attorney had a duty to inform the State Court and Dr. Wright's defense team that Dr. Demopoulos had reviewed the wrong slides. (Am. Compl. ¶ 17; Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 13 (the "Rivkin Radler Report") at 13.)

On June 9, 1998, upon motion of Lewis Johs, the State Court issued an order directing that the correct pathology slides pertaining to the birth of Andree be provided to Dr. Cynthia Kaplan, Dr. Wright's new pathology expert, for examination. (Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 9.) After reviewing the correct slides, Dr. Kaplan submitted a supplemental affidavit on behalf of Dr. Wright, opining that Andree's cerebral palsy was the result of premature birth which was "complicated by chorioamnionitis and the damaging effects of the inflammation process, not the result of Dr. Wright's actions." (Rivkin Radler Report 13.) Andree's pathology expert, Dr. Lone Thanning, also reviewed the correct slides and submitted a supplemental affidavit, concluding that "there [was] no evidence that [Andree] had any kind of neurological or other developmental problems before birth." (Rivkin Radler Report 14.) Andree's expert also stated that "anyone in the field would have recognized that the wrong slides were for a full term placenta." (Rivkin Radler Report 14.)

II. Lewis Johs' and Aviles' Insurance Policy

After filing post-trial motions in the Medical Malpractice Action, Lewis Johs submitted, through Robert Avallone ("Avallone"), another Lewis Johs partner, a Lawyers Professional Liability Insurance Application (Claims-Made Basis) (the "Insurance Application") to Coregis. (Am. Compl. ¶ 19.) Among a litany of questions, the Insurance Application made the following inquiry:

Is the Applicant, its predecessor firms or any lawyer proposed for this insurance aware of any circumstance, act, error, omission or personal injury which may result in a claim against them?

(Am. Compl. ¶ 20.) Lewis Johs' response to that question was "no." (Am. Compl. ¶ 20.) At the time Lewis Johs submitted its insurance application, the State Court had not ruled on Lewis Johs' post-trial motions. (Lewis Johs Local R. 56.1 Stmt. ¶ 20.)

Coregis ultimately approved Lewis Johs' insurance application, and the policy of Lawyers Professional Liability Insurance (the "Policy") became effective on September 2, 1998, with Lewis Johs as the named insured. (Am. Compl. ¶ 21; Coregis' Aff. Supp. Mot. Summ. J, Ex. I, at 1.) Subject to its terms and conditions, the Policy provided, in relevant part, coverage for "claims first made against any insured, and reported to [Coregis] during the policy period," which ran from September 2, 1998 to September 2, 1999. (Policy 1, at § I.A.) The Policy also provided for up to $1,000,000 of insurance coverage per occurrence and $2,000,000 in the aggregate, with a $10,000 deductible per claim. (Policy I.)

With respect to coverage, the Policy expressly stated, in a provision known as "Exclusion B," that the Policy does not apply to:

any claim arising out of any act, error, omission or personal injury occurring prior to the effective date of this policy if any insured at the effective date knew or could have reasonably foreseen that such act, error, omission or personal injury might be expected to be the basis of a claim or suit.

Policy 4, at ¶ B.

The Policy also stated that Coregis shall have "the right and duty to defend, including selection of counsel and arbitrators, in any insured's name and on any "insured's behalf any claim for damages against an insured." (Policy 1, at § II.A.) Coregis' duty to defend under the Policy applied even if "a claim [against an insured was] groundless, false or fraudulent." (Policy 1, at § II.A.) However, Coregis did reserve "the right to make [an] investigation, negotiation and settlement . . . of any claim as it deem[ed] expedient." (Policy 1, at § II.A.)

On the inception date of the Policy, the State Court had not ruled on Lewis Johs' post-trial motion. (Coregis Local R. 56.1 Stmt. ¶ 22.)

On December 9, 1998, the State Court ruled on the post-trial motions (the "December 9, 1998 State Court Ruling"), denying Dr. Wright's request for vacation of the judgment and for a new trial, but reducing the $15 million jury award to $7.5 million. (Am. Compl. ¶ 27.) Dr. Wright appealed the judgment against him; however, the Appellate Division of the Supreme Court of the State of New York rejected his appeal and affirmed the State Court's judgment on November 13, 2000. See Andree v. Winthrop Univ. Hosp., 277 A.D.2d 265 (N.Y.App.Div. 2000). Notably, the New York appeals court observed that "[Dr. Wright's] expert witness testified as she did due to his own error, which could have been anticipated in the exercise of due diligence."Id.

III. Lewis Johs' and Aviles' Potential Claim

On December 17, 1998, after reviewing the December 9, 1998 State Court Ruling, Lewis Johs reported to Coregis the existence of a potential legal malpractice claim. (Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 14.) On or about November 16, 2000, Avallone advised Coregis that "he had received a telephone call from Dr. Wright's personal counsel, who indicated that [Dr. Wright] would prefer not to sue [Lewis Johs] for legal malpractice, but was demanding monetary contribution from [the firm] toward a settlement of the excess verdict. . . ." (Pl.'s Aff. Supp. Mot. Summ. J., Ex. L ("Lee Aff.") at ¶ 6, Feb. 25, 2003.)

Following its conversation with Avallone, on or about November 20, 2000, Coregis assigned Rivkin Radler LLP ("Rivkin Radler") to defend Lewis Johs against the claim made by Dr. Wright. (Lee Aff. ¶ 7.) After reviewing and evaluating Dr. Wright's potential claim against Lewis Johs, Rivkin Radler issued a comprehensive report to Coregis.

On February 27, 2001, Coregis, through counsel, informed Lewis Johs that it reserved its right to disclaim insurance coverage for claims related to the Medical Malpractice Action. (Pl.'s Aff. Supp. Mot. Summ. J, Ex. M at 3-4.) In its reservation letter, Coregis stated that, "on the inception date of the policy, Aviles (and perhaps other insureds as well) either knew or could have reasonably foreseen that the circumstances of the [Dr.] Wright trial and the act (or error) of utilizing the wrong pathology slides might be the basis of a claim." (Pl's Aff. Supp. Mot. Summ. J, Ex. M at 3.) At that time, neither Dr. Wright nor any other party had filed a legal malpractice suit against Lewis Johs.

By letter dated March 14, 2001, Coregis asserted its intention to disclaim Lewis Johs' insurance coverage under Exclusion B of the Policy or, in the alternative, to rescind the Policy. (Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 20 at 2.) Despite disclaiming coverage, Coregis stated that it would be amenable to a "joint contribution between Coregis and [Lewis Johs] toward a settlement with Dr. Wright." (Lewis Johs Aff. Supp. Mot. Summ. J., Ex. 20 at 2.) To date, no settlement agreement has been reached with Dr. Wright.

IV. The Action for Declaratory Relief

Coregis filed the instant action for declaratory relief on June 4, 2001. (See Docket No. 01 CV 3844, Entry 1.) In August 2003, Lewis Johs filed a Motion for Summary Judgment on the grounds that the declaratory judgment action was premature because, at that time, no lawsuit had actually been brought against it as a result of the Medical Malpractice Action. (Lewis Johs' Mem. Law Supp. Mot. Summ. J. 2-3.) Defendant argued that "[w]here, as here, no action has been commenced against the insured to recover a cause of action potentially covered under the policy, an action for declaratory judgment is premature." (Id. at 3.)

On May 20, 2004, Andree and Wright, by and through counsel, filed a Verified Complaint in the State Court against Dr. Demopoulos, Lewis Johs, Aviles, and Medical Liability, alleging,inter alia, legal malpractice by Lewis Johs and Aviles (the "Legal Malpractice Action"). (Pl.'s Aff. Supp. Mot. Summ. J, Ex. O.)

In a letter dated May 28, 2004, Lewis Johs sent Coregis a copy of the Legal Malpractice Action complaint, along with a request that it fund the firm's defense. (See Pl.'s Aff. Supp. Mot. Summ. J, Ex. Q.) Coregis refused this request on July 1, 2004, stating its belief that the Policy afforded no coverage for the claims made in the Legal Malpractice Action. (Pl.'s Aff. Supp. Mot. Summ. J, Ex. Q.)

On or about July 21, 2004, Medical Liability filed a cross-claim against Lewis Johs in the Legal Malpractice Action, alleging that the firm committed legal malpractice in its defense of Dr. Wright. (Am. Compl. ¶ 31; Medical Liability Local R. 56.1 Stmt. ¶¶ 44-45.) Medical Liability placed Coregis on notice of this claim via a letter dated October 15, 2004. (Medical Liability Aff. Opp'n Pl.'s Mot. Summ. J. ("Furman Aff."), Ex. E.) Medical Liability also advised Lewis Johs that it would seek contribution and/or indemnification against "any and all claims made against [Medical Liability] in the Legal Malpractice Action." (Furman Aff., Ex. E at 2.)

In a Memorandum and Order entered on January 10, 2005, this Court held that, because Lewis Johs was in fact served with a summons and complaint in an action brought by Dr. Wright, Lewis Johs' initial motion for summary judgment was moot, but granted Lewis Johs leave to move for summary judgment on the remaining grounds as requested in Defendant's letter to the Court dated September 14, 2004.

On March 22, 2005, Coregis amended its Complaint to include Medical Liability as a named defendant in this case. (See First Amended Complaint, Docket No. 01 CV 3844, Entry 87.) Medical Liability answered and also filed a counterclaim requesting a declaratory judgment as to Coregis' obligation to pay, on behalf of Lewis Johs, any damages owed to Andree and/or Medical Liability in the Legal Malpractice Action. (Medical Liability Answer 6-8.)

On July 6, 2005, Coregis moved for summary judgment, on the ground that Exclusion B bars coverage for Lewis Johs and Aviles. Lewis Johs, Aviles, Medical Liability, Andree, and Dr. Wright oppose this motion, arguing that (1) Coregis waived its right to decline insurance coverage under or to rescind the Policy because Coregis renewed the Policy, accepted and increased premium payments, and did not timely disclaim coverage after receiving notice of the potential claim against Lewis Johs; (2) Coregis impermissibly used the Rivkin Radler Report as a basis for disclaiming insurance coverage; (3) neither Exclusion B nor the rescission provisions of the Policy apply because the State Court and parties to the Medical Malpractice Action conceded that neither Lewis Johs nor Aviles were at fault for Dr. Demopoulos' testimony; and (4) Coregis could not demonstrate that Lewis Johs included a material misrepresentation on its insurance application, and thus had no right to rescind the Policy. Defendants submitted a cross-motion for summary judgment on these same grounds.

In addition to its motion for summary judgment, Coregis also moves to strike Exhibit 11 of Lewis Johs' and Aviles' Affidavit in Support of its Motion for Summary Judgment, on the ground that the exhibit, an expert witness affirmation, is an attempt to circumvent both federal discovery rules and the discovery scheduling order governing this case.

JURISDICTION

This Court has subject matter jurisdiction over this matter based on 28 U.S.C. § 1332(a)(1), as the amount in question is over $75,000 and parties are citizens of different states.

STANDARDS OF REVIEW

I. Declaratory Judgment

A federal court's power to issue a declaratory judgment emanates from 28 U.S.C. § 2201, which provides in relevant part:

In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a).

A district court has discretion in determining whether to grant or deny declaratory relief. See Continental Cas. Co. v. Coastal Sav. Bank, 977 F.2d 734, 736-37 (2d Cir. 1992). The United States Court of Appeals for the Second Circuit (the "Second Circuit") has stated that a district court shall entertain a declaratory judgment action when such judgment will either (1) serve a useful purpose in clarifying and settling the legal relations at issue, or (2) terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. See id. at 737.

II. Summary Judgment

A moving party is entitled to summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The burden is on the movant to establish the absence of any genuine issue of material fact. Celotex Corp., 477 U.S. at 323; see also Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). It is clear that "[i]n moving for summary judgment against a party who will bear the ultimate burden of proof at trial, the movant's burden will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party's claims." Goenaga, 51 F.3d at 18; see also Celotex Corp., 477 U.S. at 324. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations omitted).

The Court's responsibility in assessing the merits of a summary judgment motion is not to try the issues of fact, but rather to "`determine whether there are issues of fact to be tried.'"Sutera v. Schering Corp., 73 F.3d 13, 16 (2d Cir. 1995) (quoting Katz v. Goodyear Tire Rubber Co., 737 F.2d 238, 244 (2d Cir. 1984)). The Court must draw all reasonable inferences and resolve all ambiguities in the nonmoving party's favor, and construe the facts in the light most favorable to the nonmoving party. See Anderson, 477 U.S. at 255; see also Sutera, 73 F.3d at 16.

If, however, the moving party meets its initial burden of demonstrating "proof of facts that would entitle the movant to judgment as a matter of law, the nonmoving party is required under Rule 56(e) to set forth specific facts showing that there is a genuine issue of material fact to be tried." Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir. 1993) (citations omitted). To satisfy this requirement, the nonmoving party "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible, or `upon the mere allegations or denials of the [nonmoving] party's pleading.'" Id. at 532-33 (quoting Fed.R.Civ.P. 56(e)) (citations omitted).

DISCUSSION PLAINTIFF'S MOTION TO STRIKE

Coregis moves to strike the affirmation of William G. Spratt, Esq. ("Spratt"), a licensed medical malpractice defense attorney, on the ground that Spratt's affirmation constitutes impermissible expert testimony. Spratt's affirmation was submitted in support of Defendants' opposition to Coregis' summary judgment motion and in support of Defendants' cross-motion for summary judgment.See Defs.' Aff. Supp. Mot. Summ. J., Ex. 11. The Court begins by first considering Coregis' motion to strike, as its decision may affect the disposition of the pending summary judgment motions.

I. Applicable Civil Discovery Rules

Rule 26(a)(2) of the Federal Rules of Civil Procedure requires that parties disclose to other parties the identity of expert witnesses and provide a written report that specifically describes the nature of the expert witness' opinion, supporting evidence, compensation, and qualifications. See Fed.R.Civ.P. 26(a)(2). Parties are further required to make these disclosures within 90 days before trial "[i]n the absence of other directions from the court, or stipulation by the parties. . . ." Finally, the parties must supplement these disclosure as required. Fed.R.Civ.P. 26(e)(1).

Rule 37(c) provides an almost automatic sanction for a failure to disclose under Rule 26(a):

(1) A party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at trial, at a hearing, or on a motion any witness or information not so disclosed.

Fed.R.Civ.P. 37(c)(1).

II. Spratt's Affirmation

In its motion to strike, Coregis argues that Spratt's affirmation contains conclusions of law that Defendants attempt to proffer as expert testimony. Coregis further contends that such an attempt is improper because Defendants did not disclose their intent to proffer expert testimony in accordance with the discovery scheduling order set by the Court.

Defendants essentially admit that they failed to disclose Spratt's expert testimony, and simply characterize this failure as an "omission." Lewis Johs' Mem. Law Opp'n Mot. Strike 1. Nevertheless, Defendants argue that the failure is harmless because the affirmation contains information, namely a "summary of the evidence supporting the specific contentions raised by Defendants," that is "not surprising to Coregis." As a result, Defendants request that the Court exercise its discretion and refrain from levying the sanction of precluding Spratt's affirmation.

On November 19, 2001, Magistrate Judge E.T. Boyle, who was assigned to this case at that thime, ordered, inter alia, that expert testimony, pursuant to Rule 26(a)(2), be disclosed on or before July 9, 2002. Docket No. 01 CV 3844, Entry 8. The parties never requested that the Court extend this date.

After reviewing Spratt's affirmation, the Court agrees that it is essentially a proffer of expert testimony. After stating that he is "familiar with the standards of legal practice for attorneys who handle medical malpractice defense matters," Spratt confirms that his affirmation is "submitted on the issue of whether or not [Lewis Johs] committed legal malpractice and whether . . . [Aviles] should have reasonably foreseen that her actions in representing [Dr. Wright] in the [Medical Malpractice Action] might give rise to a legal malpractice action." Spratt Affirm. at 1. Spratt's affirmation proceeds to recount portions of the State Court record, including Dr. Demopoulos' testimony and Aviles' motions for a mistrial. Spratt then opines that "[Aviles] did nothing wrong in relying upon the hospital in providing the correct pathology slides," "had every right to rely upon the expertise of Dr. Demopoulos," and that "losing Dr. Demopoulos' testimony did not severely undermine Dr. Wright's defense" because there were other witnesses on the issue of causation, and that Aviles "did not depart from accepted standards of legal practice." Spratt Affirm. at 5-6.

It is clear that Spratt's affirmation contains conclusions of law, pertaining to both the case at bar and potentially to the Legal Malpractice Action, that Coregis should have received an opportunity to rebut. As is evident from the pending motions, Spratt's opinion that "there is certainly no reasonable expectation by Aviles that her office would be sued in legal malpractice," Spratt Affirm. at 5, is one that Coregis clearly disputes.

In addition to concluding that Defendants violated Rule 26(a) and the governing discovery scheduling order by failing to disclose Spratt's affirmation, the Court finds that Coregis was prejudiced by Defendants' non-disclosure. As a result of Defendants' disclosure "omission," Coregis was deprived of a chance to take the deposition of Defendants' expert or to retain an expert of its own to rebut the statements and opinions contained in Spratt's affirmation.

Given the Court's finding that Defendants' non-disclosure was not harmless, the Court grants Plaintiff's motion to strike Spratt's affirmation and will not consider the statements contained therein when deciding the pending motions for summary judgment. See, e.g., 6 James Wm. Moore et al., Moore's Federal Practice ¶ 26.27[2][d] (3d ed. 1999) ("Thus, if a party's failure to disclose that an expert witness would testify to a certain opinion would cause the other parties prejudice because of a lack of time to prepare to refute the opinion . . ., the nondisclosure is not `harmless,' and exclusion of the opinion is proper.").

COREGIS' MOTION FOR SUMMARY JUDGMENT

I. Applicability of Exclusion B to Claims Made Against Lewis Johs and Aviles in the Legal Malpractice Action

A. Exclusion B

The primary issue raised by Coregis' motion for summary judgment is whether Exclusion B precludes insurance coverage for claims against Lewis Johs and Aviles in the Legal Malpractice Action. Following the language of Exclusion B, the Court must first determine if a genuine issue of material fact exists as to whether Lewis Johs and Aviles "knew or could have reasonably foreseen" before the effective date of the Policy that their acts, errors, or omissions during the Medical Malpractice Action would provide the basis of a claim or suit. See Policy at 6.

As noted in the Second Circuit, an insurance contract is interpreted under New York state law to give effect to the intent of the parties as expressed in the clear language of the contract. Westport Ins. Corp. v. Goldberger Dubin, P.C., No. 04 Civ. 4384, 2006 U.S. Dist. LEXIS 31329, at *6 (S.D.N.Y. 2006) (citing Newmont Mines Ltd. v. Hanover Ins. Co., 784 F.2d 127, 135 (2d Cir. 1986) (other citations omitted). If the language contained in the insurance contract is unambiguous, the Court must give the language its plain and ordinary meaning. Teichman v. Comm. Hosp. of W. Suffolk, 663 N.E.2d 628, 630 (N.Y. 1996).

With respect to the applicability of an exclusion, the insurer bears the burden of proving that a claim falls within the exclusion's scope. Vill. of Sylvan Beach, N.Y. v. Travelers Indem. Co., 55 F.3d 114, 115 (2d Cir. 1995) Specifically, "an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case." Sea Ins. Co., Ltd. v. Westchester Fire Ins. Co., 51 F.3d 22, 26 (2d Cir. 1995).

Exclusion B, as provided in the Policy, has been held to be clear and unambiguous under New York law; therefore, this Court must enforce the provision as written. See Westport Ins. Corp., 2006 U.S. Dist. LEXIS 31329, at *6, *15 (citation omitted). Additionally, when evaluating the applicability of Exclusion B to claims arising from the Medical Malpractice Action, the Court must disregard Lewis Johs' and Aviles' subjective beliefs regarding whether Dr. Wright would file suit, as such beliefs are irrelevant. See Westport Ins. Corp., 2006 U.S. Dist. LEXIS 31329, at *11 (citation omitted). Instead, the Court must engage in an objective inquiry, namely, whether or not, under the circumstances of this case, a reasonable lawyer would know or could reasonably foresee that Dr. Wright might file a legal malpractice claim. Westport Ins. Corp., 2006 U.S. Dist. LEXIS 31329, at *15-6.

B. Exclusion B's Application to the Case at Bar

In this case, it is undisputed that Aviles had knowledge of the alleged error giving rise to the Legal Malpractice Action, to wit, the distribution of the incorrect placenta slides to Dr. Demopoulos and her resulting incorrect testimony. The parties do dispute, however, whether Lewis Johs or Aviles either (1) knew that a legal malpractice claim might result from their actions or (2) could have reasonably foreseen that such a claim would result.

In support of its motion, Coregis introduces evidence that Aviles knew, at least seven months before the Policy became effective, that either she or Lewis Johs could be sued for malpractice. Specifically, Coregis proffers an on-the-record statement made during the Medical Malpractice Action proceedings by Aviles to the State Court: "If, indeed, a verdict comes in against Dr. Wright in excess of this policy, he may decide to sue my office for legal malpractice." Medical Malpractice Action Trial Tr. 12:4-7, Feb. 11, 1998, AM session.

In response to this evidence, Aviles asserts that the statement was made in the "passion of the moment," and that she was attempting to "impress upon the [State Court] that the only true remedy" in light of the slide review error was a mistrial. Aviles Dep. 38:1-10. Aviles further affirmed that she did not "personally believe" that there was a potential for a malpractice claim to be brought. Aviles Dep. 38:18-25.

The Court finds Aviles' arguments unpersuasive. Aviles' on-the-record statement makes clear that she was, at the very least, aware of the possibility that a legal malpractice claim might ensue from the slide review error. Although not precedential for this Court, the case of Coregis Ins. Co. v. Lyford et al., 21 F. Supp. 2d 695 (S.D. Tex. 1998), is particularly instructive, as it is materially similar to the case at bar. In that case, Mills Shirley, a law firm, and another named defendant, purchased in early 1994 a professional liability (claims-made) insurance policy from Coregis, the same professional liability insurer that is the plaintiff in the case at bar. Id. at 696. That policy also contained an Exclusion B, whose language is exactly the same as the exclusion in Lewis Johs' Policy. Id. During the application period, Mills Shirley circulated an insurance application to all partners and associates in order to inquire about potential claims, and ultimately certified to Coregis that it knew of no such claims.Id.

Lyford, a special municipal prosecutor, was an associate at Mills Shirley at the time the application for insurance was distributed, and remained an employee during his special appointment as prosecutor. Id. In June 1994, Lyford testified before a state court grand jury about his role as a special prosecutor. Id. During his sworn testimony, Lyford described a conversation he had with an assistant attorney general in March 1994, before Mills Shirley's insurance policy took effect, in which he stated that he expected to be sued for his actions in a case that he had prosecuted. Id. Within weeks of that testimony, both Lyford and Mills Shirley, on a theory of respondeat superior, were named as defendants in the first of two federal lawsuits alleging various claims such as malicious prosecution, negligence, and false arrest. Id. After Coregis began defending against the underlying lawsuits, it filed an action seeking a declaratory judgment that Exclusion B of the claims-made policy precluded insurance coverage. Id. at 666.

The Lyford court ultimately held that Lyford, as an insured under the policy, "knew or could have reasonably foreseen" before the policy's effective date that his actions as special prosecutor would provide the bases of the underlying lawsuits. Id. at 697. That court relied primarily on Lyford's sworn grand jury testimony concerning the possibility of a lawsuit against him. Id. at 699.

Before the Lyford court, Lyford admitted that he was aware of the possibility that he might be sued, but argued that he was not aware of a specific act that might form ths basis of a suit and that his grand jury testimony said nothing about the precise legal claims that he was facing. Id. The Lyford court rejected these arguments, reasoning that (1) Lyford's comments regarding the possibility of a claim were clearly related to his actions as special prosecutor in the cases for which he was actually sued and therefore Lyford had knowledge of the acts that could give rise to a suit and (2) "the possibility that the plaintiff in the underlying suit might assert different claims than Lyford . . . anticipated" was irrelevant. Id. The court then granted summary judgment in favor of Coregis because "there was no genuine issue of material fact on the question of Lyford's knowledge." Id. at 700.

Similar to the attorney's remarks in Lyford, Aviles' on-the-record remarks to the State Court regarding the possibility of a legal malpractice claim against Lewis Johs and/or Aviles unequivocally confirm her knowledge of the possibility that her acts, errors, or omissions during the Medical Malpractice Action could give rise to a legal malpractice claim from Dr. Wright. Thus, this Court concludes, as the Lyford court did, that there is no genuine issue of material fact that enables Defendants to survive summary judgment.

Although Aviles attempts to minimize the significance of this statement through her post hoc deposition testimony, these efforts are futile. A "lawyer is an officer of the court" and, as such, is "to be held strictly accountable for [the] statements or conduct which reasonably could have the effect of deceiving or misleading the court in the action to be taken in a matter pending before it." Klein by Klein v. Seenauth, 687 N.Y.S.2d 889, 897 (N.Y. Civ. Ct. 1999) (citations omitted). Although these are principles of which every attorney should be mindful, the State Court expressed these same ideas to Aviles the day before she made the statements that she now wishes to recant. Medical Malpractice Action Trial Tr. 14:21-25, 15:5-10, Feb. 10, 1998, PM session ("[W]e have all been in this business a very long time and we know that we have responsibilities to check what we're saying and doing, not only to the clients but to the Court as well."). Now, at this juncture, Aviles' contention that she acknowledged the possibility of a legal malpractice claim solely to persuade the State Court to grant a mistrial cannot, and should not, detract from the substance of the statement itself.

The lawyer's role as court officer admittedly places Lewis Johs and Aviles in a difficult position, given the context of this case. If this Court believes that Aviles' prediction of a legal malpractice claim was nothing more than empty rhetoric, Defendants may survive summary judgment, but Aviles' admission that the prediction was disingenuous may jeopardize her professional credibility, as well as the credibility of her firm. Such a result arguably taints the effectiveness of the entire state bar, as it is the sum of each attorney's integrity that creates the whole. See id. (citing N.Y. Code of Prof'l Responsibility EC 1-1) ("It is the ethical responsibility of every lawyer to maintain the integrity and improve the competence of the Bar to meet the highest standards.") (emphasis added). However, if this Court holds Aviles accountable for her statement, then the statement will prove fatal to Defendants' quest for insurance coverage. The Court appreciates this dilemma, recognizing that neither situation is ideal for Lewis Johs and Aviles. However, this Court cannot, as Aviles presumably encourages it to do, ignore the general principle that an attorney should be held accountable for statements made to a court during judicial proceedings.

With respect to Aviles' second equivocation, namely, that she did not "personally believe" that Dr. Wright would sue for malpractice, the Court reiterates that any dispute regarding whether Aviles or Lewis Johs believed — on the basis of their views regarding the likelihood of success of a legal malpractice suit, their relationship with Dr. Wright, or their impression of Dr. Wright's reaction to the ultimate outcome of the Medical Malpractice Action — that Dr. Wright would in fact make a malpractice claim is not relevant for this Court's analysis.See Mt. Airy Ins. Co. v. Klatsky Klatsky, 954 F. Supp. 1073, 1080 (W.D. Pa. 1997).

Because the facts of this case indicate that Lewis Johs and Aviles had knowledge of the fact that a legal malpractice claim might result from the Medical Malpractice Action, the Court finds that Exclusion B precludes insurance coverage for Lewis Johs and Aviles for claims arising therefrom. Coregis states that "should this Court find that Exclusion B applies," it will voluntarily dismiss Count II of its First Amended Complaint. Pl.'s Reply Mem. Law Supp. Mot. Summ. J. at 14. Because the Court has found that Exclusion B applies, Count II is hereby dismissed.

DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

I. Coregis' Waiver of the Right to Disclaim Coverage and of the Right to Rescind the Policy

In the their cross-motion for summary judgment, Defendants argue that Coregis (1) waived its right to disclaim coverage for claims arising from the Medical Malpractice Action based on the applicability of Exclusion B and (2) waived its right to rescind the Policy based on a material misrepresentation in Lewis Johs' insurance application. To substantiate these arguments, Defendants allege that Coregis accepted premiums for approximately two years after receiving notice from Lewis Johs of the potential claim against the firm, and renewed the policy twice at higher rates to reflect the increased insurance risk and failed to inform Lewis Johs in a timely fashion that its legal malpractice claim would not be covered.

A. Coregis' Waiver of the Right to Disclaim Coverage Based on the Applicability of Exclusion B

New York courts, in establishing various general principles regarding disclaimers and denials of insurance coverage, have recognized that insurance coverage is not merely what is found under the heading "insuring agreement," which affirmatively indicates the coverage that is included, but is also the exclusion clauses, which describes expressly what is not covered by the insurance policy's provisions. Albert J. Schiff Assocs., Inc. v. Flack, 417 N.E.2d 84, 86 (N.Y. 1980). Where an exclusion makes clear that coverage under an insurance policy does not exist, coverage cannot be attained by waiver, which is a voluntary and intentional relinquishment of a known right. Id. at 87. The purpose of waiver is to avoid "forfeitures of [an] insured's coverage [that] would otherwise result where an insured breached a policy condition," such as, failure to give timely notice of a loss. Id. However, where the issue is the existence or nonexistence of coverage (that is, the insuring clause and exclusions), the doctrine of waiver is simply inapplicable under New York law. Id.

In this case, Coregis and Defendants dispute whether or not claims arising from the Legal Malpractice Action are covered by the Policy. Such a dispute, in the Court's view, falls within the ambit of the coverage-no coverage dichotomy explained inSchiff. As a result, Defendants' arguments regarding Coregis' alleged waiver of the right to disclaim coverage for claims arising from the Medical Malpractice Action cannot be sustained.

B. Coregis' Waiver of the Right to Rescind the Policy

In light of this Court's finding that Exclusion B in this case, Defendants' arguments regarding Coregis' alleged waiver of the right to rescind, including those related to Coregis' acceptance and increase of premium payments and alleged untimely disclaimer, are now moot because Coregis has agreed to voluntarily dismiss its request for a declaration regarding the right to rescind the Policy, as described in Count II of the First Amended Complaint.

II. Equitable Estoppel Based on Coregis' Appointment of Rivkin Radler as Defense Counsel for Lewis Johs and Aviles

Defendants further argue, in sum and substance, that Coregis is equitably estopped from disclaiming coverage under the Policy because: (1) Coregis did not advise Lewis Johs of its right to select independent counsel at Coregis' expense; (2) Coregis violated Lewis Johs' attorney-client privilege by using the Rivkin Radler Report to deny coverage; and (3) Coregis undertook Lewis Johs' defense without timely reserving its rights and giving notice of disclaimer and conducted substantive negotiations of the Legal Malpractice Action.

The Court first notes that, under New York law, the principles of equitable estoppel are called upon to intervene in an "appropriate" case, such as "where an insurer, though in fact not obligated to provide coverage, without asserting policy defenses or reserving the privilege to do so, undertakes the defense of the case, in reliance on which the insured suffers the detriment of losing the right to control its own defense." Boston Old Colony Ins. Co. v. Lumbermens Mut. Cas. Co., 889 F.2d 1245, 1247 (2d Cir. 1989) (quoting Schiff Assocs., Inc., 417 N.E.2d at 87). In such circumstances, although coverage does not exist, the insurer will not be heard to say so. Id. The Court will evaluate each argument set forth by Defendants in light of this standard.

A. Coregis Had No Obligation to Designate Independent Counsel.

Lewis Johs first contends that Coregis failed to designate separate coverage counsel immediately upon being presented with information suggesting that a coverage question exists, and thus estoppel is warranted. Lewis Johs also asserts that Coregis failed to advise them of their right to select independent counsel to defend them at Coregis' expense.

An insured is entitled to select its counsel, whose reasonable fee is to be paid by the insurer, when a conflict of interest between an insurer and its insured arises that places the loyalty of the insured's counsel to that insured in doubt. Emons Indus. Inc. v. Liberty Mut. Ins. Co., 749 F. Supp. 1289, 1297 (S.D.N.Y. 1990) (citations omitted). As the New York Court of Appeals has noted, a defense counsel's loyalty to the insured is at issue when "the defense attorney's duty to the insured would require that he defeat liability on any ground and his duty to the insurer would require that he defeat liability only upon grounds which would render the insurer liable." Public Serv. Mut. Ins. Co. v. Goldfarb, 425 N.E.2d 810 at n. * (N.Y. 1981); see also Klein v. Salama, 545 F. Supp. 175, 179 (E.D.N.Y. 1982).

Defendants' position that Coregis was obligated to designate separate counsel once it realized that a coverage issue may exist is simply unsupported by New York law. The case on which Lewis Johs relies for this proposition, Prashker v. U.S. Guarantee Co., 136 N.E.2d 871 (N.Y. 1956), does not in fact create such a rule. Rather, Prashker confirms that, when a conflict of interest arises between an insurer and an insured, the insured should select their own counsel and the expense should be covered by the insurer. See Prashker, 136 N.E.2d at 876. In this case, Lewis Johs has not alleged that there is an actual or potential conflict of interest with Coregis. See Elacqua v. Physician's Reciprocal Insurers, 21 A.D.3d 702 (N.Y.App.Div. 2005) (holding that an insurer was estopped from asserting coverage defenses because insurer did not apprise insured of right to independent counsel after conflict of interest arose, wherein certain direct claims against the insured physicians were covered while vicarious liability claims for the negligence of a nurse-practitioner were not).

In the absence of such a conflict, Lewis Johs is not entitled to independent counsel. Thus, Defendants' motion for summary judgment cannot be granted on this ground.

B. Coregis Did Not Violate the Attorney-Client Privilege Between Lewis Johs and Rivkin Radler.

Lewis Johs next contends that Coregis should be estopped from disclaiming coverage because Coregis violated Lewis Johs' attorney-client privilege with Rivkin Radler by using Rivkin Radler's litigation report to deny coverage.

Where, as in this case, an insurer retains counsel to defend an insured in litigation, Defendants correctly observe that the attorney's "paramount" client is the insured. Feliberty v. Damon, 72 527 N.E.2d 261, 265 (N.Y. 1988). However, courts in the Second Circuit have recognized the "common interest rule," a limited exception to the general rule that the attorney-client privilege is waived when a protected communication is disclosed to a third party outside the attorney-client relationship."Bruker v. City of N.Y., No. 93 CV 3848, 2002 U.S. Dist. LEXIS 5334, at *11 (S.D.N.Y. Mar. 29, 2002). This rule allows an insurer aligned in interest with the insured to have access to privileged communications between the insured and its counsel, without breach of the attorney-client privilege. See N. River Ins. Co. v. Columbia Cas. Co., No. 90 CV 2518. 1995 U.S. Dist. LEXIS 53, at *4 (S.D.N.Y. Jan. 5, 1995); Vt. Gas Sys., Inc. v. U.S. Fid. Guar. Co., 151 F.R.D. 268, 277 (D. Vt. 1993).

The Court concludes that the common interest rule clearly protected Coregis' review and use of the research report from Rivkin Radler to disclaim coverage for Lewis Johs and Aviles under the Policy. As discussed above, Lewis Johs has not shown any conflict of interest between itself and Coregis with respect to the defense of claims arising from the Medical Malpractice Action, thus suggesting that the interests of both parties were aligned at the time that Rivkin Radler drafted its report. Indeed, both Coregis and Lewis Johs had an interest in successfully defending against, or settling, any claims that Dr. Wright would bring against the firm or its attorneys. It is clear that Coregis requested that Rivkin Radler prepare a litigation report in order to promote this interest.

Although Lewis Johs makes the bald assertion that Coregis "solicit[ed], elicit[ed], and manipulate[d] information from [Lewis Johs] via [Rivkin Radler]," this assertion is insufficient to demonstrate with specificity how Coregis' actions are proscribed by New York law. Therefore, Defendants' motion for summary judgment must fail on this ground.

C. Coregis' Reservation of Rights Was Not Untimely.

Defendants further contend that Coregis' February 2001 rights reservation letter and its March 2001 disclaimer notice were unreasonably delayed, given that Lewis Johs provided Coregis with notice of a potential claim in December of 1998. Moreover, Defendants argue that they suffered prejudice as a result of this untimely notice, because its settlement position with Dr. Wright was compromised.

The reasonableness of any delay in the issuance of a disclaimer is judged from the time that the insurer is aware of sufficient facts to issue such disclaimer. Bluestein Sander v. Chi. Ins. Co., 276 F.3d 119, 122 (2d Cir. 2002). New York law also provides that a "delay in giving notice of disclaimer of coverage, even if unreasonable, will not estop the insurer to disclaim unless the insured suffered prejudice from the delay."Fairmont Funding Ltd. v. Utica Mut. Ins. Co., 264 A.D.2d 581, 581-2 (N.Y.App.Div. 1999) (citations omitted).

The Court concludes that Coregis' rights reservation and ultimate disclaimer were neither unreasonably delayed nor prejudicial to Defendants. In New York, the duty to defend is triggered by the filing of a complaint containing allegations that could possibly bring the claims within the scope of coverage provided by the insurance policy. Smart Style Indus. v. Pennsylvania Gen. Ins. Co., 930 F. Supp. 159, 163 (S.D.N.Y. 1996) (citing Recant v. Harwood, 222 A.D.2d 372, 373 (N.Y.App.Div. 1995) (noting that "the duty to defend is triggered if facts alleged in the complaint fall within the scope of coverage"). The Policy's language regarding Coregis' duty to defend is even more liberal than New York law generally, as it invokes that duty not only upon the commencement of a lawsuit, but whenever any demand is made upon an insured. Policy 1, at § II.A.; 3, at § IV.

The language of the Policy make clear that Coregis' actual duty to defend did not arise when Lewis Johs filed a notice of a potential claim, as Defendants assert. Rather, such duty did not take effect until, at the earliest, November 2000, when Lewis Johs informed Coregis that Dr. Wright wished to engage in settlement discussions. There is nothing in the record that indicates Coregis was aware of any claims against Lewis Johs prior to that time.

To the extent that Coregis' assignment of Rivkin Radler to represent Lewis Johs can be construed as an "undertaking" of Lewis Johs' defense, their subsequent disclaimer was not untimely. After receiving notice of potential settlement discussions between Lewis Johs and Dr. Wright on November 16, 2000, the record indicates that Coregis assigned Rivkin Radler as defense counsel on November 20, 2000. Coregis issued its rights reservation three months later, in February 2001, specifically, after reviewing the information contained in the January 2001 Rivkin Radler Report. This three-month interval, in light of the facts of this case, cannot be deemed as unreasonable. See Boston Old Colony, 889 F.2d 1245 (holding that the insurance company was estopped from disclaiming liability; ten-month delay in disclaiming deemed untimely and prejudicial);State Farm Mut. Ins. Co. v. Pizzonia, 147 A.D.2d 703 (N.Y.App. Div. 1989) (holding that the insurance company was estopped from disclaiming liability; 2.5 years delay deemed untimely and prejudicial). Therefore, Coregis had no duty to issue a rights reservation letter soon after receiving notice of a potential claim in December 1998 and, thus, did not unreasonably delay its issuance.

In light of the above, Defendants are not entitled to summary judgment on this ground.

III. Coregis' Uncertainty Regarding Whether the Policy Would have Issued if the Potential Claim had been Disclosed

In a final attempt to secure summary judgment, Lewis Johs argues that Coregis' inability to state with certainty that it would not have issued the Policy had Lewis Johs disclosed the potential claim against it warrants summary judgment on Coregis' second request for declaratory relief, namely, that Coregis has the right to rescind the Policy. This argument is now moot, as Coregis has withdrawn this request.

CONCLUSION

For the reasons provided above, Coregis' motion to strike Defendants' expert affirmation is hereby GRANTED. Coregis' motion for summary judgment is hereby GRANTED with respect to Count I of the First Amended Complaint. Defendants' motion for summary judgment is hereby DENIED.

Further, IT IS HEREBY DECLARED that Coregis has no duty to afford coverage to or to defend or indemnify Lewis Johs or Aviles in connection with any claim arising from the lawsuit entitled ASHLEY ANDREE, an infant by her Mother and Natural Guardian, CHRISTINE ANDREE, as Assignee of EDWARD WRIGHT, M.D., and EDWARD WRIGHT, M.D., Individually v. RITA DEMOPOULOS, M.D., LEWIS, JOHS, AVALLONE, AVILES KAUFMAN, LLP, DEBORAH A. AVILES, and MEDICAL LIABILITY MUTUAL INSURANCE COMPANY, filed in the Supreme Court of the State of New York, County of Nassau, Index No. 04-7059, or in any other claim or suit arising from the Medical Malpractice Action, as defined herein, pursuant to Exclusion B of the professional liability insurance policy between Coregis and Lewis Johs (Policy No. NRL-001027-8) for the policy period of September 2, 1998, and September 2, 1999.

IT IS FURTHER ORDERED that: (1) Count II of the First Amended Complaint is DISMISSED without prejudice; (2) Lewis Johs' and Aviles' Counterclaim is hereby DISMISSED with prejudice; and (3) Medical Liability's Counterclaims are hereby DISMISSED with prejudice.

The Clerk of the Court is directed to close this case.

SO ORDERED.