​Jim Thurston (Partner-Chicago) and Jonathan Meer (Partner-New York) prevailed in a coverage lawsuit before the U.S. District Court for the Southern District of New York. The underlying lawsuit involved a dispute between three shareholder brothers; one sued the other two for violations of their Shareholder Agreement, alleging breach of contract and breach of fiduciary duties by the insured’s Board, which “rubber stamped” the two brothers’ conduct. In the underlying lawsuit the two insured brothers sued their D&O insurer, which denied coverage based on a broadly worded  ​ Contract Exclusion. The insured brothers then filed the coverage lawsuit against the firm’s carrier client for declaratory judgment and breach of contract. The judge ruled in favor of our client and dismissed the case with prejudice, finding “claim” and therefore the exclusion applies to “the entire legal proceeding rather than each separate cause of action raised in it.” The court further ruled that even if “claim” meant each cause of action, the “arising out of” language of the Contract Exclusion was broad enough to exclude coverage for the entire underlying lawsuit, and negate [our client’s] duty to defend. Finally, the insureds argued that the underlying lawsuit’s allegations of breach of fiduciary duty triggered our client’s duty to defend, but the district court disagreed, holding “allegations of wrongful conduct alone are not enough to constitute a claim.” The New York District Court then dismissed the coverage lawsuit with prejudice, saving our client’s $3 million limit.