Zukaitis v. Aetna Casualty & Surety Co.

Raymond R. Zukaitis (plaintiff), a physician, was issued a professional-liability insurance policy from Aetna Casualty and Surety Company (Aetna) (defendant) through its agent, the Ed Larsen Insurance Agency, Inc. (Ed Larsen). Dr. Zukaitis’s policy was for a period from August 31, 1969, to August 31, 1970. On August 7, 1971, Dr. Zukaitis received written notification of a claim for malpractice that allegedly took place on September 27, 1969. On August 10, 1971, Dr. Zukaitis telephoned Ed Larsen about the claim and forwarded the written claim. On August 11, 1971, Ed Larsen erroneously referred the claim to St. Paul Fire and Marine Insurance Company (St. Paul), an insurance company that insured Dr. Zukaitis from August 31, 1970, to August 31, 1971. However, at the time of the alleged malpractice, Dr. Zukaitis was insured by Aetna. The agency contract between Aetna and Ed Larsen was terminated effective August 1, 1970, and Ed Larsen placed Dr. Zukaitis’s policy with St. Paul. On November 22, 1971, the malpractice action was brought against Dr. Zukaitis, who was defended by attorneys for St. Paul. On January 25, 1974, St. Paul discovered it was not the carrier for Dr. Zukaitis at the time the alleged malpractice occurred and withdrew from the case after advising Dr. Zukaitis and Aetna. On May 28, 1974, Dr. Zukaitis demanded Aetna defend him in the matter. Aetna refused. Dr. Zukaitis retained his own attorneys. Dr. Zukaitis sought a declaratory judgment against Aetna to determine whether Aetna was obligated under the policy to defend Dr. Zukaitis on the malpractice claim. The district court found for Aetna. Dr. Zukaitis appealed to the Nebraska Supreme Court.