First American Title Insurance Company, Plaintiff-Appellant v. Edward Lawson, Jr., Esq., Wheeler, Lawson & Snyder…

Summary

The Supreme Court of New Jersey held that the professional liability policy was void as to the partnership and the two partners who engaged in fraud (Wheeler and Lawson) but remained in force for the innocent partner, Snyder. The Court affirmed the Appellate Division in part, reversed it in part, and remanded for further consideration. A dissent argued that the policy should be rescinded in its entirety. The decision balances the insurer’s right to rescind for material misrepresentation against the public policy protecting innocent attorneys in a limited liability partnership.