[1] Standard for determining an insurance accident in a liability insurance policy and method for interpreting the insurance clause / Whether the insured’s liability for damages against a third party should be determined by the method stipulated in the Commercial Act or the insurance clause in order to exercise the right to claim insurance under an attorney liability insurance policy (affirmative)

[2] The case holding that in a case where Gap, after entering into a liability insurance contract for professional attorneys with Eul insurance company, entered into a joint contract for registration duties with the head of the management office representing the sectional owners of apartment houses, and received registration expenses from the sectional owners, the registration officer Gap, who was employed by Gap, delayed processing of part of the above registration expenses for personal purposes and notified Byung that Byung would be liable for damages if Eul failed to perform the registration duties up to that time while notifying Gap to perform the registration duties within a fixed period, and Eul filed a claim for insurance proceeds against Eul after preparing the registration expenses short of Gap's personal expenses and completing the registration duties, the case holding that in a case where Gap cannot be deemed as satisfying the requirements for the occurrence of the right to claim insurance claims incorporated into the insurance contract and the insurance clause, merely by making a voluntary consumption of the expenses for the entrusted duties and by paying them to Gap for the entrusted affairs

[1] Articles 719 and 723 of the Commercial Act, Article 5 of the Regulation of Standardized Contracts Act / [2] Articles 719 and 723 of the Commercial Act, Article 5 of the Regulation of Standardized Contracts Act

[1] Supreme Court Decision 98Da20752 delivered on October 23, 1998 (Gong1998Ha, 2730) Supreme Court Decision 2002Da30206 Delivered on September 6, 2002 (Gong2002Ha, 2405) Supreme Court Decision 2004Da16976 Delivered on April 28, 2006 (Gong2006Sang, 908)

Plaintiff (Law Firm KEL, Attorneys Hon-wing et al., Counsel for the plaintiff-appellant)

Hyundai Marine Fire Insurance Co., Ltd. (Attorney Park Sung-won et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2013Na4052 decided February 13, 2014

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. An insurer of a liability insurance contract is liable to indemnify a third party for any accident that happens during the insurance period (Article 719 of the Commercial Act). An insurance accident that forms the basis for the liability for payment of insurance proceeds shall be determined by comprehensively taking into account the contents of the insurance clause included in the insurance contract and the content of the insurance policy citing the insurance clause. Unlike general legal acts, the interpretation of the insurance clause shall be based on the average customer’s understanding potential without considering the intent or specific circumstances of the individual contractual party, and shall be objectively and uniformly based upon the overall interests of the insurance organization (see Supreme Court Decision 98Da20752, Oct. 23, 1998, etc.). Since attorney liability insurance is a type of liability insurance, in order to exercise the right to claim insurance proceeds under the insurance contract, the liability for the insured’s third party should be determined by the method prescribed in the Commercial Act or the insurance clause (see Supreme Court Decision 2002Da3206466, Sept. 6, 2002).

2. The reasoning of the lower judgment and the record reveal the following facts.

1) On February 7, 2011, the Plaintiff, an attorney-at-law, entered into a contract for liability insurance for attorneys-at-law (hereinafter “instant insurance”) with the Defendant, the registered insured, the Plaintiff’s insurance period from December 1, 2010 to December 1, 201, and the maximum compensation amount is KRW 200,000,000 (self-paid KRW 5,000,000). The said insurance terms and conditions are English. At the time of entering into the insurance contract, the said insurance terms and conditions are deemed to be an English language, and the translation issued to the Plaintiff is deemed to be a “employee,” and the content of the insurance contract based on the translation cannot be asserted.”

2) 이 사건 보험계약의 보험약관에는 보상대상에 관하여 “보험기간 ... 내에 최초로 제기되고, 보험회사에 통지된 배상청구(claim)에 따른 손해(damages) 및 청구비용(claims expenses)을 지급한다(We will pay on behalf of an insured “damages” and “claims expenses” for which “claim” is first made during the “policy period” and reported to us within the “policy period”...)”고 되어 있다.

3) 그리고 그 보험약관에서 말하는 ‘손해(damages)’는 “기명피보험자 또는 기명피보험자를 대신하여 제3자를 위하여 전문적인 법률서비스를 수행하는 과정에서 발생한 실수, 누락, 과실 또는 인적 침해나 전문적인 법률서비스의 불이행으로부터 발생한 것이어야 하고(Such “damages” must arise out of an error, omission, negligent act or “personal injury” in the rendering of or failure to render “professional legal services” for others by you or on your behalf)”, 또한 “판결, 보상결정 또는 합의의 결과로 피보험자가 법적으로 지급하여야 할 책임이 있는 보상적 손해를 의미하며, 그 합의는 보험자의 도움을 받아 협상하고 보험자의 승인을 받은 것이어야 한다(“Damages” means compensatory damages which an insured becomes legally obligated to pay as a result of any judgement, award or settlement, provided any settlement is negotiated with the assistance and approval of us)”고 되어 있다.

4) In addition, the term “compensation claim” as referred to in the above insurance clause refers to demanding the insured to pay money or services to the insured by asserting that the damage was caused by the foregoing cause (hereinafter “Claim”) (the term “Saim”) is provided for in the foregoing insurance clause to see that she is about to sheer, o, neglient’s actionor in "person in jury", to her first to her first to her first to her first to her first to her first to her first to her first to her second to her first to her first to her second to her second to her second to her second to her second to her second to her second to her second to her second to her second

5) On March 9, 2011, the Plaintiff entered into a contract with Nonparty 1, the head of the management office representing the sectional owners of ○○○○○○○○ apartment (hereinafter “instant apartment”) located in the Nam-gu, Incheon Metropolitan City (hereinafter “instant apartment”), and 400 households among the total 888 households of the instant apartment, and received the registration expenses from the sectional owners of the apartment as a new bank account in the name of the Plaintiff.

6) From March 21, 2011 to May 20, 2011, Nonparty 2 used KRW 126,50,000, out of the money deposited in the said new bank account for personal purposes, and used KRW 178,250,00 as the registration fee for another apartment that has already been consumed. After that, Nonparty 2 recovered part of the amount that the Plaintiff became aware of.

7) When the process of registration was delayed due to these circumstances, Nonparty 1 sent to the Plaintiff on June 23, 201, a letter of public notice stating that “A resident’s registration duty was delayed and a civil petition was filed against the payer household by June 30, 201, and the household not received was returned to July 11, 2011, to the effect that “after which the resident’s registration fee was returned, Nonparty 1 shall be liable for the monetary and mental damage that the resident received.” This reached the Plaintiff around that time.

8) Accordingly, the Plaintiff prepared the insufficient registration cost personally and completed all the registration work of the instant apartment that was delegated on November 201.

3. We examine the above facts in light of the legal principles as seen earlier.

The instant insurance is a liability insurance to compensate the Plaintiff for the liability for damages to be borne by a third party while providing legal services as an attorney. As such, Nonparty 2, the chief registration officer, cannot be said to be an insurance accident in itself where Nonparty 2 voluntarily consumeds the registration cost. The insurance accident may be deemed to have occurred due to the Plaintiff’s failure to perform delegated registration duties, etc., on the delegating person.

In addition, according to the insurance clause of this case, in order to recognize the insurance claim of the insured as the insured, ① there is real number of damages, neglect, etc. or nonperformance of obligation in the course of providing professional legal services, ② the damage to a third party is caused, ③ the injured party shall claim compensation from the injured party, ④ the existence and scope of liability for compensation shall be determined by an agreement made with the judgment, the decision of compensation or the insurer’s approval.

However, in this case, when the processing of delegated affairs was delayed, Nonparty 1, the head of the apartment management office of this case, notified Nonparty 2 that he would be liable for damages if he did not perform the delegated affairs until the time notified the implementation by setting a deadline. Accordingly, the duty to perform legal services related to the handling of the registered delegated affairs of this case was delayed, but the performance was completed in accordance with the purport of delegation. Therefore, the owner of the apartment of this case did not have any damage caused by the nonperformance of the registered affairs. In addition, there was no claim for damages, nor was it finalized by the judgment, the compensation decision, or the agreement approved by the Defendant, the insurer. Ultimately, Nonparty 2, the head of the legal office of the Plaintiff, voluntarily consumed the expenses for the handling of delegated affairs, and the Plaintiff’s payment to the delegated affairs cannot be said to satisfy the requirements for the formation of the insurance contract of this case and the insurance claim incorporated into the contents thereof.

Nevertheless, the lower court acknowledged the Defendant’s obligation to pay the insurance money by deeming that the Plaintiff’s personal preparation of the registration cost embezzled by Nonparty 2 and the execution of the instant registration work could be deemed to have paid damages equivalent to the registration cost to the sectional owners of apartment buildings. This is a misunderstanding of the principle of objective interpretation of the insurance terms and the legal nature of the instant insurance as liability insurance. The allegation in the grounds of appeal Nos. 1 through 4 is with merit.

4. The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)