Beruflich Dokumente
Kultur Dokumente
No. 13-1721
No. 13-1722
Appeal from the United States District Court for the District of
South Carolina, at Charleston.
Richard Mark Gergel, District
Judge. (2:12-cv-00194-RMG)
Argued:
Decided:
June 8, 2015
Before KING and FLOYD, Circuit Judges, and DAVIS, Senior Circuit
Judge.
cross-appeals
arise
out
of
an
insurance
coverage
Suttons
Company
former
insurers,
(FirstPro)
(MedPro)
and
First
the
Professional
Medical
Insurance
Protective
Company
declaratory
bench
trial,
judgment
the
district
action
court
in
federal
ruled
that
court.
After
MedPro,
but
not
FirstPro, has a duty to defend Dr. Sutton and pay damages as may
be
required
under
the
MedPro
policy.
For
the
reasons
that
She
Nathan
was
born,
he
was
documented
to
be
abnormally
he
was
Carolina
transferred
Hospital
to
after
the
Medical
experiencing
J.A. 715.
University
seizures
in
of
the
nursery.
After
Dr. Sutton.
Id.
During a later
visit with Dr. Sutton in August 2004, Amy Moore told her that
Nathans
tests
were
treating
physician
expected
was
to
hopeful
be
normal
there
and
would
Id. at 716.
that
be
Nathans
little
to
no
letter
Hospital
from
the
disclosing
Risk
that
Management
it
had
Department
received
at
St.
request
Francis
for
Amy
Moores medical records from June 22, 2004 (the day Nathan was
born).
request
because
of
ongoing
Risk
Management
activities
to
J.A.
The letter further stated that Dr. Sutton could review the
4
hospitalization
provided.
At
the
time
she
received
the
letter, Dr. Sutton did not remember Amy Moore as her patient or
the treatment she provided her; thus, the only information she
knew about Amy Moore was contained in the St. Francis letter.
Critical to the district courts findings and conclusions
in this case, Dr. Sutton testified that upon her receipt of the
letter,
she
called
her
then-insurance
company,
MedPro,
whose
She
further testified that during this call, she advised the MedPro
representative with whom she spoke of the contents of the letter
from St. Francis.
January
2012,
FirstPro
filed
complaint
based
on
Carolina,
seeking
declaratory
judgment
that
FirstPro
J.A. 26.
5
That provision
triggered
J.A. 644.
because
Dr.
Suttons
2008
call
to
MedPro
against
FirstPro
and
filed
third-party
policy.
MedPros
policy
explicitly
states
that
the
of
this
obtainable
circumstances
policy
and
information,
of
the
the
report
including
incident;
the
includes
the
nature
all
time,
and
reasonably
place
extent
of
and
the
J.A. 592.
contends that her call was enough to relieve her of (or satisfy)
her duty to report to MedPro a potential claim.
In
argued
due
course,
that
FirstPro
the
Moores
owed
Dr.
intervened
Sutton
as
coverage
defendants
for
the
and
Moore
Lawsuit. 1
B.
After
the
close
of
discovery,
the
insurers
moved
for
district
MedPros
court
motion,
the
denied
both
district
motions.
court
stated
With
that
respect
there
was
to
a
As to
regarding
the
St.
Francis
letter
triggered
Exclusion
held a
witnesses,
Joseph
Dr.
specialist.
called
Dr.
MedPro
received
Sutton
Sutton
and
and
testified
notified
medical
records
the
Costy,
to
the
MedPros
following:
representative
request
claims
letter
that
from
(1)
she
she
had
St.
Francis
Hospital; (2) she told the MedPro representative the name Amy
Moore, gave the representative
as
to
the
procedures
of
MedPros
call
and
claims
the
J.A. 717.
reliability
testified
that
the
these
call
call
center
center
staff
procedures,
and
Costy
procedures
were
generally reliable.
Upon conclusion of the bench trial, the district court made
several findings of fact.
the
contents
of
the
St.
Francis
letter
and
Costys
was
failed
more
to
likely
follow
than
company
not
[that]
the
procedures
to
MedPro
create
call
an
center
electronic
J.A. 719.
operators
claims
process
specific
memory
undertaking
and,
in
of
making
light
series
of
the
Dr.
call
to
of
tasks
Suttons
MedPro,
to
start
the
credible
and
the
Court
is
In
light
of
the
above
findings,
the
district
court
concluded that Dr. Sutton met her burden of showing that she
provided
MedPro
timely
and
sufficient
notice
of
potential
court concluded that Dr. Suttons call to MedPro about the St.
Francis letter qualified as a report of a medical incident to an
insurer prior to the inception of the FirstPro policy, and as
such, FirstPro met its burden of showing that it is entitled to
exclude
coverage
under
Paragraph
11(b)
of
its
policy.
the
the
district
district
courts
courts
order
decision,
that
it
MedPro
had
timely
duty
to
provide coverage for the Moore Lawsuit and Dr. Sutton filed a
protective
cross-appeal
from
the
district
courts
order
that
factual
determination
representative
of
the
that
contents
Dr.
of
Sutton
the
St.
notified
Francis
MedPro
letter
in
2008, we first address the MedPro appeal and then resolve Dr.
Suttons protective cross-appeal.
10
MedPro
presents
four
bases
for
reversing
the
district
reported
potential
claim
to
MedPro
is
clearly
the
bench
trial.
None
of
MedPros
arguments
are
MedPro
has
duty
to
defend
Dr.
Sutton
in
the
Moore
Lawsuit.
A.
This Court review[s] a judgment following a bench trial
under
mixed
standard
of
review
factual
findings
may
be
Roanoke
Cement Co., LLC v. Falk Corp., 413 F.3d 431, 433 (4th Cir.
2005).
approach
the
interpretation
of
contracts,
insurance
and
must
give
policy
language
its
plain,
Ins. Co., 757 S.E.2d 399, 406 (S.C. 2014) (quoting Gambrell v.
Travelers Ins. Co., 31 S.E.2d 814, 816 (S.C. 1983)).
Thus, when
omitted).
Under the MedPro policy, the insurer only has a duty to
defend or pay damages on a potential claim that was reported to
[MedPro] during the term of the policy and the report includes
all reasonably obtainable information, including the time, place
and circumstances of the incident; the nature and extent of the
patients injuries; and the names and addresses of the patient
and any available witnesses.
Suttons
2008
call
to
J.A. 592.
MedPro
satisfied
provision,
the
only
provision.
substantial,
And
second,
not
it
strict,
found
that
compliance
specific
with
the
information
Contrary to
direction
insureds
must
from
comply
the
South
strictly
Carolina
with
In light of the
Supreme
conditions
Court
that
precedent,
the
type
determining
of
compliance
that
the
was
policy
required,
requires
it
the
did
not
specific
err
in
type
of
It therefore
two
reasons.
First,
the
most
natural
reading
of
the
in
their
plain,
ordinary,
and
popular
sense.).
reported
regardless
of
whether
they
are
reasonably
Global
Sun
Pools,
Inc.,
644
S.E.2d
718,
See Chassereau
722
(S.C.
2007)
give
the
specific
types
of
information
listed
in
the
Although it is
undisputed that Dr. Sutton called MedPro during the term of the
policy, the parties disagree as to whether she (1) reported a
potential
claim
and
(2)
supplied
all
reasonably
obtainable
information.
Under MedPros policy, a potential claim is an incident
which the Insured reasonably believes will result in a claim for
damages.
J.A. 593.
MedPro
policy
and
has
never
believed
that
the
letter
however,
overlooks
critical
point:
the
Its
term
standard.
In
this
light,
the
proper
inquiry
is
believed
that
the
May
2008
letter
from
St.
Francis
Hospital
the
relationship
representation
with
the
other
will
not
adversely
client,
is
affect
measured
under
the
an
whether
reasonable
physician
of
the
same
branch
of
same
or
similar
circumstances).
Because
reasonable
the
incident
would
result
in
claim
for
damages.
16
We
respect
thoughtful
the
views
dissenting
set
opinion.
forth
in
Contrary
our
to
good
the
friends
dissents
the
plain
language
subjective/objective
hybrid
of
the
[MedPro]
analysis,
the
policy
dissent
requires
concludes
As the district
call
upon
learning
the
contents
of
the
letter
she
dissents
controlling
harsh
authority.
result
Not
is
single
not
justified
opinion
from
by
the
any
South
word
Insured
in
its
definition
of
potential
claim
Notably,
presented
an
the
one
published
opportunity
to
federal
deal
with
appellate
this
case
MedPro
that
policy
Mayo Health Sys. v. Med. Protective Co., 639 F.3d 806 (8th Cir.
2011).
18
jury
trial
on
the
issue
which
necessitated
of
whether
the
insured
this
dual
inquiry
was
materially
There, the
claims made policy provided coverage for any claim for damages
filed during the policy period and defined a claim filed as
the
receipt,
by
MedPro
written
notice
of
Clinic]
reasonably
result.
Id. at 811.
during
medical
believes
the
term
incident
of
from
allegations
of
the
policy,
which
of
[Owatonna
liability
may
Id. at 809.
analysis
of
the
relevant
policy
provision
and,
Id.
S.C. State Budget & Control Bd. v. Prince, 403 S.E.2d 643, 646
(S.C.
1991)
([I]nsurance
contracts
are
generally
construed
and
of
understood
when
there
coverage,
in
its
are
the
most
doubts
language
inclusive
about
of
the
sense.
the
existence
policy
is
(internal
to
or
be
quotation
marks omitted)).
Accordingly,
and hold that the district court did not err in discounting Dr.
Suttons ill-informed belief about the potential outcome of a
lawyers request for medical records for the treatment of one of
her patients.
The only remaining question is whether Dr. Sutton supplied
all
reasonably
potential claim.
obtainable
information
when
reporting
the
The
extent
of
the
patients
injuries;
and
the
names
and
none
of
which
Dr.
Sutton
21
relayed
to
the
MedPro
the contents of the letter, she did not identify Amy Moore as
her former patient or report any details about her labor and
delivery of Nathan.
to MedPro, she did not review Amy Moores records because she
had left the practice at which Amy Moore was her patient, and
did
not
records.
contact
St.
Francis
Hospital
to
review
any
medical
It further stated:
undoubtedly
done
had
information
concerning
Dr.
Sutton's report to the call center been conveyed to
Mr. Costy. Thus, the Court finds that Dr. Sutton
complied with the notice requirements . . . .
J.A. 725-26.
We
accept
testified
the
credibly
district
that
courts
she
finding
made
the
that
call
Dr.
Sutton
shortly
after
was
not
reasonably
obtainable.
Thus,
the
further
there
processed,
was
Costy
testimony
would
have
had
followed
the
call
up
with
been
Dr.
properly
Sutton
to
to
investigate
the
claim,
and
that
the
term
reasonably
that
Dr.
Sutton
provided
all
reasonably
obtainable
It
therefore did not err in its legal conclusion that Dr. Sutton
23
testimony
that
she
called
MedPro
in
2008
and
Bank
v.
(D.S.C.
1981),
Lumbermens
in
which
the
Mut.
Cas.
Co.,
district
court
526
held
F.Supp.
that
94
the
notice
of
cancellation
of
the
policy
was
mailed
to
record
or
any
notation
in
its
file
to
show
that
Id. at 95 .
It
in
fact
received
does
not
arise
based
solely
upon
is
mailing.
in
the
Cf.
best
id.
at
position
1195
with
(noting
the
clock
that
the
running
to
mailing,
whether
testimony, or otherwise).
by
receipt,
corroborating
Thus,
the
district
courts
reliance
on
Dr.
Suttons
2012
WL
proposition
testimony
evidence.
3619078
that
from
corroborating
Board
Education,
(W.D.N.C.
[c]ourts
a
at
*5
and
.
Aug.
should
plaintiff
evidence
Id.
of
where
21,
put
it
undermined
But
No.
here,
3:11cv34RJC
2012),
aside
for
self-serving
is
unsupported
by
other
although
the
by
credible
there
is
no
and
calling
correspondence.
MedPro
J.A. 719.
to
report
the
receipt
of
this
that
evidence
of
number
of
different
persons
phones
being
answered
by
trainees
showed
that
MedPros
that MedPro received no call from Dr. Sutton in 2008 did not
undermine
her
otherwise
credible
testimony.
In
this
light,
is
uncorroborated,
there
is
evidence
in
the
record
to
explain why MedPro might not have had any record of such a call
that is consistent with Dr. Sutton having called and reported
the
contents
observe
that
of
the
letter.
litigants
It
is
credible
surely
unremarkable
testimony
alone
may
to
be
States v. Jones, 977 F.2d 105, 111 (4th Cir. 1992) (There may
be
circumstances
testimony,
under
uncorroborated
which
by
other
defendants
testimonial
self-serving
or
documentary
26
Considering
that
MedPros
cited
cases
in
favor
of
its
of
making
the
call
to
MedPro,
and
that
there
was
of
the
medical
request
letter.
As
we
have
said
A finding is
If the district
quotation
cases
which
in
assessments
of
omitted).
district
witness
Indeed,
courts
as
we
factual
credibility
or
have
said:
findings
the
turn
weighing
In
on
of
894 (4th Cir. 2014); see also Benner v. Nationwide Mut. Ins.
Co., 93 F.3d 1228, 1234 (4th Cir. 1996) (On review, we may
neither
weigh
the
evidence
nor
judge
the
credibility
of
essentially
asks
this
Court
to
review
the
district
courts
See Benner, 93
F.3d at 1234.
MedPros second argument about the district courts finding
on the reliability of MedPros procedures is reviewable.
It
The district
because
of
turnover;
MedPro
sought
to
rebut
that
of
in
concluding
that
the
call
center
was
center
trainees.
duties
and
that
phones
were
being
answered
by
29
after
credible,
finding
and
both
reviewing
Dr.
Sutton
records
and
about
Costys
trainees
The district
position
than
we
are
to
evaluate
the
credibility
of
particularly
robust,
we
cannot
say
it
reaches
the
outer
The district
contents
of
the
St.
Francis
letter;
the
district
court,
MedPros
last
assignment
of
error
is
that
the
district
Sutton.
Although
courts
do
not
generally
address
the
Sutton
revealed
predetermination
that
Dr.
Sutton
had
There
were
only
three
periods
during
Costys
It is
clear
these
that
the
district
courts
purpose
in
asking
MedPro
to
Specifically,
the
document
district
incoming
court
calls
from
questioned
Costy
insureds.
as
to
the
J.A.
What MedPro
from
the
testimony
testified
credibly,
reporting
procedures
and
its
based
of
Dr.
Sutton,
resulting
on
that
that
inquiry
reasoned
Dr.
into
Sutton
MedPros
opinion.
But
33
In
sum,
indications
MedPro
that
any
has
one
failed
of
its
to
point
bases
for
to
persuasive
reversal
We therefore
of
the
affirm the
against
the
Moore
Lawsuit
and
pay
damages
as
may
be
parties,
we
next
address
Dr.
Suttons
protective
cross-
found
report
of
inception
that
a
of
Dr.
Suttons
call
medical
incident
to
the
FirstPro
to
an
policy,
MedPro
insurer
which
The district
constituted
prior
triggered
to
the
Exclusion
legal
call
issue
to
presented
MedPro
to
here
convey
is
narrow:
the
contents
whether
Dr.
of
St.
the
claim
reported
FirstPro
policy.
does
medical
not
automatically
incident
That
is
under
because
34
mean
that
exclusion
the
terms
Dr.
11(b)
Sutton
of
the
notice
and
(S.C. 2005).
Exclusion 11(b) of FirstPros policy reads:
We will not defend or pay under this coverage part for:
* * *
11. Any injury or damages:
b. arising out of a medical incident or committee
incident which prior to the effective date of
this policy was:
I. reported to any insurer; or
II. a pending claim or proceeding; or
III. a paid claim
J.A. 644.
not
contract
to
cover
419
F.
Appx
422,
preexisting
risks
and
liabilities
(4th
Cir.
2011)
(unpublished).
35
incident,
as
Id.
defined
by
the
FirstPro
policy,
J.A. 636.
J.A. 637.
meaning.
According
to
the
commonly
we
Oxford
look
to
English
defined
as
to
its
commonly
Dictionary,
give
an
the
account
verb
of
to
(a
report
fact,
is
event,
to inform.
not
report
to
MedPro
any
details
about
the
acts
she
medical
medical
incident
incident.
as
any
Because
act,
error,
the
policy
or
omission
defines
in
the
We therefore
of
having
seen
patient
can
qualify
as
medical
of
Thus,
Dr.
Suttons
the
St.
Francis
call
to
letter
MedPro
does
to
not
report
the
trigger
the
Although
the
exclusion
in
11(b)
is
not
applicable,
we
resolved)
whether
the
exclusion
in
11(c)
of
the
committee
incident
disclosed
or
which
should
have
been
should
response
to
have
two
disclosed
questions
in
the
Moore
medical
the
application
incident
for
in
insurance.
that
any
of
the
following
circumstances
might
J.A. 597.
reasonable
inferences
or
circumstances
that
there
are
J.A.
597.
Dr.
Sutton
38
responded
no
to
these
questions.
J.A.
597.
We
remand
to
the
district
court
to
arising
from
the
birth
of
Nathan
Moore
was
reasonably
39
I.
This
appeal
turns
on
whether
Dr.
Sutton
reported
J.A. 592.
will
result
(emphasis added).
consistently
claim.
in
claim
for
damages.
J.A.
593
denied
believing
that
she
ever
reported
such
And
record
is
devoid
of
any
evidence
or
factual
findings
in
Dr.
Suttons
request
as
shoes
first
would
step
have
viewed
medical
to
the
medical
records
malpractice
action.
II.
As my friends in the majority correctly recognize, South
Carolina
law
requires
that
we
enforce
insurance
contracts
MedPros
policy
defines
potential
claim
as
an
belief,
J.A. 593.
this
subjective/objective analysis.
language
requires
mixed
answer
question:
to
that
question
is
yes,
we
turn
to
the
If
second
As
such, I would hold that Dr. Sutton failed to comply with the
that
have
interpreted
repeatedly
apply
subjective/objective inquiry.
similar
a
insurance
similar
policy
two-step
Sys. v. Med. Protective Co. of Fort Wayne, Ind., No. CIV. 08417DSDJJK, 2009 WL 2215002, at *5 (D. Minn. July 22, 2009), as
amended (Aug. 10, 2009), affd in part, 639 F.3d 806 (8th Cir.
2011) (holding that a MedPro policy conditioning coverage on
receipt of notice of an incident which the insured reasonably
believes allegations of liability may result requires both an
objective and subjective analysis); Darwin Natl Assurance Co.
v. Matthews & Megna LLC, 36 F. Supp. 3d 636, 653-54 (D.S.C.
2014)
(applying
analyzing
so-called
contracts,
which
hybrid
prior
exclude
subjective/objective
knowledge
coverage
provisions
for
standard
in
in
insurance
unreported
incidents
Cf. Am. Contl Ins. Co. v. Phico Ins. Co., 512 S.E.2d
490, 493 (N.C. Ct. App. 1999) (The policy sets up a subjective
standard . . . under which a claim is deemed filed if the
(Continued)
42
not
subjective,
standard.
Maj.
Op.
at
15.
But that
shoes
believes
reasonably believes.
for
the
phrase
what
the
Insured
Sur. Co., 216 S.E.2d 547, 550 (S.C. 1975) ([P]arties have a
right to make their own contract and it is not the function of
this Court to rewrite it or torture the meaning of a policy to
extend coverage never intended by the parties.).
The majority only musters two cases purportedly supporting
its conclusion that the phrase reasonably believes means an
objective analysis applies: In re Anonymous Member of the South
Carolina Bar, 432 S.E.2d 467 (S.C. 1993), and Hook v. Rothstein,
addressed
Rule
Professional Conduct.
1.7
of
the
South
Carolina
Rules
of
the
representation
will
not
adversely
affect
the
The
But
the court did not do so, as the majority implies, because the
phrase
reasonably
analysis.
believes
per
se
requires
an
objective
See id.
In
that
of
contrast,
potential
nothing
claim
in
should
the
be
MedPro
measured
policy
under
states
the
view
v.
Rothstein
is
similarly
inapposite.
That
case
evaluated
under
the
same
objective
standard
applicable
to
Standards for
on
the
meaning
of
potential
claim
as
expressly
to
interpret
Contrary
to
the
South
majoritys
Carolina
assertion,
courts
however,
have
do
yet
not
believe
they
as
the
majority
concludes,
insurance
contracts
the
belief
of
reasonable
according
to
their
plain
terms,
In fact, it applied an
in
its
policy
precluded
coverage.
J.A.
116.
That
exclusion states that FirstPro will not defend or pay for any
injury
or
effective
damages
date
if
arising
Dr.
out
Sutton
of
knew
claims
or
could
made
have
before
the
reasonably
this
language
objective element.
Yet
the
subjective
language
in
believe[d]
was
MedPros
that
contains
both
subjective
and
J.A. 116.
district
belief
J.A. 647.
an
court
concluded
entirely
policy,
incident
irrelevant
that
Dr.
under
i.e.
whether
would
result
the
she
in
Suttons
similar
reasonably
a
claim
for
damages:
Well, she might not have a reasonable belief of a
lawsuit, I understand your argument there, but the
purpose of the notice provision is to protect, to
bring it to your attention so you can do the
investigation during the policy period.
And now you
want to turn it into some, Oh, no, if there is not a
subjective belief by the insured that shes going to
get sued, then we dont have to do it. Im sorry.
J.A. 108.
write
contracts
of
insurance,
Bell,
757
S.E.2d
at
406
III.
Even assuming an objective standard applies as the majority
contends,
here.
nothing
suggests
that
this
standard
was
satisfied
46
objective
standard.
Rather,
it
concluded
that
the
notice
Co., 743 S.E.2d 827, 829 (S.C. 2013) (stating that courts can
interpret, but not rewrite, provisions in insurance policies).
The district court relied on Owatonna Clinic-Mayo Health
Sys. v. Medical Protective Co., 639 F.3d 806 (8th Cir. 2011) for
this point.
Owatonna,
similar
analysis.
the
district
notice
court
language
that
required
MedPro
policy
In
with
subjective-objective
47
ruling on the objective component, but did not appeal the jurys
findings as to the subjective component. 4
The Eighth Circuit rejected MedPros assertions, concluding
that the insureds belief that it would be sued was objectively
reasonable.
establishes
the
district
should
have
As such,
not
to
support
address
the
the
does
declined
an
subjective
Owatonna
only
applied
district
courts
decision
to
district
courts
findings
in
the
related
In fact,
context
of
for summary judgment, the district court found that the record
evidence suggests that a reasonable physician would not view a
request for records by an attorney as a definite sign of an
impending claim.
J.A. 139.
belief
was
objectively
reasonable.
J.A.
260-62.
to
FirstPro,
and
thus
never
decided
whether
Dr.
Suttons
The
than
the
majority
suggests.
See,
e.g.,
J.A.
363
medical
unrebutted
records
testimony
typically
do
established
not
give
that
rise
requests
to
medical
208-09.
Thus,
as
read
49
the
record,
equally
J.A.
strong
evidence
exists
that
reasonable
physician
would
not
have
action.
In
any
event,
the
district
court
never
Accordingly, assuming an
to
the
district
court
to
decide
whether
Dr.
Suttons
IV.
For the above reasons, I respectfully dissent from Part
II(a) of the majority opinion.
50