524 F. App'x 241
6th Cir.2013Background
- ProMedica was insured under two consecutive Ohio policies (2009 and 2010) providing up to $15 million for D&O liability in a claims-made form.
- A “claim” requires a written demand or a proceeding commenced by a complaint or similar pleading, or a formal investigative order, for a Wrongful Act.
- FTC initiated a non-public investigation in July 2010 into ProMedica’s planned acquisition of St. Luke’s Hospital, later transitioning to a full-phase investigation in August 2010 with Hold Separate Agreement.
- In August 2010 the FTC issued notices (letters, a resolution, subpoenas, CIDs) and proposed Hold Separate Agreement but did not allege an antitrust violation at that time.
- The FTC filed administrative and district-court complaints in January 2011, asserting violations of antitrust law; ProMedica notified OneBeacon on January 13, 2011.
- The district court granted summary judgment to OneBeacon, holding the claim arose in August 2010; the court’s ruling was vacated and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did a claim first arise under the policies? | ProMedica argues no claim arose until January 2011. | OneBeacon contends August 2010 actions already constituted a claim. | Claim did not arise in August 2010; first arose January 2011. |
| Did August 2010 FTC actions constitute a 'Wrongful Act' under the policy? | Undefined term, but August actions did not allege wrongdoing. | August actions alleged an antitrust violation by implication. | No Wrongful Act was alleged in August 2010; actions did not satisfy element four. |
| Do known loss or equitable estoppel defenses apply to bar coverage for 2010 policy? | Not applicable if timely notice is shown. | Known loss and equitable estoppel defeat coverage. | defenses to be resolved on remand; district court to consider them. |
Key Cases Cited
- Andersen v. Highland House Co., 757 N.E.2d 329 (Ohio 2001) (contract interpretation based on ordinary meaning)
- Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003) (clear contract language governs; look to writing)
- Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146 (Ohio 1978) (unambiguous contract language dictates intent)
- Shear v. W. Am. Ins. Co., 464 N.E.2d 545 (Ohio 1984) (undefined terms interpreted by ordinary meaning)
- Morton Salt Co., 338 U.S. 632 (1950) (FTC investigative power akin to grand jury; investigations may precede allegations)
- F.T.C. v. Texaco, Inc., 555 F.2d 862 (D.C. Cir. 1977) (FTC investigations may not always lead to litigation;)
- Polychron v. Crum & Forster Ins. Cos., 916 F.2d 461 (8th Cir. 1990) (policies defining 'claim' and 'relief' can treat subpoenas as claims)