Interstate Fire and Casualty Company v. Washington Hospital Center Corporation
853 F. Supp. 2d 49
D.D.C.2012Background
- Interstate seeks reallocation of a $3,055,000 settlement paid on Nurse Hand’s behalf in Banks v. WHC; Hospital Center contracted with Progressive to supply temporary nurses, including Hand.
- Hand was a Progressive employee working at WHC per diem; WHC retained day-to-day control over nursing tasks.
- Progressive indemnified WHC for negligence of its nurses under the Temporary Staffing Agreement, which WHC later released in the Banks settlement.
- GFIL issued a policy covering WHC employees, with an explicit “other insurance” provision designating GFIL as primary for employees.
- Interstate’s policy provides excess coverage over other applicable insurance; GFIL’s provision remains primary for employees unless excess by other insurance applies.
- The settlement explicitly reserved Interstate’s right to seek reallocation under its own and GFIL’s “other insurance” provisions, enabling reallocation if applicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Hand an employee of WHC for GFIL policy | Interstate; Hand is WHC employee under control/prior cases | GFIL; Hand not WHC employee | Yes; Hand deemed WHC employee under policy terms |
| Are the GFIL and Interstate ‘other insurance’ provisions reconcilable and controlling | Interstate; GFIL excess provisions also apply | GFIL; GFIL primary for employees; provisions conflict | Yes; other insurance provisions control allocation |
| Does the indemnification clause preclude GFIL liability | Indemnification would not shield GFIL | Indemnification could preclude recovery | No; waiver in settlement allows GFIL liability allocation |
| Are WHC and MedStar liable to Interstate | Subrogation/contribution possible | WHC/MedStar released by settlement; no liability | Not liable under subrogation, contract, or contribution |
| What is the net allocation of liability | GFIL bears primary/kicker for Hand | No liability for GFIL if Hand not WHC employee | GFIL liable for Hand’s expenses; WHC/MedStar not liable |
Key Cases Cited
- Jones v. Medox, Inc., 430 A.2d 488 (D.C. 1981) (use of other-insurance provisions to allocate costs)
- Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 1034 (D.C. Cir. 1981) (insurers may share defense costs per other-insurance provisions)
- Seattle Opera v. NLRB, 292 F.3d 757 (D.C. Cir. 2002) (definition of employee includes control and economic relationship; context matters)
- Schecter v. Merchs. Home Delivery, Inc., 892 A.2d 415 (D.C. 2006) (factors to determine employee relationship; control is key)
- Beegle v. Rest. Mgmt. Inc., 679 A.2d 480 (D.C. 1996) (control and direction as decisive factors)
- Safeway Stores, Inc. v. Kelly, 448 A.2d 856 (D.C. 1982) (vicarious liability factors for employee status)