Interstate Fire & Casualty Co. v. Washington Hospital Center Corp.
411 U.S. App. D.C. 187
D.C. Cir.2014Background
- Greenspring issued a MedStar group general liability policy covering MedStar employees, including Washington Hospital employees.
- Washington Hospital hired Progressive Nursing Staffers to supply registered nurses, with hospital control over assignments and joint indemnity for negligent acts.
- Nurse Hand, employed by Progressive, worked at Washington Hospital and was involved in Banks litigation arising from alleged hospital negligence.
- Banks settlement released Washington Hospital, Nurse Hand, Progressive, and Interstate Fire from claims, but Interstate Fire reserved rights to reallocate settlement under policy terms.
- Interstate Fire sued Washington Hospital, MedStar, and Greenspring seeking primary coverage; district court held Nurse Hand was an employee of Washington Hospital under Greenspring and Greenspring’s policy was primary; Greenspring appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nurse Hand is an employee of Washington Hospital under Greenspring policy. | Interstate Fire argues Hand is a Washington Hospital employee under the policy. | Greenspring contends Hand is not an employee of the hospital. | Yes; Hand is an employee (borrowed employee) of Washington Hospital. |
| Whether Washington Hospital waived its indemnification rights in Banks settlement. | Interstate Fire contends Washington Hospital retained indemnity rights; Greenspring argues waiver. | Greenspring asserts no indemnity rights survive release. | Washington Hospital released all contractual indemnification claims, so waiver applies. |
| Whether Greenspring’s coverage is primary despite other insurance. | Interstate Fire argues Greenspring should be primary as per policy terms. | Greenspring argues other insurance should apply as excess/secondary. | Greenspring’s coverage is primary under the policy and other insurance clauses. |
| Whether extrinsic evidence (Smith affidavit) can alter unambiguous policy terms. | Interstate Fire argues Smith affidavit supports Greenspring’s interpretation. | Greenspring argues affidavit reflects intent but cannot override unambiguous terms. | Affidavit does not defeat unambiguous terms; policy remains interpreted by contract law. |
| Whether Wal-Mart-style indemnification principles govern this case. | Interstate Fire urges courts to follow Wal-Mart line on subrogation/indemnity. | Greenspring maintains no circuity of action and indemnity not triggered. | Wal-Mart approach not controlling; no circuity here; district court’s reasoning stands. |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. RLI Insurance Co., 292 F.3d 583 (8th Cir. 2002) (indemnification rights govern subrogation outcomes and avoid wasteful litigation)
- Beegle v. Rest. Mgmt., Inc., 679 A.2d 480 (D.C. 1996) (control factors in employment relationships; salary payment not decisive)
- Travelers Indem. Co. v. U.S. Fed. of...</caseCaption>, 770 A.2d 978 (D.C. 2001) (how to interpret ambiguous contract terms in insurance context)