Lind-Hernández v. Hosp. Episcopal San Lucas Guayama, 898 F.3d 99

Background

In March 2011 the Hernándezes sued Hospital Episcopal San Lucas Guayama (the Hospital); their first amended complaint (served June 24, 2011) did not name any directors/officers and made no allegations against Jiménez, the Hospital's medical director.
Liberty Mutual issued a Directors & Officers (D&O) "claims-made" policy to the Hospital effective Nov. 30, 2011–Nov. 30, 2012; the policy covers Loss from Claims first made during the policy period against Insured Persons (Insuring Agreement 1.1) and Insured Organizations (Insuring Agreement 1.3).
On Feb. 28, 2012 Jiménez was deposed; the Hospital's counsel forwarded the Hernándezes’ first amended complaint to Liberty that day and requested coverage; Liberty denied coverage on March 26, 2012, citing late notice and exclusions.
The Hernándezes filed a second amended complaint on April 23, 2012 that, for the first time, named Jiménez; he was served on May 3, 2012 (within the policy period). The broker requested coverage for that pleading on June 19, 2012; Liberty again denied coverage.
Jiménez sued Liberty (breach of contract / declaratory relief). The District Court granted summary judgment for Liberty, concluding the relevant Claim was "first made" before the policy period. The First Circuit vacated and remanded.

Issues

Issue	Plaintiff's Argument (Jiménez)	Defendant's Argument (Liberty)	Held
When was the relevant "Claim" "first made" for coverage under Insuring Agreement 1.1?	The Claim against Jiménez is the second amended complaint served on him May 3, 2012 (within the policy period), so coverage triggers.	The Hospital received a related first amended complaint June 24, 2011; under aggregation language section 9.2 interrelated Claims merge and are deemed first made on the earliest date (pre-policy), so no coverage.	Court held the Claim against an Insured Person under Insuring Agreement 1.1 is the Claim that names that Insured Person; the second amended complaint was the relevant Claim and was first made during the policy period.
Does the section 9.2 aggregation rule (interrelated Wrongful Acts -> one Claim) control the determination of when a Claim was first made for purposes of Insuring Agreement 1.1?	N/A (argues textual meaning of Insuring Agreement controls).	Section 9.2 requires treating interrelated Claims as one and dating the aggregated Claim to the earliest first-made date.	Court held section 9.2 governs limits of liability aggregation only; it does not alter the distinct meaning of "Claim" in Insuring Agreement 1.1. Aggregation cannot convert a Claim against the Organization (pre-policy) into a Claim against an Insured Person for the first-made inquiry.
Do policy exclusions (bodily-injury exclusion; absolute medical malpractice exclusion) independently preclude coverage for the second amended complaint?	Contends allegations target administrative/supervisory duties, not direct medical treatment, so exclusions may not apply to all claimed Loss.	Argues bodily-injury and absolute medical-malpractice exclusions bar coverage.	Court declined to decide these exclusionary arguments in the first instance and remanded for the district court to address them on the record.

Key Cases Cited

DiLuglio v. New Eng. Ins. Co., 959 F.2d 355 (1st Cir.) (describing operation of claims-made policies)
Nieves v. Intercontinental Life Ins. Co. of P.R., 964 F.2d 60 (1st Cir.) (appellate courts may independently construe insurance policies)
López & Medina Corp. v. Marsh USA, Inc., 667 F.3d 58 (1st Cir.) (Puerto Rico law governs interpretation in diversity and supplies interpretive rules)
AJC Int'l, Inc. v. Triple-S Propiedad, 790 F.3d 1 (1st Cir.) (ambiguities in insurance contracts construed for the insured; exclusions construed narrowly)
Med. Mut. Ins. Co. of Me. v. Indian Harbor Ins. Co., 583 F.3d 57 (1st Cir.) (purpose of D&O policies to indemnify directors/officers)