Patricia BALL, Plaintiff—Appellant, v. NCRIC, INCORPORATED, a/k/a National Capital Reciprocal Insurance Company, Defendant—Appellee.
No. 03-2100.
United States Court of Appeals, Fourth Circuit.
Argued: Oct. 29, 2004. Decided: Jan. 27, 2005.
120 Fed. Appx. 965
Lee Thomas Ellis, Jr., Baker & Hostetler, L.L.P., Washington, D.C., for Appellee.
Stephen C. Leckar, Butera & Andrews, Washington, D.C., for Appellant.
Amy M. Henson, Baker & Hostetler, L.L.P., Washington, D.C., for Appellee.
Before WILKINS, Chief Judge, and TRAXLER and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c).
Patricia Ball brought this action against NCRIC, Incorporated, seeking satisfaction of a judgment she obtained against a doctor insured by NCRIC. The district court granted summary judgment in favor of NCRIC, and Ball appeals. We affirm.
I.
From April to November 1987, Dr. George Daniel provided in-home treatment to Ball for migraine headaches and depression. During these visits, Daniel injected Ball with various drugs to which Ball became addicted. The drugs put Ball into a state of stupor, during which time Daniel sexually assaulted her. Daniel was arrested in November 1987 on unrelated federal charges of selling prescriptions to undercover agents. Daniel agreed to plead guilty to the charges in February 1988. Daniel, however, did not appear for the plea proceeding, and he remained a fugitive until 1991.
Daniel was insured under a “claims made” medical malpractice insurance policy issued by NCRIC that was in effect from March 19, 1987, until January 1, 1988. Ball brought a malpractice action against Daniel, notifying NCRIC of her claim against Daniel in December 1987. Her action was largely stalled during the time that Daniel remained a fugitive.
In April 1992, Ball filed a notice of claim against Daniel with the Maryland Health Claims Arbitration Office, in accordance with Maryland law governing medical malpractice claims. Ball served Daniel (then in federal prison) with notice of her claim and also provided NCRIC with a copy of the arbitration claim. NCRIC took the position that Ball‘s claims against Daniel did not fall within the scope of the policy issued by NCRIC. In February 1996, the Health Claims Arbitration panel rendered a decision in favor of Ball on her claims against Daniel and awarded $310,000 in damages. Final judgment in that amount was entered in Maryland state court on September 1996.
In February 2000, Ball filed an action in Maryland state court seeking to recover the amount of the judgment through the insurance policy issued by NCRIC. See Washington Metro. Area Transit Auth. v. Queen, 324 Md. 326, 597 A.2d 423, 425-26 (1991) (“[A] tort claimant may not maintain a direct action against the defendant tortfeasor‘s liability insurer until there has been a determination of the insured‘s liability in the tort action. Once there is a verdict or judgment in the tort action, a direct action may be maintained against the liability insurer.“). NCRIC removed the case to federal court on the basis of diversity of citizenship.
After cross-motions for summary judgment, the district court ruled in favor of
After the case was remanded to the district court, the parties again filed cross-motions for summary judgment. The district court granted summary judgment in favor of NCRIC on several alternate grounds. The district court concluded that the notice of the claim provided by Ball‘s attorney to NCRIC did not comply with the requirements of the policy and was therefore insufficient. The district court also concluded that Daniel‘s actions did not involve the provision of “professional medical services” as covered by the policy. Finally, the district court concluded that Daniel knew or should have known about Ball‘s potential claim against him when the policy was issued, and that Ball‘s claim therefore fell within a policy exclusion.
II.
A.
NCRIC‘s policy requires that the insurer be given written notice of any claims made against the insured, and the policy specifies that the notice contain “particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses.” Ball‘s attorney notified NCRIC of her claim against Daniel by letter dated December 15, 1987. Because the letter did not satisfy all of the policy requirements, the district court concluded that NCRIC could deny coverage on that basis.
On appeal, NCRIC recognizes that our decision in the prior appeal precludes any argument that the insufficient notice caused it to suffer “actual prejudice” within the meaning of
An insurer may disclaim coverage on a liability insurance policy on the ground that the insured or a person claiming the benefits of the policy through the insured has breached the policy by failing to cooperate with the insurer or by not giving the insurer required notice only if the insurer establishes by a preponderance of the evidence that the lack of cooperation or notice has resulted in actual prejudice to the insurer.
NCRIC‘s claim regarding the sufficiency of the notice thus falls within the scope of
B.
The policy at issue insured Daniel against claims “caused by a medical incident which occurs ... in the practice of the insured‘s profession as a physician or surgeon.” J.A. 71. The policy defines “medical incident” as “any act or omission in the furnishing of professional medical services to any person.” J.A. 75. “Professional medical services” is not defined by the policy.
The district court noted that “the scope of professional services does not include all forms of Dr. Daniel‘s conduct simply because he is a doctor.” J.A. 660 (emphasis omitted). The court concluded that Daniel‘s actions with regard to Ball “were solely for the satisfaction of his own prurient interests,” and that his actions “in no way involved the application of any specialized learning or skills.” J.A. 660 (internal quotation marks and alteration omitted). The court concluded that Ball‘s claims against Daniel did not spring from Daniel‘s furnishing of medical services to Ball and that NCRIC therefore had no duty to cover the judgment entered against Daniel.
There are no Maryland cases interpreting the precise language used in NCRIC‘s policy. When making their arguments, however, the parties rely on cases involving Maryland‘s
The Act defines “medical injury” as “injury arising or resulting from the rendering or failure to render health care.”
[T]he Act covers only those claims for damages arising from the rendering or failure to render health care where there has been a breach by the defendant, in his professional capacity, of his duty to exercise his professional expertise or skill. Those claims for damages arising from a professional‘s failure to exercise due care in non-professional situations such as premises liability, slander, assault, etc., were not intended to be covered under the Act and should proceed in the usual tort claim manner.
Cannon v. McKen, 296 Md. 27, 459 A.2d 196, 201 (1983) (emphasis added).
Where a plaintiff alleges that he or she was injured by a health care provider during the rendering of medical treatment or services, the Act is implicated,
The language in NCRIC‘s policy obviously is not identical to the language of the Maryland statute or the standard used by Maryland courts to apply that statutory language. Nonetheless, we agree with the parties that there is sufficient similarity such that the cases discussing the scope of the Act provide guidance on the issue before us. The question, then, is whether Daniel‘s conduct was so completely lacking in medical validity that it cannot be considered the “furnishing of professional medical services” as covered by the policy.
If the only conduct at issue in this case were Daniel‘s sexual assaults, then we might agree with NCRIC and the district court that Daniel‘s actions did not arise from the furnishing of medical services. Professional malpractice insurance does not protect against all negligence of a person who happens to be a professional; it is intended to protect against negligence that occurs during the course of the professional‘s exercise of his special skills and training. Although Maryland does not appear to have directly addressed this question, many courts have concluded that, except in cases involving psychiatrists or other therapists, sexual misconduct by a doctor is not covered by a professional malpractice insurance policy. See, e.g., Niedzielski v. St. Paul Fire & Marine Ins. Co., 134 N.H. 141, 589 A.2d 130 (1991); St. Paul Fire & Marine Ins. Co. v. Mori, 486 N.W.2d 803 (Minn. Ct. App. 1992). Sexual assault is typically viewed as being so far beyond the bounds of professional medical treatment and so disconnected from an exercise of the doctor‘s professional skills and training that courts have concluded a sexual assault by a doctor does not amount to medical malpractice.
In this case, however, Ball‘s complaint is not based only on Daniel‘s sexual misconduct. Daniel advertised himself as providing in-house medical treatment, and Ball sought him out for treatment of migraines and depression. Daniel came to her house and purported to treat those problems by injecting Ball with various drugs, including Demerol, Vistaril, Valium, and Fiorinal. Ball‘s claim against Daniel is based, in large part, on her contention that Daniel failed to properly administer these drugs by giving them to her in amounts that caused her to become addicted. At least some of the drugs given to Ball by Daniel are commonly used to treat the problems from which Ball suffered. See, e.g., Baker v. Apfel, 159 F.3d 1140, 1143 (8th Cir. 1998) (noting that “[t]he only effective pain medication for the migraines is an injection of Demerol“); Beckley v. Apfel, 152 F.3d 1056, 1058 (8th Cir. 1998) (noting that claimant took Fiorinal to treat migraine headaches). Under these circumstances, we cannot say that Daniel‘s actions in administering the drugs were completely lacking in medical validity. Ball‘s claim with regard to Daniel‘s misuse of the drugs therefore falls within the scope of the risk covered by NCRIC‘s policy.
NCRIC, however, contends that Daniel did not give Ball these drugs for the purpose of treating her migraines and depression, but instead gave her the drugs to carry out his scheme to addict her and
Ball‘s subjective beliefs about what Daniel‘s intentions may have been simply are not determinative of the coverage question. What matters is the actual nature of the claim, not the label that the plaintiff attaches to the claim. See Jewell v. Malamet, 322 Md. 262, 587 A.2d 474, 479 (1991) (“[T]he determination of jurisdiction in cases involving an intentional tort of a professional nature lies not in the label given to the tort, but on the factual context in which the tort was allegedly committed.” (internal quotation marks and alterations omitted)); see also Goicochea, 694 A.2d at 479 (rejecting plaintiff‘s attempt to turn medical malpractice case into an intentional tort case by alleging that the doctor acted maliciously).
As previously discussed, Ball‘s claim falls within the scope of the policy because it springs from Daniel‘s furnishing of professional medical services, services that were not completely lacking in medical validity. Ball‘s personal beliefs about why Daniel acted as he did does not change this conclusion.
C.
Finally, we turn to the district court‘s conclusion that NCRIC was not obligated to provide coverage for Ball‘s claim because Daniel knew or should have known about her claim when the policy was issued.
The policy issued by NCRIC states that coverage “is limited to liability for only those claims which arise from incidents occurring subsequent to the retroactive date stated in the declarations and schedule page and which are first made against the insured while the policy is in force.” J.A. 69. The retroactive date of the NCRIC policy was March 19, 1987. Daniel began treating Ball in April 1987, and we decided in the previous appeal that Ball provided timely notice to NCRIC of her claim. Thus, Ball‘s claim seems to fall within the coverage period of the policy.
The policy, however, also contains an exclusion (“Exclusion (f)“), which excludes coverage for liability “for any potential claim against the insured of which the insured is aware, or reasonably should have been aware, as of the date this policy is issued, regardless of whether or not such claim has yet been made or reported to any insurer.” J.A. 72 (emphasis added). Although the policy‘s retroactive date is March 19, 1987, the policy was formally issued on May 21, 1987. The district court
On appeal, Ball contends that the policy is ambiguous because it states that it covers claims arising after the retroactive date, but then excludes claims about which Daniel should have been aware on the issuance date, without defining issuance date. And because the policy is ambiguous, Ball argues, we should construe it in her favor. See, e.g., Mamsi Life & Health Ins. Co. v. Callaway, 375 Md. 261, 825 A.2d 995, 1005-06 (2003) (“Although Maryland law does not construe insurance policies as a matter of course against the insurer, when a term in an insurance policy is found to be ambiguous, the court will construe that term against the drafter of the contract which is usually the insurer.” (citation omitted)). We disagree with Ball‘s argument.
Although the policy states that it covers claims for incidents occurring after the retroactive date, the policy also makes clear that the grant of coverage is subject to the other terms of the policy, which of course includes the policy exclusions. And contrary to Ball‘s suggestion, the policy cannot be considered ambiguous simply because it includes provisions that operate to preclude coverage that would otherwise be granted. That is exactly what exclusions are intended to do.
Nor can we conclude that Exclusion (f) is ambiguous because the policy does not define date of issuance. The declarations page of the policy expressly identifies May 21, 1987 as the policy‘s issue date. See J.A. 642. While no provision in the policy explains the time frame under which the policy would be issued, that omission does not make the exclusion ambiguous.
A contract term is determined to be ambiguous if a reasonably prudent person would understand the term as susceptible to more than one possible meaning. The determination of whether language is susceptible to more than one meaning includes consideration of the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution. Id. at 1005 (citation and internal quotation marks omitted). “Unless there is an indication that the parties intended to use words in the policy in a technical sense, the terms of the contract are accorded their customary, ordinary, and accepted meanings.” Walk v. Hartford Cas. Ins. Co., 382 Md. 1, 852 A.2d 98, 106 (2004). When the policy is read as a whole, it is clear that the policy was issued for purposes of Exclusion (f) when it was compiled and delivered to Daniel, a date identified in the policy as May 21, 1987. That the date of issuance is different from the retroactive date simply does not make the exclusion ambiguous.
The question, then, is whether Exclusion (f) operates to remove Ball‘s claim from the coverage provided by NCRIC‘s policy. We are constrained to answer that question in the affirmative.
The record establishes that by the time the policy was issued on May 21, 1987, Daniel had visited Ball multiple times, administering drugs each time, and had sexually assaulted her at least once. Daniel had by that time told Ball that she was addicted to the narcotics he had been giving her, and (again, before the date of the policy issuance), Ball had checked herself into a hospital seeking treatment for the addiction. Given these facts, a reasonable person would have known before the policy was issued that Ball had a claim against
Ball, however, contends that because Daniel continued to treat her after the policy was issued, Exclusion (f) does not preclude coverage for her claim. In support of this argument, Ball relies on Mutual Fire, Marine & Inland Insurance Co. v. Vollmer, 306 Md. 243, 508 A.2d 130 (1986).
In Vollmer, a malpractice insurance policy issued to a doctor provided coverage for malpractice committed after the policy‘s retroactive date and excluded coverage for malpractice occurring before the retroactive date. The plaintiff‘s complaint alleged a related series of acts of malpractice, some of which occurred before the retroactive date and some of which occurred after the retroactive date. The Vollmer court concluded that the policy was ambiguous because “[t]he policy is silent on its application where malpractice is alleged to have been committed both before and after the retroactive date.” Id. at 134. The court therefore “resolve[d] the ambiguity against the drafter of the policy and in favor of coverage.” Id.
The specific language of NCRIC‘s policy, however, makes Ball‘s “continuing treatment” analysis inapplicable and her reliance on Vollmer unavailing. The policy provides coverage for claims “caused by a medical incident.” J.A. 71. As to “medical incident,” the policy states that “[a]ny such act or omission together with all related acts or omissions in the furnishing of such services to any one person shall be considered one medical incident.” J.A. 75. Under this provision, Daniel‘s actions that occurred before the policy issuance date were clearly related to the actions that occurred after the issuance date. Thus, there was only one medical incident, one that Daniel reasonably should have known about before the policy issued. Unlike the policy at issue in Vollmer, the NCRIC policy is not ambiguous. By treating related actions as a single medical incident and excluding coverage for medical incidents about which Daniel should have known by the issuance date, the policy simply forecloses Ball‘s continuing-treatment argument.
We therefore agree with the district court that Exclusion (f) applies so as to take outside the scope of the policy‘s coverage the claims asserted against Daniel by Ball. Although we have concluded that the district court erred in its analysis of the other issues in this case, our conclusion with regard to Exclusion (f), standing alone, is sufficient to support the district court‘s judgment.2 Accordingly, for the
AFFIRMED