Medical
Malpractice Insurance Pool Of New York State, Plaintiff,
against
Barbara Gordon, MD, Defendant.
|
154079/2014
For plaintiff:
Soffer & Rech, LLP
48 Wall Street, 28th
Floor
New York, New York 10005
By: Michael A. Borg, Esq.
For defendant:
Scott G. Cerbin, Esq., PLLC
16 Court Street, Suite 2901
Brooklyn, New York 11241
By: Scott G. Cerbin, Esq.
Robert R. Reed, J.
In this action, plaintiff Medical Malpractice Insurance Pool of New York State
(MMIP) moves, pursuant to CPLR 3212, for summary judgment on its claim against
defendant Barbara Gordon, MD (Gordon). Gordon opposes this motion and cross-moves,
pursuant to CPLR 3211 (a) (1), to dismiss this action.
On November 12, 2006, MMIP issued a professional liability insurance
policy, bearing policy No. 2-203809 to Gordon (The Policy). The Policy was in effect for
one year, from November 12, 2006 to November 12, 2007.[FN1]
It was a "claims made" policy, which means that the insured's protection is
limited to those claims made while the policy is in effect. According to MMIP, Gordon
owes to MMIP the expenses it incurred in the defense of Gordon in the [*2]underlying
claim, "Victoria David v Barbara Gordon MD, et al," index No.
24114/2008 (Kings County, New York) (the Underlying Action), in the sum of
$115,556.85.
Subsequent to Gordon's failure to renew The Policy that
expired on November 12, 2007, MMIP sent two letters to Gordon, dated January 11,
2008 and February 12, 2008, offering tail coverage. Relevant language in both letters
reads:
"to be covered for claims not yet made against you, as a result of prior medical
incidents, which would have been covered if your policy had remained in force, you must
purchase an Extended Reporting Period Endorsement from MMIP, or in the alternative,
purchase
'nose coverage' from your subsequent insurer"
(Holke aff, exhibits 2
and 3 at 1).
On both occasions, Gordon refused the offer of tail coverage.
Thus, the relevant language of The Policy provided as follows:
SECTION
IV. LIMITS ON AND EXTENSIONS OF INSURANCE COVERAGE
"G. IF YOU DO NOT PURCHASE OPTIONAL EXTENDED
REPORTING ENDORSEMENT COVERAGE AND YOU ARE NOT
ENTITLED TO AUTOMATIC EXTENDED REPORTING ENDORSEMENT
COVERAGE AND A CLAIM IS MADE AGAINST YOU AND YOUR HOSPITAL
If your coverage under this policy ends, for any reason and you do NOT
purchase the Optional Extended Reporting Endorsement Coverage described in Section
IV.C and you are NOT entitled to the Automatic Extended Reporting Endorsement
Coverage described in Section IV.E, there are two situations where claims made against
you will be handled under this policy as though you had purchased or were entitled to
coverage, even though the Claims were first reported to the Company after the 60th day
following the end of the Policy Period or any Termination of Coverage. IN BOTH
CASES, THE COMPANY WILL INSTITUTE A CLAIM AGAINST YOU
PERSONALLY FOR ANY CLAIMS OR JUDGMENTS THE COMPANY
ACTUALLY PAYS AND FOR ALL DEFENSE COSTS THE COMPANY INCURS
UNDER THIS PROVISION
"A Claim will be handled under the circumstances: (a) if a Hospital at which you
provided Professional Services receives a Suit or Claim after the 60th day
following any Termination of Coverage in which you AND the Hospital or any of
its employees are named as defendants, or if the Hospital or any of its
employees institute a third-party action against you AND (b) the Suit or Claim
arises out of Professional Services which you provided (or should have provided)
on or after the Retroactive Date and before the end of the Policy Period"
(Holke aff, exhibit 1 at 5).
The underlying claim was made in or about
September 2008, for treatment rendered on October 9, 2007, against, among others,
Gordon and NY Methodist Hospital. Gordon forwarded the claim to MMIP for defense.
Because the claim was made
"after the 60th day following" the termination of The Policy, and named a
hospital at which Gordon provided professional services, MMIP was obliged to
"handle" the claim in the Underlying Action under the terms of section IV.G
of The Policy.
By letter dated October 3, 2008, MMIP acknowledged receipt
of the claim forwarded by Gordon and informed Gordon of her rights and obligations
under The Policy. Because Gordon [*3]did not purchase
applicable tail coverage after the expiration of The Policy, the letter states, in pertinent
part:
"As set forth below MMIP advises and declares that it will provide a defense and
indemnity to you in the above captioned lawsuit pursuant to the terms,
conditions and limitations of your primary policy. Please be further advised
that pursuant to the terms, conditions and limitations of your primary policy,
you must reimburse MMIP for all defense costs and indemnification incurred in
this lawsuit"
(Holke aff, exhibit 5 at 1).
It further states that
because Gordon did not purchase tail coverage, there is no coverage under the excess
policy. The letter states:
"However, in light of the fact that the hospital at which you rendered services is
named as a defendant, and in accordance with Section IV.G, MMIP will defend and
indemnify you subject to all the terms, limit and conditions of the policy as if you had
coverage but will seek to recover from you personally all sums paid on your
behalf"
(id. at 3).
In accordance with the
terms of The Policy, MMIP retained the Law Offices of Charles E. Kutner, LLP to
represent and defend Gordon. The claim was extensively litigated over the course of
nearly four years and, after trial, a unanimous verdict was rendered in favor of
Gordon.
MMIP commenced this action against Gordon in March 2014,
seeking
"pursuant to the terms of [The Policy]," $115,556.85, for defense of the
Underlying Action, which included investigation, medical examination, discovery and
trial, with interest from August 9, 2012. MMIP annexed to its motion papers The Policy,
the letters sent to Gordon informing her of her rights under The Policy, the underlying
complaint, and the litigation invoices, which MMIP paid.
In opposition, and
in her cross motion, Gordon argues that the provision of The Policy relied upon by
MMIP is vague, ambiguous, unconscionable and unenforceable. She seeks a declaratory
judgment that section IV.G is unenforceable as against public policy. In her affidavit,
Gordon argues that it was never her understanding that she would be responsible for
defense costs as a prevailing party. According to Gordon, pursuant to the provisions of
section IV.G, under The Policy, she is
"covered notwithstanding the fact that my employer opted not to purchase 'tail
coverage' if I am sued together with a hospital in which I provided professional
services" (Gordon aff,
¶ 6). Gordon argues that this is precisely what happened here; she was sued together with
Methodist Hospital of New York and others for alleged medical malpractice.She argues
that The Policy language states that even if the policy expires and she fails to extend the
coverage, and even if the claims were reported to MMIP after the 60th day following the
end of The Policy period, the
"claims will be handled as though [Gordon] had purchased or [was] entitled to [tail
coverage]" (Gordon's Memorandum of Law in support of defendant's motion to
dismiss at 3, quoting Holke aff, exhibit 1 at 5).
Gordon argues that this
language contradicts the subsequent language in The Policy that states:
"IN BOTH CASES THE COMPANY WILL INSTITUTE A CLAIM AGAINST
YOU PERSONALLY FOR ANY CLAIMS OR JUDGMENTS THE COMPANY
ACTUALLY PAYS AND FOR ALL DEFENSE COSTS THE COMPANY INCURS
UNDER THIS PROVISION" (id. at 4, quoting Holke aff, exhibit 1 at 5).
Gordon further argues that the language of The Policy is unclear, because a
reasonable inference from the language is that MMIP will institute a claim against
Gordon for fees only in the event that they pay a claim or judgment on her behalf.
Finally, Gordon argues that The Policy is not enforceable as it appears to require Gordon
to agree to participate and cooperate in her defense and settlement of her claims in
exchange for no consideration. This is so, according to Gordon, because The Policy
requires her to cooperate with MMIP in its settlement of the claims against her, that she
may not withhold consent to settlement, but that she must finance the litigation and pay
for any judgment or claims that MMIP pays on her behalf.
In her cross
motion, Gordon seeks, pursuant to CPLR 3001, a declaratory judgment that MMIP is not
entitled to collect on the policy, since section IV.G is unenforceable as against public
policy.
Discussion
Under CPLR 3212 (b), summary
judgment
"shall be granted if, upon all papers and proof submitted, the cause of action or
defense shall be established sufficiently to warrant the court as a matter of law in
directing judgment in favor of any party." To warrant a court's directing judgment
as a matter of law, it must clearly appear that no material issue of fact is presented for
trial (Doize v Holiday Inn
Ronkonkoma, 6 AD3d 573, 574 [2d Dept 2004]). When a party has made a
prima facie showing to entitle it to summary judgment,
"the burden shifts to the opposing party to submit proof in admissible form
sufficient to create a question of fact requiring a trial" (Kershaw v Hospital for Special
Surgery, 114 AD3d 75, 82 [1st Dept 2013]). Additionally,
"in determining a motion for summary judgment, facts alleged by the nonmoving
party and inferences which may be drawn from them must be accepted as true"
(Doze, 6 AD3d at 574). Conclusory allegations or denials are insufficient to
either warrant or defeat summary judgment (McGahee v Kennedy, 48 NY2d 832,
834 [1979]).
Contracts must be interpreted based upon the parties' intentions
arising from the language of the agreement itself (Lopez v Fernandito's Antique,
305 AD2d 218, 219 [1st Dept 2003]).
"[A] contract is to be construed in accordance with the parties' intent, which is
generally discerned from the four corners of the document itself. Consequently,
'a written agreement that is complete, clear and unambiguous on its face must be
enforced according to the plain meaning of its terms'
" (MHR Capital Partners
LP v Presstek, Inc., 12 NY3d 640, 645 [2009], quoting Greenfield v Philles
Records, 98 NY2d 562, 569 [2002]).
Here, the court finds that the
language of The Policy is clear and the parties' intent can be discerned from the four
corners of the document. The court does not accept Gordon's argument that the language
is ambiguous or contradictory. Instead, the court finds that the subject language is clear
and that MMIP's conduct is consistent with that language.
The one-year term of The Policy extended from November 2006 to
November 2007. At the end of that time period, pursuant to the terms of The Policy, the
period for reporting claims was automatically extended for 60 days. After the expiration
of The Policy, and during the 60-day period, MMIP offered Gordon the option of
purchasing tail insurance, which would have extended the coverage even further. This
offer was made in two MMIP letters, sent to Gordon, explaining that her
"medical malpractice insurance policy was cancelled or non-renewed."
Gordon did not purchase the tail coverage. Thus, after the 60-day extension, Gordon was
entitled to the benefits as described in section IV.G. According to the plain language of
this section, the parties agreed that in the event a claim was filed against Gordon and the
hospital [*4]after the term of The Policy, MMIP would
"handle" claims made against Gordon, even if the claim was reported to
MMIP after the 60th day following the expiration of The Policy — but at Gordon's
expense.
A plain reading of the language in Section IV.G does not support
Gordon's position that even though The Policy expired and she did not purchase optional
extended reporting endorsement, or tail coverage, she would nonetheless receive the
benefits of such coverage. There is no support in the language of The Policy for this
position. Instead, The Policy states in several places that once the policy expires, the
insured is not covered for claims, even if based on services provided during the policy
period, unless the insured purchases tail coverage. Further, section IV.G states in capital
letters that MMIP will seek from Gordon any defense costs it incurred. This information
is repeated in the offer for tail insurance set forth in MMIP's letters to Gordon of January
11, 2008 and February 12, 2008. Because the reading of The Policy is unambiguous, the
Court finds there are no questions of fact necessitating a trial. The Court further finds
that the provisions in the policy are not unconscionable.
The Court therefore denies Gordon's cross motion and grants MMIP's
motion for summary judgment on the issue of liability, and the issue of reasonable
attorneys' fees and costs is herein referred for a hearing. In accordance with the
foregoing, it is, therefore,
ORDERED that the issue of reasonable attorneys'
fees and costs is referred to a Special Referee to hear and report with recommendations,
except that, in the event of and upon the filing of a stipulation of the parties, as permitted
by CPLR 4317, the Special Referee, or another person designated by the parties to serve
as referee, shall determine the aforesaid issue; and it is further
ORDERED
that counsel for the party seeking the reference or, absent such party, counsel for the
plaintiff shall, within 30 days from the date of this order, serve a copy of this order with
notice of entry, together with a completed Information Sheet,[FN2]
upon the Special Referee Clerk in the Motion Support Office in Rm. 119 at 60 Centre
Street, who is directed to place this matter on the calendar of the Special Referee's Part
(Part 50 R) for the earliest convenient date.
Dated: August 12, 2015
ENTER:
_________________________
J.S.C.
Footnotes
Footnote 1:The Policy automatically
extended the reporting period for 60 days after the policy expiration date.
Footnote 2:Copies are available in
Rm. 119 at 60 Centre Street, and on the Court's website.