Interstate Fire and Casualty v. Dimensions Assurance Ltd.

Filing

PUBLISHED AUTHORED OPINION filed. Originating case number: 8:13-cv-03908-GJH. [999981199]. [15-1801]

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-1801

INTERSTATE FIRE AND CASUALTY COMPANY,
Plaintiff - Appellant,
v.
DIMENSIONS ASSURANCE LTD.,
Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.
George J. Hazel, District Judge.
(8:13-cv-03908-GJH)

Argued:

September 23, 2016

Decided:

December 6, 2016

Before TRAXLER, SHEDD, and FLOYD, Circuit Judges.

Vacated and remanded by published opinion. Judge Traxler wrote
the opinion, in which Judge Shedd and Judge Floyd joined.

ARGUED: Paulette Steffes Sarp, HINSHAW & CULBERTSON LLP,
Minneapolis,
Minnesota,
for
Appellant.
Robert
Lawrence
Ferguson, Jr., FERGUSON, SCHETELICH & BALLEW, P.A., Baltimore,
Maryland, for Appellee.
ON BRIEF: Suzanne L. Jones, HINSHAW &
CULBERTSON LLP, Minneapolis, Minnesota; Robert C. Morgan,
MORGAN, CARLO, DOWNS & EVERTON, P.A., Hunt Valley, Maryland, for
Appellant.

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TRAXLER, Circuit Judge:
The question in this insurance coverage dispute is whether
a nurse employed by a staffing agency and assigned to work at a
hospital qualifies as an “employee” of the hospital under the
hospital’s insurance policy.

The district court answered that

question in the negative and granted summary judgment to the
hospital’s insurer.

For the reasons set forth below, we vacate

the district court’s order and remand for further proceedings.
I.
A.
Favorite

Healthcare

Staffing

(the

“Agency”)

is

an

employment agency that provides nurses and other health care
professionals to Laurel Regional Hospital (the “Hospital”).
contract

between

Agreement”)

the

states

Agency
that

and

the

the

Hospital

Agency-provided

(the

The

“Staffing

practitioners

assigned to the Hospital are the employees of the Agency, not
the Hospital.
Under the Staffing Agreement, the Hospital is responsible
for

“orient[ing]

description

[Agency

responsibilities

practitioners]
and

all

to

policies

[their]
and

necessary to meet [Hospital] performance standards.”

job

procedures
J.A. 25.

The Hospital has the right under the Agreement to “float” Agency
practitioners

to

areas

assigned

to

immediately

and

to

which

they

terminate
2

were
any

not

originally

practitioner

who

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refuses to float.

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The Agreement also gives the Hospital the

right to “dismiss any Practitioner at any time if [the Hospital]
determines that a Practitioner is unsatisfactory.”
As

established

through

discovery,

no

J.A. 28.
Agency

staff

supervises the practitioners on site at the Hospital or provides
medical-care instructions to the practitioners.

The Hospital

dictates the type of care to be provided to patients by Agency
practitioners;

whether

Agency

practitioners

or

direct-hire

employees are involved, the Hospital expects the same level of
care to be provided to patients.

If an Agency practitioner

refuses to comply with Hospital directions, the Hospital may
immediately terminate the practitioner.
B.
Appellant
professional

Interstate
liability

Fire

and

insurance

Casualty

policy

to

Company
the

issued

Agency

a

that

covered doctors and nurses who were employed by the Agency and
placed

by

the

Agency

to

work

at

various

medical

facilities.

Appellee Dimensions Assurance Ltd., an insurance company wholly
owned by the company that owns the Hospital, issued the Hospital
the liability insurance policy (the “Policy”) at issue in this
case.
The Policy provides coverage to the Hospital and to other
persons
person.”

or

entities

who

meet

its

definitions

of

“protected

The Policy consists of three main parts, one providing
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coverage for “General Liability,” another providing coverage for
“Hospital

Professional

Liability,”

and

another

providing

coverage for “Group Physicians Professional Liability.”

J.A.

105-06.
The professional-liability section of the Policy includes
multiple categories of persons and entities in its definition of
“protected
committee

person,”
and

board

including
members.

certain
In

a

administrators

provision

titled

and

“Worker

Protection,” this section of the Policy provides that
[The
Hospital’s]
present
and
former
employees,
students
and
authorized
volunteer
workers
are
protected persons while working or when they did work
for you within the scope of their duties.
Unless
added
by
amendment
to
this
Agreement,
interns,
externs, residents, or dental, osteopathic or medical
doctors
are
not
named
protected
persons
for
professional injury, even if they are your employees,
students or authorized volunteer workers.
J.A. 134 (emphasis added).
Under

the

general-liability

portion

of

the

Policy,

the

“Worker Protection” clause extends “protected person” status to
certain Hospital workers:
[The
Hospital’s]
present
and
former
employees,
students
and
authorized
volunteer
workers
are
protected persons while working, or when they did work
for you within the scope of their duties.
Persons
working for you on a per diem, agency or contract
basis are not protected persons.

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J.A.

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119

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(emphasis

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added).

The

Policy

does

not

define

“employee,” nor does it incorporate or otherwise refer to the
Staffing Agreement between the Agency and the Hospital.
C.
In 2012, a former patient brought a medical malpractice
action

(the

“Underlying

Action”)

against

several of its doctors and nurses.

the

Hospital

and

One of the defendants was

Nurse Cryer, who had been placed by the Agency at the Hospital.
Claiming

that

Dimensions

she

refused

was
to

not

an

defend

employee

Cryer.

of

the

Interstate

Hospital,
thereafter

undertook to defend Cryer, ultimately settling the case against
her for $2.5 million and incurring nearly $500,000 in defense
costs.
Interstate subsequently filed this equitable contribution
action against Dimensions in federal district court.
alleged

that,

under

the

terms

of

the

Policy,

Interstate
Nurse

Cryer

qualified as an employee of the Hospital and thus a “protected
person”

entitled

to

coverage

under

the

Policy.

Because

the

coverage provided by the Dimensions policy was primary and the
coverage provided by the Interstate policy was “excess” in cases
where

there

was

other

valid

insurance

coverage,

Interstate

alleged that Dimensions was responsible for the entire amount it
paid to defend and settle the claims against Nurse Cryer.

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The district court granted summary judgment in favor of
Dimensions.

Relying

on

the

terms

of

the

Staffing

Agreement

between the Hospital and the Agency, the district court held
that

Agency-provided

workers

meaning of the Policy.

were

not

employees

within

the

Interstate appeals, arguing that Nurse

Cryer qualifies as an employee under the plain terms of the
Policy

and

separate

that

contract

the

district

between

court

different

erred

by

looking

to

parties

to

determine

a

the

meaning of the Policy.
II.
This insurance dispute, which falls within our diversity
jurisdiction,

is

governed

by

the

law

of

Maryland,

action was filed and the insurance policy delivered.
Co.

v.

Stentor

Elec.

Mfg.

Co.,

313

U.S.

487,

where

the

See Klaxon
496

(1941)

(explaining that a federal court sitting in diversity must apply
the

choice

of

law

principles

of

the

forum

state);

Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 738 F.3d 95,
100 (4th Cir. 2013) (“In insurance contract disputes, Maryland
follows the principle of lex loci contractus, which applies the
law of the jurisdiction where the contract was made.
of

law

purposes,

performed

which

Typically,

this

a

contract

makes
is

the

where

is

made

agreement

the

policy

6

where
a
is

the

For choice

last

binding
delivered

act

is

contract.
and

the

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paid.”

(internal

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quotation

marks

and

citation

omitted)).
Maryland courts interpret insurance policies “with the same
principles and rules of construction . . . use[d] to interpret
other contracts.”

Connors v. Gov’t Employees Ins. Co., 113 A.3d

595, 603 (Md. 2015).
parties
sense,

intended
they

to

must

use

be

accepted meaning.”

“Unless there is an indication that the
words

in

accorded

the

their

policy

customary,

in

a

technical

ordinary,

and

Maryland Cas. Co. v. Blackstone Int’l Ltd.,

114 A.3d 676, 681 (Md. 2015) (internal quotation marks omitted).
Accordingly, “the written language embodying the terms of an
agreement will govern the rights and liabilities of the parties,
irrespective

of

the

intent

entered into the contract.”

of

the

parties

at

the

time

they

Long v. State, 807 A.2d 1, 8 (Md.

2002) (internal quotation marks and alteration omitted).
There is no dispute that, if the other requirements of the
Policy are satisfied, the claims asserted against Nurse Cryer in
the Underlying Action fall within the scope of the professionalliability section of the Policy.

The question, then, is whether

Cryer qualifies as a protected person under that section of the
Policy.
A.
Interstate argues on appeal that Nurse Cryer qualifies as a
Hospital employee and therefore a protected person under the
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unambiguous provisions of the professional-liability section of
the

Policy.

excludes

As

Interstate

Agency-provided

points

out,

practitioners

the

from

Policy

its

clearly

definition

of

“employee” in the general-liability portion of the Policy, but
it

does

not

exclude

Agency-provided

practitioners

from

the

definition in the professional-liability section of the Policy,
which is the section applicable to the claims at issue in this
case.

In Interstate’s view, the fact that the general-liability

definition

excludes

Agency-provided

professional-liability

definition

practitioners
does

not

while

exclude

the
them

demonstrates that the Policy provides coverage for Nurse Cryer.
The presence of this language in the general-liability section
shows that Dimensions knew the Hospital was staffed by directhire

and

Agency-provided

practitioners

and

that

the

word

“employee” as used in the Policy includes direct-hire employees
and Agency-provided practitioners.

After all, if “employee” did

not include Agency-provided practitioners, then there would have
been

no

need

liability

to

specifically

definition

of

exclude

“protected

them

from

person.”

the
See

generalRigby

v.

Allstate Indem. Co., 123 A.3d 592, 597 (Md. Ct. Spec. App. 2015)
(noting the “basic principle of contract interpretation” that
courts

should

“give

effect

to

each

clause

of

an

insurance

policy, and avoid treating either term as surplusage” (internal
quotation marks and citation omitted)); see also Gates, Hudson &
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Assocs., Inc. v. Fed. Ins. Co., 141 F.3d 500, 503 (4th Cir.
1997)

(“Federal’s

careful

delineations

of

specific

types

of

injuries at other points in the policy suggest that the insurer
knew how to limit the term when it desired to do so.”).
We agree.

Dimensions’ decision to use different language

in different sections of the Policy when addressing the coverage
available to “employees” must be understood as an intentional
decision.

Cf. NISH v. Cohen, 247 F.3d 197, 203–04 (4th Cir.

2001) (“The omission by Congress of language in one section of a
statute that is included in another section of the same statute
generally

reflects

Congress’s

intentional

exclusion in the former section.”).

and

purposeful

Under Maryland law, we must

respect this decision and apply the Policy in a way that gives
effect to the full “Worker Protection” clause in the generalliability section and to the full “Worker Protection” clause in
the professional-liability section.

The only way to do that is,

as Interstate argues, to conclude that the term “employee” as
used in the Policy includes Agency-provided Hospital workers as
well as direct-hire Hospital workers.

Accordingly, because the

professional-liability section of the Policy extends “protected
person”

status

to

Hospital

workers

without

excluding

Agency-

provided workers, we conclude that Nurse Cryer is a protected
person under the professional-liability section of the Policy.

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Dimensions,
prevents

us

however,

from

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insists

considering

that

the

the

language

Policy
of

the

itself
general-

liability section as a guide to the meaning of the professionalliability section of the Policy.

The “General Rules” portion of

the Policy states that each “agreement” (the three sections of
the policy separately addressing coverage for general liability,
hospital

professional

liability,

and

group

physicians’

professional liability) must “be read and interpreted separately
and

independently

of

the

other

and

no

terms,

conditions

or

exceptions from one agreement shall be construed to apply to any
other agreement or provide a basis for interpretation of any
other agreement.”

J.A. 110 (emphasis added).

Relying on this

provision, Dimensions contends that this court may not look to
the

terms

scope

of

of

the

coverage

general-liability
provided

under

section
the

to

determine

the

professional-liability

section.
We need not decide whether the Policy provision operates in
the

manner

urged

by

professional-liability

Dimensions.
section

of

Even
the

if

Policy

we
in

examine

the

isolation,

without consideration of the terms of the other sections of the
Policy, we still conclude that the Policy provides coverage for
the claims asserted against Nurse Cryer.

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B.
If

we

examine

the

professional-liability

portion

of

the

Policy alone, we are presented with an insurance policy that
provides coverage to Hospital “employees” but does not define
the term.
that

In the absence of a definition or other “indication

the

parties

intended

to

use

words

in

the

policy

in

a

technical sense,” Lloyd E. Mitchell, Inc. v. Maryland Cas. Co.,
595 A.2d 469, 475 (Md. 1991), unambiguous policy language must
be

given

its

determined

by

“customary,
the

ordinary,

fictional

and

accepted

reasonably

prudent

meaning,
lay

as

person,”

Connors 113 A.3d at 603 (internal quotation marks omitted).
A
general

policy
in

term

nature

“is
or

not

ambiguous

undefined

by

simply

the

because

policy.”

it

is

Walker

v.

Fireman’s Fund Ins. Co., 505 A.2d 884, 886 (Md. Ct. Spec. App.
1986).

Instead,

a

term

“is

considered

ambiguous

if,

to

a

reasonably prudent person, the term is susceptible to more than
one

meaning.”

marks

omitted).

Connors,
To

113

A.3d

determine

at

603

whether

(internal
a

policy

quotation
term

is

ambiguous, we look only to the policy itself; we may not look to
extrinsic sources to create an ambiguity.

See Univ. of Balt. v.

Iz, 716 A.2d 1107, 1121 (Md. Ct. Spec. App. 1998); cf. Schneider
v. Continental Cas. Co., 989 F.2d 728, 731 (4th Cir. 1993) (“A
court may not, where the contractual language is clear, invite
or accept the submission of extrinsic evidence, ‘find’ ambiguity
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in the contractual text based upon that evidence, and resolve
the found ambiguity by resort to that extrinsic evidence.”).
Interstate contends that “employee” is an unambiguous term
whose ordinary, customary meaning tracks the common-law rightto-control test used to determine the existence of a masterservant relationship.

See Whitehead v. Safway Steel Prods.,

Inc.,

808-09

497

A.2d

803,

(Md.

1985)

(“This

Court

has

traditionally considered five criteria in determining whether or
not

an

parties.

employer/employee

relationship

exists

between

two

These criteria . . . include (1) the power to select

and hire the employee, (2) the payment of wages, (3) the power
to discharge, (4) the power to control the employee's conduct,
and (5) whether the work is part of the regular business of the
employer.”).

Interstate also contends that the ordinary meaning

of “employee” encompasses “borrowed” employees like Nurse Cryer,
who are paid by one employer but work under the direct control
of another.

See, e.g., Temp. Staffing, Inc. v. J.J. Haines &

Co., 765 A.2d 602, 603 n.1 (Md. 2001).
We agree with Interstate that the undefined term “employee”
is unambiguous.

See C & H Plumbing & Heating, Inc. v. Employers

Mut.

287

Cas.

Co.,

A.2d

238,

239-40

(Md.

1972)

(finding

no

ambiguity in clause excluding coverage for dishonest or criminal
act of “employee of the insured”); accord Interstate Fire & Cas.
Co. v. Washington Hosp. Ctr. Corp., 758 F.3d 378, 387 (D.C. Cir.
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2014) (policy providing coverage to all “employees” of hospital
was unambiguous); Nationwide Mut. Fire Ins. Co. v. Guman Bros.
Farm, 652 N.E.2d 684, 686 (Ohio 1995) (“[T]he term “employee” is
not defined, but does have a plain and ordinary meaning.”).

And

we likewise agree with Interstate that the common and ordinary
meaning

of

“employee”

incorporates

the

right-to-control

test.

See Interstate Fire, 758 F.3d at 386-87 (applying common-law
“right-to-control”

test

to

define

“employee”

for

purposes

of

insurance policy issued to hospital utilizing nurses provided by
staffing
2014)

agency);

(defining

see

also

“employee”

Black’s
as

Law

Dictionary

“[s]omeone

who

(10th

works

ed.

in

the

service of another person (the employer) under an express or
implied contract of hire, under which the employer has the right
to control the details of work performance” (emphasis added));
Mutual Fire Ins. Co. v. Ackerman, 872 A.2d 110, 113 (Md. Ct.
Spec. App. 2005) (looking to Black’s to determine the ordinary
meaning of an undefined term).
There can be no question that Nurse Cryer qualifies as an
employee of the Hospital under the right-to-control test.

In

Whitehead

of

Appeals

v.

Safway

applied

Steel

the

Products,

right-to-control

the
test

Maryland
to

Court

conclude

that

Safway was the employer of Whitehead, a worker who had been
assigned

to

Safway

by

a

temporary

staffing

agency:

“Safway

instructed Whitehead on the task to be performed, supervised his
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work, and was free to reassign him to any other duties that
warranted attention.
Safway

was

worker.”

free

If Whitehead’s work was unsatisfactory,

to

dismiss

497 A.2d at 809.

him

and

request

an

additional

The Hospital’s control over Cryer,

as established by the undisputed evidence in the record, mirrors
that of the staffing agency customer in Whitehead, and Nurse
Cryer therefore is an employee of the Hospital as a matter of
law.

See

id.

(“[T]emporar[y

workers]

.

.

.

who

work

in

employment circumstances similar to the one here present, are as
a

matter

of

law,

employees

of

the

customer”);

see

also

Interstate Fire & Cas. Co., 758 F.3d at 386-87 (concluding that
nurse paid by staffing agency and assigned to work at hospital
was

employee

of

hospital

under

insurance

policy

covering

hospital “employees”).
Accordingly,

we

professional-liability
“protected

person”

unambiguous.
includes

those

The
who

conclude

that
of

section

status

to

plain

and

qualify

the
the

“employees”
ordinary

as

provision
Policy
of

the

meaning

employees

under

in

the

extending
Hospital

of
the

is

“employee”
right-to-

control test, and the evidence in the record establishes that
Nurse Cryer qualifies as an employee of the Hospital under that
test.

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III.
Dimensions makes two arguments in support of its contrary
reading of the Policy.

It first argues that the term “employee”

must be interpreted in light of the Staffing Agreement between
the Hospital and the Agency.

It also argues that Nurse Cryer

qualifies as an “affiliated healthcare provider” under the terms
of the Policy but fails to meet the requirements for coverage to
extend

to

her

in

that

capacity.

We

find

neither

of

these

arguments persuasive.
A.
Dimensions first contends that we should define “employee”
as used in the Dimensions policy by reference to the Staffing
Agreement

between

the

Agency

and

the

Hospital.

Because

the

Staffing Agreement provides that Agency practitioners will be
treated

as

Dimensions

the

employees

contends

that

of

the

Nurse

Agency,

Cryer

does

not

the

Hospital,

not

qualify

as

an

“employee” under the Policy.
Dimensions’

argument

in

this

regard

Cryer’s status as a “borrowed” employee.
have

two

employers

--

a

“general”

centers

on

Nurse

Borrowed employees

employer,

who

essentially

loans the employee to a borrowing or “special” employer.

See

Lovelace v. Anderson, 785 A.2d 726, 741 (Md. 2001) (noting “the
settled

principle

simultaneously

be

of
the

Maryland
employee
15

law
of

two

that

a

worker

employers”

may

(internal

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quotation marks and alteration omitted)); Temp. Staffing, 765
A.2d

at

603

n.1

(“A

general

employer

is

an

employer

who

transfers an employee to another employer for a limited period.
A special employer is an employer who has borrowed an employee
for

a

limited

period

and

has

temporary

control over the employee’s work.”).
is

Nurse

Cryer’s

general

employer,

responsibility

and

In this case, the Agency
and

the

Hospital

is

her

special employer.

See id. (“A temporary employment company is a

general

and

employer

the

company

to

which

an

employee

is

assigned is a special employer.”).
As between the general and special employee, liability for
the employee’s act (or for the employee’s worker’s compensation
claim) turns on whose work is being done and who can control
that work:
[W]here the work to be done is the borrower’s work,
and a part of his business, and he has the power and
authority to direct when and where and how it shall be
done, and where the work is not within the scope of
the general employment of the servant, it may fairly
be said that so far as that work is concerned he is
under the control of the borrower and that the latter
will be responsible for his negligent acts.
Dippel v. Juliano, 137 A. 514, 517 (Md. 1927); see Standard Oil
Co. v. Anderson, 212 U.S. 215, 220 (1909) (“One may be in the
general service of another, and, nevertheless, with respect to
particular work, may be transferred . . . to the service of a
third person, so that he becomes the servant of that person,

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consequences

However,

if

the

general

entered

into

a

contract

of

employer

and

assigning

the

new

special

liability

relation.”).
employer

to

one

parties, courts will give effect to that contract.
Staffing,

765

commission

A.2d

to

at

611

consider

(directing

contract

workers’

between

have

of

the

See Temp.
compensation

co-employers

when

assigning liability for benefits for injured employee); Hercules
Powder Co. v. Harry T. Campbell Sons Co., 144 A. 510, 518 (Md.
1929) (reversing jury verdict in favor of special employer where
contract between general and special employer assigned liability
for employee’s negligence to special employer); see also Sea
Land Indus., Inc. v. Gen. Ship Repair Corp., 530 F. Supp. 550,
563 (D. Md. 1982) (“[U]nder Maryland law, whatever the status of
an employee under the ‘borrowed servant’ doctrine, the parties
may allocate between themselves the risk of any loss resulting
from the employee’s negligent acts.”).
It

is

argument.
employer

on

the

latter

point

that

Dimensions

pegs

its

In Dimensions’ view, a contract between a special
and

general

employer

assigning

liability

for

the

borrowed employee is determinative of the “who is an employee?”
question,

wherever

that

question

might

arise.

See

Brief

of

Appellee at 4 (stating that the Staffing Agreement “should apply
to

any

borrowed

servant

analysis

whether

it

is

made

in

the

context of a lawsuit between the borrowing and lending employer
17

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or any other entities”).

Pg: 18 of 30

Pointing to cases such as NVR, Inc. v.

Just Temps, Inc., 31 F. App’x 805 (4th Cir. 2002) (per curiam)
(unpublished),

Dimensions

argues

that

the

Staffing

Agreement

“controls the employee’s status,” Brief of Appellee at 19, which
makes

the

right-to-control

“irrelevant,” id. at 17.

or

borrowed-servant

analysis

And because the Staffing Agreement

provides that Nurse Cryer is the Agency’s employee and that the
Agency

will

be

liable

for

her

negligent

acts,

Dimensions

contends that Nurse Cryer is not a Hospital employee under the
Policy.

We disagree.

The cases on which Dimensions relies establish simply that
the

existence

unnecessary

to

of

a

apply

liability-assigning
the

(“Under

Maryland

law,

in

cases

makes

test

right-to-control

between the parties to that contract.
807

contract

a

in

it

dispute

See NVR, 31 F. App’x at
like

this

one

between

a

general employer and a borrowing employer, . . . the parties may
allocate between themselves the risk of any loss resulting from
the

employee’s

omitted;

negligent

emphasis

(“[W]hatever

the

added));
status

of

acts.”
Sea
an

(internal
Land,

530

employee

quotation
F.

under

Supp.
the

marks
at

563

‘borrowed

servant’ doctrine, the parties may allocate between themselves
the risk of any loss resulting from the employee’s negligent
acts.”

(emphasis

added)).

Nothing

in

these

cases

supports

Dimensions’ assertion that the terms of the Staffing Agreement,
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a contract to which neither Dimensions, Interstate, nor Nurse
Cryer were parties, determine the scope of the entirely separate
insurance

contract

issued

by

Dimensions

to

the

Hospital

diminish the protection provided to Cryer by the Policy.
Mayor

of

Maryland
axiomatic

Baltimore
Cas.
that

Co.,

ex
190

persons

rel.
A.
are

Lehigh
250,
only

Structural

253

(Md.

bound

by

Steel

1937)
the

See

Co.

(“It

contracts

or

v.

seems
they

make, and are not bound by contracts they do not make. . . .”).
Accepting Dimensions’ argument that the Staffing Agreement
controls the meaning of the Policy would be inconsistent with
Maryland

principles

of

contract

interpretation.

As

we

have

concluded, the Policy is not ambiguous, despite its failure to
define “employee.”

Maryland law therefore requires us to look

only to the Policy itself and to interpret it as written.

See

100 Inv. Ltd. P’ship v. Columbia Town Ctr. Title Co., 60 A.3d 1,
22 (Md. 2013)

(“[O]ur search to determine the meaning of the

contract is focused on the four corners of the agreement.

When

the clear language of a contract is unambiguous, the court will
give effect to its plain, ordinary, and usual meaning, taking
into account the context in which it is used. . . .” (internal
quotation

marks,

citation,

and

internal

alteration

omitted));

Ray v. State, ___ A.3d ___, 2016 WL 5462963, at *15 (Md. Ct.
Spec. App. Sept. 29, 2016) (“[E]xtrinsic sources of evidence
that may be helpful in resolving an ambiguity, when it actually
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exists, may not be used to create an ambiguity in the first
instance.”).
beyond

the

Dimensions,
Policy

and

however,

define

its

contends

we

unambiguous

should
terms

look

not

in

accordance with their ordinary meaning, but in accordance with
the

terms

of

a

wholly

separate

and

independent

contract.

Because that argument is inconsistent with Maryland law, we are
obliged to reject it.
The common, ordinary meaning of “employee” incorporates the
right-to-control test -- that is, one who works in the service
of another who has the right to control the details of the work
is the employee of the entity with the right to control.
arguing

that

the

Staffing

Agreement

controls

the

By

“employee”

question, Dimensions is, in effect, arguing that the common,
ordinary meaning of “employee” includes a footnote that carves
out those workers who would otherwise qualify as employees but
are the subject of a contract placing liability for them on
someone other than the entity with the right to control.
disagree.

We

As Maryland courts have made clear, “the words of

insurance contracts [must be given] their customary, ordinary,
and accepted meaning, as determined by the fictional ‘reasonably
prudent
added).

lay

person.’”

Connors,

113

A.3d

at

603

(emphasis

Lay persons do not generally footnote their words, and

we decline to append Dimension’s proposed footnote to the common
meaning

of

“employee.”

Whether
20

or

not

liability

for

the

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employee has been assigned by contract between co-employers, the
common, ordinary meaning of “employee” is one who works in the
service of and subject to the direction and control of another. *
In addition to being inconsistent with Maryland principles
of contract interpretation, Dimensions’ claim that the Staffing
Agreement controls is also largely foreclosed by this court’s
decision
Mutual

in

Travelers

Insurance

Property

Co.,

444

F.3d

and
217

Casualty
(4th

Co.

Cir.

v.

Liberty

2006).

In

Travelers, State Street Bank hired Ryland Mortgage Company to
service and manage mortgage loans held by State Street and to
manage

any

foreclosure.

properties

State

Street

took

over

through

By contract, Ryland was obligated to indemnify

State Street for any claims arising from Ryland’s management of
the loans and property.

A visitor to a foreclosed property was

*

Although we may not look to extrinsic evidence to
determine the meaning of unambiguous language contained in an
insurance policy, we must look to the actual facts of the case
to determine whether they are sufficient to trigger the coverage
provided by the policy. That is, while we may not consider the
Staffing Agreement when determining the meaning of the term
“employee” under the Policy, we must look to the facts
established through discovery to determine whether Nurse Cryer
qualifies as an “employee” as we have defined it.
As to that
question, the level of control given to the Hospital through the
Staffing Agreement is a relevant and proper consideration. See,
e.g., Interstate Fire & Cas. Co. v. Washington Hosp. Ctr. Corp.,
758 F.3d 378, 384 (D.C. Cir. 2014) (concluding that “employee”
was unambiguous term encompassing the right-to-control test and
then considering contractual level of control to determine
whether nurse qualified as an employee under the right-tocontrol test).
21

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injured and sued State Street and Ryland.
Travelers,

and

State

Street

was

Ryland was insured by

insured

by

Liberty

Mutual.

Travelers provided a defense to Ryland and subsequently sought
contribution from Liberty Mutual, arguing that Ryland was an
additional insured under the policy issued to State Street.
On appeal, we agreed with Travelers that Ryland was covered
by

the

included

Liberty
State

Mutual
Street’s

policy.
“real

The

estate

Liberty
managers”

Mutual
as

policy

additional

insureds, and Ryland’s contractual duties qualified it as a real
estate manager.

See id. at 221-22.

Liberty Mutual, therefore,

had an “independent contractual obligation to provide coverage
to Ryland.”
independent

Id. at 219.
duty

to

And because Liberty Mutual had an

provide

coverage

to

Ryland,

the

indemnification agreement between Ryland and State Street was
irrelevant:
The issue here is coverage for only Ryland’s
liability.
Travelers concededly insured Ryland, and
because of Liberty Mutual’s insuring language, it must
also insure Ryland through its additional insureds
clause. This is not a case where we are determining
State Street’s liability vis-à-vis Ryland’s. The fact
that Ryland agreed to indemnify State Street under the
Pooling Agreement does not absolve Liberty Mutual of
its independent contractual obligation to insure
Ryland as State Street’s “real estate manager.”
If
the issue in this case turned on the underlying
liability as between Ryland and State Street, we would
likely conclude, as Liberty Mutual urges, that Ryland
bore
full
responsibility
because
of
its
indemnification agreement.
But even then, having
determined that Ryland had legal responsibility for
[the injuries to the property-visiting plaintiff], we
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would still have to determine who insured that
liability. In this case Travelers concededly provided
coverage, as it issued a policy directly to Ryland as
the named insured. But Liberty Mutual, which issued a
policy to State Street as its named insured, also
provided coverage to additional insureds, not because
of any indemnity clause running in favor of its
insured State Street but because of its independent
undertaking to Ryland.
Thus, because we are deciding coverage for only
Ryland’s
liability
to
[the
property-visiting
plaintiff],
the
indemnification
agreement
is
irrelevant.
Id. at 224-25 (emphasis added).
As in Travelers, this case involves only the question of
coverage for Nurse Cryer under the policy issued by Dimensions.
The Agency and the Hospital are not parties to this action, and
there is no issue before this court regarding indemnification or
liability as between the Hospital and the Agency.

It may well

be that the primary purpose of the Dimensions policy was to
provide insurance coverage for the Hospital and its direct-hire
employees.
issue

Nonetheless, the policy that Dimensions chose to

used

language

whose

ordinary

meaning

includes

provided employees as additional insureds.

Agency-

See United Servs.

Auto. Ass’n v. Riley, 899 A.2d 819, 833 (Md. 2006) (“Courts in
Maryland
contracts,

follow
giving

the

law

effect

to

of

objective

the

clear

interpretation

terms

of

the

of

contract

regardless of what the parties to the contract may have believed
those

terms

to

mean.”

(internal

23

quotation

marks

omitted)).

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Thus, whether or not the Hospital intended to provide insurance
for

Agency-provided

employees,

Dimensions,

by

virtue

of

the

policy that it issued, has an “independent obligation to insure
[Cryer] as an additional insured.”

Travelers, 444 F.3d at 224.

And as we made clear in Travelers, the contract between the
Hospital

and

the

Agency

simply

has

no

impact

on

Dimension’s

independent obligation to provide the coverage undertaken in the
policy.

See id. at 224-25.

Therefore, for the reasons set out above, we conclude that
Nurse Cryer qualifies as an “employee” of the Hospital under the
unambiguous language of the Policy, notwithstanding the contrary
language of the Staffing Agreement.
B.
Dimensions

also

contends

that

the

Policy’s

“affiliated

health care provider” (“Affiliated Provider”) clause operates to
exclude Nurse Cryer from coverage under the Policy.
The

professional-liability

section

of

the

Policy

extends

protected-person status (and therefore coverage) to “affiliated
health care providers” under certain circumstances.

Under the

Policy,
An Affiliated Health Care Provider means any natural
person or organization [1] in the business of
rendering health care services directly to the general
public, and [2] who or which has an agreement to
provide such services in conjunction with those
provided by [the Hospital].
Affiliated Health Care
Providers are included as Protected Persons only when
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[3] a written partnership or physician affiliation
agreement
specifically
designates
the
Affiliated
Health Care Provider[] as a Named Protected Person
under this Agreement. Agencies providing clinical and
other services on a per diem or contracted basis are
not protected persons under this agreement.
J.A. 133.
Dimensions contends that Nurse Cryer meets the definitional
requirements of the Affiliated Provider clause under the Policy.
According

to

Dimensions,

Nurse

Cryer

provides

medical

care

directly to the public, thus satisfying the first Affiliated
Provider

requirement.

And

Nurse

Cryer

was

providing

those

medical services at the Hospital through a contract with the
Agency,

thus

requirement.

satisfying
Dimensions

the

second

therefore

qualifies as an Affiliated Provider.

Affiliated

contends

that

Provider

Nurse

Cryer

An Affiliated Provider is

a Protected Party, however, only if the third requirement is
satisfied -- there must be a contract expressly designating the
Provider as protected.

Because there is no such contract in

this case, Dimensions contends that Nurse Cryer is an Affiliated
Provider who is not a Protected Person under the Policy.
In our view, the Affiliated Provider clause cannot carry
the

meaning

assigned

to

it

by

Dimensions.

If

Dimensions’

reading of the clause were correct, then all of the Hospital’s
medical-care-providing

employees,

whether

contract, would qualify as Affiliated Providers.

25

direct-hire

or

If Nurse Cryer

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is “in the business of rendering health care services directly
to the general public,” J.A. 133, then so are direct-hire nurses
and

direct-hire

or

contract

doctors.

And

if

Nurse

Cryer’s

contract with the Agency, or any implied contractual agreement
she

might

have

had

with

the

Hospital

itself,

satisfies

the

requirement for an “agreement to provide [health care] services
in conjunction with those provided by [the Hospital],” J.A. 133,
then

the

contracts

between

the

Hospital

and

its

direct-hire

care-providing employees would satisfy the requirement as well.
Thus,

under

Dimensions’

argument,

all

of

the

Hospital’s

care-providing employees, whether contract or direct-hire, would
qualify as Affiliated Providers.

All of those employees would

be precluded from Protected Person status (and therefore not
insured under the Policy) for the same reason that Dimensions
contends
“written

Nurse
.

.

Cryer
.

is

not

agreement

protected

--

specifically

the

absence

designat[ing]

of

a

the

Affiliated Health Care Provider[] as a Named Protected Person
under this Agreement.”

J.A. 133.

The “Worker Protection” clause contained in the hospitalliability

section

of

the

Policy

explicitly

extends

Protected

Person status to the Hospital’s “present and former employees,
students and authorized volunteer workers,” J.A. 134, without
conditioning that status on the existence of a separate contract
designating them as protected.

Because Dimensions’ reading of
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Affiliated

Provider

Pg: 27 of 30

clause

would

render

illusory

the

coverage provided by the “Worker Protection” clause, we must
reject it.

See Cochran v. Norkunas, 919 A.2d 700, 710 (Md.

2007) (“[A] contract must be construed in its entirety and, if
reasonably possible, effect must be given to each clause so that
a

court

will

disregards

a

not

find

meaningful

an

interpretation

part

of

the

which

language

casts

of

the

out

or

writing

unless no other course can be sensibly and reasonably followed.”
(emphasis added and internal quotation marks omitted)); Kelley
Constr. Co. v. Washington Suburban Sanitary Comm’n, 230 A.2d
672, 676 (Md. 1967) (“[T]he courts will prefer a construction
which will make the contract effective rather than one which
will

make

it

illusory

marks omitted)).

or

unenforceable.”

(internal

quotation

Instead, we must read the Affiliate Provider

clause in a way that preserves the coverage provided in the
Worker

Protection

clause.

See

Rigby,

123

A.3d

at

597

(explaining that courts should “give effect to each clause of an
insurance policy, and avoid treating either term as surplusage”
(internal quotation marks and citation omitted)).
As quoted above, the Policy defines Affiliated Provider as
a “natural person or organization in the business of rendering
health care services directly to the general public, and who or
which has an agreement to provide such services in conjunction
with those provided by [the Hospital].”
27

J.A. 133.

The phrase

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“in conjunction with” means “in combination with” or “together
with,”

see

www.Merriam-Webster.com

(saved

as

ECF

opinion

attachment), which demonstrates that the clause contemplates the
provision of health care services in addition to those services
already being provided by the Hospital.

Thus, the clause is

directed to entities that provide medical services to the public
independently

of

the

Hospital

and

agree

to

provide

those

services together with the services provided by the Hospital.
(For example, a medical specialist with an independent practice
who agrees to affiliate with the Hospital would qualify as an
Affiliated Provider.)
So understood, it is clear that Hospital employees (whether
contract or direct-hire) do not qualify as Affiliated Providers.
The Hospital provides its medical services through its workers,
be they contract or direct-hire.
medical

services

directly
and

to
only

The workers do not provide

the
on

public,
the

but

terms

only

to

the

dictated

by

the

Hospital’s

patients,

Hospital.

Hospital workers thus are not providing health care

services in addition to or alongside the health care services
provided

by

the

Hospital;

they

are

the

ones

providing

Hospital’s health care services in the first instance.
the

Hospital

cannot

act

in

concert

with

itself,

a

the

Because
Hospital

worker cannot be said to be providing health care services “in

28

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conjunction

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with”

the

Pg: 29 of 30

Hospital,

as

the

Policy

requires

to

directed

to

qualify as an Affiliated Provider.
That

the

Affiliated

Provider

clause

is

independent entities rather than Hospital workers is confirmed
by

the

physician
Provider

clause’s

requirement

affiliation
as

a

named

(emphasis added).
that

the

of

“a

agreement”
insured

written

partnership

designating

under

the

the

or

Affiliated

Policy.

J.A.

133

This language describes the kind of contract

Hospital

would

enter

into

with

an

independently

operating medical business, not with its employees.
Accordingly,
contract

or

we

direct

conclude
hire,

that
do

Hospital

not

meet

workers,
the

whether

definitional

requirements of an Affiliated Provider under the terms of the
Policy.

We

therefore

reject

Dimensions’

claim

that

the

Affiliated Provider clause operates to preclude coverage under
the Policy for Nurse Cryer.
IV.
To summarize, we conclude that the term “employee” as used
in the Dimensions Policy is not ambiguous and that it includes
those

workers

control

test.

who

qualify

as

Dimensions

employees
therefore

under
has

the
an

right-to-

independent

obligation to provide coverage to those workers who meet the
definition of “employee,” without regard to how those workers
may be classified under the Staffing Agreement executed by the
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Hospital and the Agency.

Pg: 30 of 30

Because the evidence contained in the

record establishes that Nurse Cryer is the Hospital’s employee
under the right-to-control and the borrowed-servant standards,
she is a “protected person” who qualifies for coverage under the
professional-liability portion of the Dimensions Policy.
We therefore vacate the district court’s opinion granting
summary

judgment

in

favor

of

Dimensions,

and

we

remand

for

further proceedings consistent with this opinion.

VACATED AND REMANDED

30