Allied World Assurance Company v. Lee Memorial Health System et al

Filing 49

ORDER denying 37 Allied World Assurance Company's Motion for Judgment on the Pleadings. Signed by Judge Sheri Polster Chappell on 10/2/2018. (LMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
ALLIED WORLD ASSURANCE
COMPANY,
Plaintiff,
v.

Case No: 2:18-cv-158-FtM-38CM

LEE MEMORIAL HEALTH SYSTEM,
LESLEY HOLMAN, DOMINGO
PEREZ TROY and MARIA PEDRO
RUPERTO,
Defendants.
/
OPINION AND ORDER1
Before the Court is Allied World Assurance Company's Motion for Judgment on
the Pleadings (Doc. 37) and Lee Memorial Health System's response in opposition (Doc.
40), which was joined by Defendants Lesley Holman, Domingo Perez Troy, and Maria
Pedro Ruperto (Doc. 42). For the following reasons, the Court denies the Motion.
BACKGROUND
This is an insurance coverage dispute. Allied issued two Healthcare Excess and
Umbrella Liability Insurance Policies to Lee Health. Each policy was in effect for a oneyear period; the first began on August 1, 2016, and the second on August 1, 2017. (Doc.

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1-1; Doc. 1-2). Aside from the dates, the relevant terms of the two policies are the same.
Allied seeks a declaration that the policies afford no coverage for a medical negligence
case styled Holman v. United States of America et al., No. 2:18-cv-76-UA-MRM (M.D.
Fla.) (the “Underlying Action”).
The Underlying Action arises from the treatment of Viviana Pedro, who was
admitted to Lee Health’s Gulf Coast Medical Center for labor and delivery on December
12, 2015. (Doc. 1 at 4). Pedro alleges that she suffered a brain injury in connection with
her treatment. (Doc. 1 at 5). Lee Health received a Notice of Intent to Initiate Medical
Malpractice Litigation on September 1, 2017, and the Underlying Action was filed about
five months later. (Doc. 1-3; Doc. 25 at 5). The parties dispute whether the policies cover
the Underlying Action. (Doc. 1 at 2; Doc. 25 at 2).
DISCUSSION
“Judgment on the pleadings is appropriate where there are no material facts in
dispute and the moving party is entitled to judgment as a matter of law.” Perez v. Wells
Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014). In deciding a motion for judgment on
the pleadings, courts “accept as true all material facts alleged in the non-moving party’s
pleadings” and “view those facts in the light most favorable to the non-moving party.” Id.
Judgment on the pleadings must be denied when a material fact is in dispute. Id.
Allied argues that two exclusions in the policies exclude coverage of the Underlying
Action as a matter of law. Both parties attach the policies as exhibits to their pleadings,
so they are not in dispute. Before addressing the policy language, the Court turns to a
letter dated December 1, 2017, which Allied filed to support its Motion.

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When deciding a motion for judgment on the pleadings, courts may consider
documents outside the pleadings only if “they are central to the claim at issue and their
authenticity is undisputed.” Id. at 1340 n.12. When deciding whether documents are
central to a claim, “courts conduct a fact-sensitive analysis, considering such factors as:
whether the claims depend on the documents; whether the contents of the documents
are alleged in the complaint; or whether the documents form a necessary part of the
plaintiff’s effort to make out his claim.” Ramey v. Interstate Fire & Cas. Co., 32 F. Supp.
3d 1199, 1203 (S.D. Fla. 2013) (internal citations and quotations omitted).
The December 1, 2017 letter was written by a paralegal in Lee Health’s Legal
Services department in response to a request for information from Allied. (Doc. 43). The
letter states, in relevant part:
•

•

An explanation as to when a member of Lee Health’s, Gulf Coast
Medical Center’s (or any other Insured Entity’s) Risk Management
Department, Legal Department, Executive or Management Teams,
or any individual charged with the responsibility of receiving incident
reports, was first informed about the issues surrounding Ms. Pedro’s
delivery on December 12, 2015. Please also provide a copy of the
internal reporting communications.
o Email received 12/13/15. Safety report filed 12/14/15.
o We do not have an incident report related to this event. Risk
Management received a safety report, which was submitted
to our patient safety organization in April 2016.
An explanation as to whether the Pedro Matter was notified or
reported to any other insurer that provided coverage to Lee Health
prior to August 1, 2016.
o AIG notified 8/12/2016.

(Doc. 43). In the Complaint, Allied alleges the existence of the letter and its contents, and
the information in the letter is essential to Allied’s case. (Doc. 1 at ¶ 36). For its part, Lee
Health admits sending the letter, and its Response addresses the letter without

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challenging Exhibit A’s authenticity. (Doc. 25 at ¶ 36; Doc. 48). The Court thus finds that
Exhibit A can be considered.
Turning to the issue of coverage, Allied first argues the Underlying Action falls
under Exclusion D.2 of the policies, which excludes claims based on
any Occurrence, claim, suit or Medical Professional Incident (hereinafter
a “matter”) taking place prior to the earlier of, (a) the Inception Date of this
Policy, or (b) the Inception Date of the first policy issued by the Insurer to
the Insured of which this Policy is a renewal, if a member of the Insured
Entity’s Risk Management Department, Legal Department, Executive or
Management Teams or any individual charged with the responsibility of
receiving incident reports for the Insured Entity, on or before such date,
knew of such matter.
(Doc. 1-1 at 28; Doc. 1-2 at 26). It is undisputed that the Underlying Action is based on
treatment provided December 12, 2015, months before the Inception Date of the first
Allied policy. (Doc. 1 at ¶ 10; Doc. 1-3; Doc. 25 at 11). The “knowledge” requirement is
a thornier issue.
Allied makes several allegations regarding Lee Health’s knowledge, and Lee
Health’s responses are varied. Allied first asserts, “Lee Health’s and/or Gulf Coast’s Risk
Management Department was informed of the complications surrounding Ms. Pedro’s
labor and delivery before August 1, 2016.” (Doc. 1 at ¶ 14). Lee Health responds that it
“cannot form an answer to paragraph 14, as the word ‘complication’ is not defined, and is
otherwise too vague. Therefore denied.” (Doc. 25 at 3). Allied also alleges, “On
December 1, 2017,…Lee Health sent a Letter to Allied World confirming that Lee Health’s
Risk Management Department was aware of the Incident prior to August 1, 2016[.]” (Doc.
1 at ¶ 36). In response, Lee Health admits that it sent the letter and denies the remaining
allegations to the extent they “contradict or misinterpret the December 1, 2017 response
by Lee Health or the effect of any items referenced therein[.]” (Doc. 25 at 6-7). Finally,

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Allied alleges, “Lee Health and/or Gulf Coast’s Risk Management Department knew of
the Incident prior to August 1, 2016. (Doc. 1 at ¶ 40). Lee Health denies this allegation.
(Doc. 25 at 7). The pleadings demonstrate that Lee Health’s knowledge is in dispute.
Allied next argues the Underlying Action falls under Exclusion D.16, which
excludes claims based on
any facts, matters, events, suits or demands, acts, errors or omissions,
incidents, Occurrences or Medical Professional Incidents notified or
reported to, deemed notified or reported to, or which should have been
notified or reported to, any policy of insurance or policy or program of selfinsurance in effect prior to the Inception Date of this Policy.
(Doc. 1-1 at 31; Doc. 1-2 at 29). Allied alleges that Lee Health was insured by AIG Policy
No. 6797308 before the inception of the first Allied policy, and that Lee Health notified
AIG of the Pedro matter on August 12, 2016. (Doc. 1 at ¶ 23, ¶¶ 45-46). Lee Health
denies these allegations in its Answer, while pleading in its Counterclaim, “at the time that
Lee Health notified AIG (i.e. August 12, 2016), the AIG policy was not in effect, as AIG
has denied coverage under the policy.” (Doc. 25 at 5, 7, 16).
By affirming the December 1, 2017 letter while denying allegations that mirror its
contents, Lee Health paints a confusing picture. And Lee Health’s pleading appears
inconsistent as to the AIG policy. But in deciding Allied’s 12(c) Motion, Lee Health’s
denials are accepted as true, and the facts are interpreted in Lee Health’s favor. Lee
Health’s knowledge is material to the application of Exclusion D.2, and the pleadings
place the issue in dispute. The pleadings likewise dispute the effective dates of the AIG
policy, an essential element of Exclusion D.16. The pleadings thus do not establish
undisputed facts entitling Allied to judgment as a matter of law, and Allied’s Motion must
be denied.

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Accordingly, it is now
ORDERED:
Allied World Assurance Company's Motion for Judgment on the Pleadings (Doc.
37) is DENIED.
DONE and ORDERED in Fort Myers, Florida this 2nd day of October, 2018.

Copies: All Parties of Record

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