Health First, Inc. et al v. Capitol Specialty Insurance Corporation et al
Filing
117
ORDER granting 41 Motion for summary judgment; granting 45 Motion for summary judgment; denying 54 Motion to Strike. Signed by Judge Carlos E. Mendoza on 2/14/2017. (MDS)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
HEALTH FIRST, INC., HOLMES
REGIONAL MEDICAL CENTER, INC.,
CAPE CANAVERAL HOSPITAL, INC.,
HEALTH FIRST PHYSICIANS, INC.,
HEALTH FIRST HEALTH PLANS,
INC. and HEALTH FIRST
INSURANCE, INC.,
Plaintiffs,
v.
Case No: 6:15-cv-718-Orl-41DCI
CAPITOL SPECIALTY INSURANCE
CORPORATION, DARWIN
NATIONAL ASSURANCE COMPANY,
DARWIN SELECT INSURANCE
COMPANY, EXECUTIVE RISK
INDEMNITY, INC. and EXECUTIVE
RISK SPECIALTY INSURANCE CO.,
Defendants.
/
ORDER
THIS CAUSE is before the Court on the Motion for Summary Judgment (Doc. 41) filed
by Defendants Executive Risk Indemnity, Inc. and Executive Risk Specialty Insurance Co.
(collectively, “Executive Risk”), to which Plaintiffs filed a Response (Doc. 49). Executive Risk
filed a Reply (Doc. 51) as well as two Notices of Supplemental Authority (Doc. Nos. 70, 97). This
cause is also before the Court on the Motion for Summary Judgment (Doc. 45) filed by Defendants
Capitol Insurance Corporation, Darwin National Assurance Company, and Darwin Select
Insurance Company (collectively, “Allied World”). Plaintiffs filed a Response (Doc. 50), and
Allied World filed a Reply (Doc. 53) as well as two Notices of Supplemental Authority (Doc. Nos.
69, 96). Additionally, before the Court is Plaintiffs’ Motion to Strike (Doc. 54) and Executive
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Risk’s Response (Doc. 57). For the reasons stated herein, Plaintiffs’ Motion to Strike will be
denied and Defendants’ Motions for Summary Judgment will be granted.
I.
FACTUAL BACKGROUND
Plaintiff Health First, Inc. (“Health First”) was first formed in 1995 when two Brevard
County hospitals, Plaintiff Holmes Regional Medical Center and Plaintiff Cape Canaveral
Hospital, merged to form a non-profit organization to provide integrated healthcare services. (Doc.
49 at 9). 1 In 2011, Health First opened another hospital in Viera, Florida. (Id.). Health First also
operates a physician group, “Health First Physicians, Inc.,” and has its own network of managed
care health plans offered through Plaintiff Health First Health Plans, Inc. (“HFHP”) and Plaintiff
Health First Insurance, Inc. (Mathias Aff. in Resp. to Executive Risk’s Mot. for Summ. J., Doc.
49-17, ¶¶ 4–9). Plaintiffs were named as defendants in several lawsuits between 1998 and 2013.
The current dispute centers around whether multiple insurance contracts issued by Defendants
provide coverage for claims arising from litigation instituted against Plaintiffs.
The Underlying Insurance Policies
Health First and HFHP have purchased numerous insurance policies from Defendants. As
relevant to this suit, Health First purchased from Executive Risk Indemnity, Inc. (“ERI”) a
Directors, Officers, and Trustees Liability Insurance Policy (“1997 Executive Risk D&O Policy,”
Doc. 41-2), effective 1997–1998, 2 and a Managed Care Organization Errors and Omissions
Liability Policy (“1998 Executive Risk E&O Policy,” Doc. 41-1), effective 1998–1999. Health
1
All pinpoint citations refer to the electronic page number, as designated in this case.
All policies mentioned herein became effective on October 1 of the year they were
purchased and expired on October 1 of the following year, with the exception of the 2012 Managed
Care Organizations Errors and Omissions Policy issued by Darwin Select Insurance Company and
the 2012 Healthcare Organization Directors and Officers Liability Policy issued by Darwin
National Assurance Company, which became effective on November 1 of the year they were
purchased and expired on November 1 of the following year.
2
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First subsequently purchased two Directors, Officers, and Trustees Liability Policies from ERI—
one providing coverage from 2004–2005 (“2004 Executive Risk D&O Policy,” Doc. 49-3) and
another for 2006–2007 (“2006 Executive Risk D&O Policy,” Doc. 49-4). In 2004, HFHP
purchased a Managed Care Organization Errors and Omissions Liability Policy (“2004 Executive
Risk E&O Policy,” Doc. 49-2), effective 2004–2005, from Executive Risk Specialty Insurance
Company.
In addition to the 2004 Executive Risk E&O Policy, HFHP purchased an Excess Insurance
Policy (“2004 Capitol Excess E&O Policy,” Doc. 50-1) from Defendant Capitol Specialty
Insurance Corporation (“Capitol”), effective 2004–2005. HFHP also obtained from Capitol a
Managed Care Organizations Errors and Omissions Liability Policy (“2006 Capitol E&O Policy,”
Doc. 50-2), effective 2006–2007. In 2012, HFHP purchased a Managed Care Organization Errors
and Omissions Liability Policy (“2012 Darwin Select E&O Policy,” Doc. 50-4) from Darwin
Select Insurance Company (“Darwin Select”), effective 2012–2013. Additionally, Darwin
National Assurance Company (“Darwin National”) issued a Health Care Organization Directors
and Officers Liability Insurance Policy (“2012 Darwin National D&O Policy,” Doc. 50-3) to
Health First, effective 2012–2013.
All of the abovementioned policies are “claims made policies,” meaning that coverage is
triggered under each policy for claims that are first made during the respective policy period. (Doc.
41-2 at 26; Doc. 41-1 at 15; Doc. 49-2 at 5; Doc. 49-3 at 45; Doc. 49-4 at 5; Doc. 50-1 at 2; Doc.
50-2 at 4; Doc. 50-3 at 61; Doc. 50-4 at 28). All of the policies also contain a related claims
provision, which provides that all related claims are treated as a single claim and are deemed to
have been made when the earliest of the related claims was made. (Doc. 41-1 at 22; Doc. 41-2 at
29–30; Doc. 49-2 at 14–15; Doc. 49-3 at 49; Doc. 49-4 at 9; Doc. 50-2 at 7–8; Doc. 50-3 at 72;
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Doc. 50-4 at 32; see Doc. 50-1 at 4 (providing under the 2004 Capitol Excess E&O Policy that
excess coverage would “apply in conformance with the terms and conditions of” the 2004
Executive Risk E&O Policy)). According to the policies, related claims include “all Claims for
Wrongful Acts based on, arising out of, directly or indirectly resulting from, in consequence of, or
in any way involving the same or related facts, circumstances, situations, transactions, or events
or the same or related series of facts, circumstances, situations, transactions, or events.” 3 (Doc.
41-1 at 17; Doc. 49-2 at 8; accord Doc. 41-2 at 29–30; Doc. 49-3 at 17; Doc. 49-4 at 36; Doc. 502 at 14; Doc. 50-3 at 64; Doc. 50-4 at 39).
Also relevant is the prior/pending litigation exclusion. This exclusion, which is found in
all of the policies, provides that coverage is barred for claims “based on, arising out of, directly or
indirectly resulting from, in consequence of, or in any way involving any fact, circumstance or
situation . . . underlying or alleged in any prior and/or pending litigation as of the [policy’s]
Inception Date.” (Doc. 41-2 at 28; Doc. 49-3 at 47; Doc. 49-4 at 7; accord Doc. 41-1 at 20; Doc.
49-2 at 12; Doc. 50-2 at 6; Doc. 50-3 at 67; Doc. 50-4 at 30; see also Doc. 50-1 at 4 (explaining
that coverage under the 2004 Capitol Excess E&O Policy would apply in conformance with the
terms and conditions of the primary policy)).
The Underlying Litigation
Between 1998 and 2013, Health First and other Health First entities were named as
defendants in several lawsuits. In February 1998, Wuesthoff Health Systems, Inc. (“Wuesthoff”)
filed suit (“Wuesthoff I”) against Health First, Holmes Regional Medical Center, Inc., and Cape
Canaveral Hospital, Inc. in the U.S. District Court for the Middle District of Florida. (See
Wuesthoff I Compl., Doc. 41-3). Wuesthoff alleged that Health First had engaged in
3
Where policy language is quoted throughout this Order, all emphasis has been omitted.
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anticompetitive behaviors to promote its own hospital to the detriment of Wuesthoff’s Rockledge
hospital, Wuesthoff Memorial Hospital, in central Brevard County (Id. ¶¶ 2, 7). Wuesthoff
voluntarily dismissed the case, (Apr. 7, 1999 Order, Doc. 49-5, at 4), and, in July 1999, refiled the
case (“Wuesthoff II”) in state court, adding HFHP as a defendant. (Wuesthoff II Compl., Doc. 496). The parties settled the case in 2000. (Doc. 49-17 ¶ 17; see also Settlement Agreement, Doc.
49-7; Mutual Release, Doc. 49-8). Wuesthoff again filed suit (“Wuesthoff III”) against Health First
in the Middle District of Florida in September 2005. (Wuesthoff III Compl., Doc. 41-5). The suit
named the same defendants as Wuesthoff II and added Health First, Physicians, Inc. as a party.
(Compare Doc. 49-6 at 2, with Doc. 41-5 at 2). Wuesthoff again alleged that Health First had
engaged in anticompetitive conduct to thwart Wuesthoff’s new hospital in Melbourne, part of
southern Brevard County. (See generally Doc. 41-5). Thereafter, the court dismissed the action
pursuant to Wuesthoff’s motion for a voluntary dismissal, (March 8, 2007 Order, Doc. 49-13), and
Wuesthoff refiled the case (“Wuesthoff IV”) in state court in May 2007. (Wuesthoff IV Compl.,
Doc. 49-14).
Also in May 2007, Dr. Richard Hynes and the Brevard Orthopedic, Spine & Pain Clinic
(“the B.A.C.K. Center”) filed a lawsuit (“Hynes”) in state court against the same Health First
defendants as Wuesthoff IV. (Hynes Compl., Doc. 41-7). The Hynes action involved Health First’s
allegedly monopolistic and anticomptetive behaviors, such as Health First’s practice of punishing
doctors that do not exclusively refer patients to Health First facilities and physicians. For example,
the Hynes complaint alleged that Dr. Hynes and the B.A.C.K. Center were excluded from HFHP
provider panels after they began to perform more surgical procedures at Wuesthoff Medical
Center-Melbourne. (Doc. 41-7 ¶¶ 94–95). Wuesthoff IV and Hynes were consolidated for all
pretrial purposes. (Sept. 8, 2010 Order, Doc. 41-10). The parties settled Wuesthoff IV in 2012,
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(Doc. 49-17 ¶ 19); several of the causes of action in Hynes have been dismissed, but the case
remains pending, (see Am. Notice of Voluntary Dismissal, Doc. 49-15; Notice of Voluntary
Dismissal, Doc. 49-16).
Finally, in September 2013, Omni Healthcare Inc., Interventional Spine Institute of Florida,
and several individual medical providers brought suit (“Omni”) in the Middle District of Florida
against Health First and other Health First entities. (Omni Compl., Doc. 45-2). The defendants in
this action were the same as the defendants in the Hynes litigation, with the addition of Health First
Insurance, Inc. and two former presidents of Health First and Homes Regional. (See id. at 2). The
Omni complaint also focused on Health First’s alleged abuse of its monopoly power and its
wrongful anticompetitive conduct. Specifically, Omni involved allegations of retaliation
experienced by the plaintiffs after they failed to comply with Health First’s demands to, among
other things, exclusively refer patients to Health First hospitals and physicians. (Omni Third Am.
Compl., Doc. 45-3, ¶ 2). The Omni plaintiffs alleged that Health First’s retaliatory actions included
excluding the plaintiffs from the Health First network, (see Doc. 45-3 ¶¶ 222–23), having their
Health First hospital privileges revoked, (id. ¶ 273), and preventing the plaintiffs from receiving
referrals due to Health First’s coercive and exclusive physician referral practices, (id. ¶ 269). The
Omni suit is still pending. (Mathias Aff. in Resp. to Allied World’s Mot. for Summ. J., Doc. 50-5,
¶ 23).
Acceptance and Denial of Coverage
It is undisputed that Plaintiffs submitted Wuesthoff I for coverage under the 1997 Executive
Risk D&O Policy, and Executive Risk advanced defense expenses under a full reservation of
rights. (Doc. 41 at 10; see generally Doc. 49). After Wuesthoff II was filed, Plaintiffs submitted
Wuesthoff II for coverage under the same 1997 Executive Risk D&O Policy as well as the 1998
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Executive Risk E&O Policy. (Doc. 41 at 10). Executive Risk paid defense and indemnity costs
related to Wuesthoff II under both the 1997 and 1998 polices. (Id.). After Wuesthoff III was
initiated, Plaintiffs submitted the claims for coverage. (Id.). Executive Risk informed Plaintiffs
that, due to the substantial overlap in the factual allegations in Wuesthoff I, Wuesthoff II, and
Wuesthoff III, Wuesthoff III would be considered a related claim to Wuesthoff I and Wuesthoff II
and any coverage would be limited to the 1997 Executive Risk D&O Policy and the 1998
Executive Risk E&O Policy. Furthermore, Executive Risk contends that “[a]s a result of payments
to Health First relating to all five Wuesthoff/Hynes lawsuits” under the 1997 and 1998 policies,
“the combined limits of Executive Risk’s 1997 D&O Policy and [the 1998 E&O] Policy, which
totaled $16 million,” (see Doc. 41-2 at 2 (setting a $15 million liability limit); Doc. 41-1 at 2
(setting a $1 million liability limit)), “have been fully exhausted.” (Doc. 41 at 10).
Plaintiffs also sought coverage for the Wuesthoff III, Wuesthoff IV, Hynes, and Omni
actions under the Allied World policies. Capitol received notice of the Wuesthoff III, Wuesthoff
IV, and Hynes actions and denied coverage under the 2004 Capitol Excess E&O Policy. (Nov. 4,
2009 Letter, Doc. 45-4, at 2; Aug. 1, 2013 Letter, Doc. 45-5, at 2–3). Capitol denied coverage
because Wuesthoff III, Wuesthoff IV, and Hynes were deemed related to Wuesthoff I and Wuesthoff
II, which were covered under the 1997 Executive Risk D&O Policy and the 1998 Executive Risk
E&O Policy. (See Doc. 45-4 at 2; Doc. 45-5 at 2–3). Thus, the claims were deemed to have been
made prior to the inception date of the 2004 Capitol Excess E&O Policy. (See Doc. 45-4 at 2; Doc.
45-5 at 3).
Additionally, Darwin National and Darwin Select informed Plaintiffs that there was no
coverage for the Omni action under the 2012 Darwin National D&O Policy, the 2012 Darwin
Select E&O Policy, or any other policy issued by Capitol, Darwin Select, or Darwin National.
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(Oct. 18, 2013 Letter, Doc. 45-6, at 2–3). The letter denying coverage indicated that the Wuesthoff,
Hynes, and Omni suits were all related, and thus the claims for which Plaintiffs sought coverage
were deemed made before any policy was issued by Capitol, Darwin Select, or Darwin National.
(Id. at 1–2, 10–11).
As a result, Plaintiffs instituted this suit. Plaintiffs seek coverage for defense costs incurred
as well as the amount paid to settle the claims first asserted in Wuesthoff III under the 2004
Executive Risk D&O Policy, the 2004 Executive Risk E&O Policy, and the 2004 Capitol Excess
E&O Policy. Plaintiffs also seek coverage for defense costs incurred to defend the Hynes action
under the 2006 Executive Risk D&O Policy and the 2006 Capitol E&O Policy. Additionally,
Plaintiffs seek coverage for defense costs incurred in the Omni action under the 2012 Darwin
Select E&O Policy and the 2012 Darwin National D&O Policy.
II.
MOTION TO STRIKE
The Court will address Plaintiffs’ Motion to Strike because it affects the evidence that the
Court will consider when analyzing Defendants’ Motion for Summary Judgment. Plaintiffs ask
this Court to strike Exhibit A to Executive Risk’s Reply regarding its Motion for Summary
Judgment. Exhibit A is a letter from legal counsel that represented Health First in the underlying
litigation. (May 21, 2009 Letter, Doc. 51-1). Plaintiffs argue that the letter should be stricken
because it is new evidence that was inappropriately submitted with Executive Risk’s Reply,
thereby denying Plaintiffs the opportunity to respond. The Court disagrees. The letter is not
submitted by Executive Risk to support an entirely new argument. Rather, it was provided by
Executive Risk to rebut the position taken by Plaintiffs in their Response that the Hynes and
Westhoff suits were not related. Therefore, submitting the letter with their Reply was permissible.
See First Specialty Ins. Corp. v. 633 Partners, Ltd., 300 F. App’x 777, 788 (11th Cir. 2008);
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Stewart-Patterson v. Celebrity Cruises, Inc., No. 12-20902-CIV, 2012 WL 5997057, at *2 (S.D.
Fla. Nov. 30, 2012) (recognizing that denying a motion to strike evidence filed with a summary
judgment reply brief is proper where the evidence submitted on reply “merely respond[s] to
arguments and issues raised in [the] plaintiff’s opposition without proffering new grounds for entry
of summary judgment” (quotation omitted)); see also Giglio Sub s.n.c. v. Carnival Corp., No. 1221680-CIV, 2012 WL 4477504, at *3 (S.D. Fla. Sept. 26, 2012), aff’d, 523 F. App’x 651 (11th
Cir. 2013) (per curiam) (denying a motion to strike evidence submitted with a reply brief and
noting that although the defendants could have addressed the issue by submitting the evidence
with their motion for summary judgment, the defendants had no “obligation to raise the issue
preemptively”).
Moreover, it appears that one member of Plaintiffs’ counsel in this case was also involved
in the underlying litigation and was carbon copied on the letter. “Since [Plaintiffs’] counsel
participated in the underlying case, [Plaintiffs’ counsel] cannot claim surprise or lack of
knowledge.” First Specialty Ins. Corp., 300 F. App’x at 788. While Plaintiffs aver that they have
been deprived of an opportunity to respond to the letter, they did not request leave to file a surreply
to address the contents of the letter. See Lightsey v. Potter, 268 F. App’x 849, 852 (11th Cir. 2008)
(affirming the district court’s reliance on declarations attached to a reply brief and noting that the
party moving to strike the declarations as new evidence submitted with a reply never sought leave
to file a surreply); see also United States v. Carter, 506 F. App’x 853, 860 (11th Cir. 2013) (“[H]ad
Carter wished to respond to the government’s reply, she could have sought . . . leave to do so, but,
as she did not, the [judge] was free to rely on the evidence the government attached to its reply.”);
M.D. Fla. R. 3.01(c) (permitting a party to file additional memoranda with leave of court).
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Plaintiffs also take the position that the letter should be stricken from the record to avoid
disclosure, not to Executive Risk—a request that would be futile for obvious reasons—but to third
parties. (See Doc. 54 at 2 n.2 (“Health First’s motion here is concerned with protecting
communications relative to third-parties.”)). 4 Plaintiffs’ contend that the letter was intended to be
a confidential communication between insured and insurer. However, upon examining the letter,
the Court finds that it does not appear to contain any confidential information. The letter, written
in 2009, merely recites the claims asserted in the litigation and the procedural histories of
Wuesthoff IV and Hynes. While the letter is also labeled “Attorney Work Product,” the burden of
demonstrating that the attorney work product privilege applies, “rests on the party advocating for
the protection.” MapleWood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 620 (S.D.
Fla. 2013). Plaintiffs have failed to demonstrate that the privilege applies. Nor is it clear how the
privilege would apply to bar disclosure of the letter to unnamed third parties. See Visual Scene,
Inc. v. Pilkington Bros., plc., 508 So. 2d 437, 442 (Fla. 3d DCA 1987) (noting that the attorney
work product privilege is “designed to promote the adversary system by protecting an attorney’s
trial preparations, not necessarily from the rest of the world, but from an opposing party in
litigation”). In light of the previous considerations, and noting that “[a] motion to strike is a drastic
remedy that is disfavored by the courts,” Agan v. Katzman & Korr, P.A., 328 F. Supp. 2d 1363,
1367 (S.D. Fla. 2004), the Court will deny Plaintiffs’ Motion to Strike.
As to Plaintiffs’ alternative argument that the letter should be filed under seal, Plaintiffs’
request will be denied without prejudice due to Plaintiffs’ failure to comply with Local Rule 1.09.
4
The Court notes the distinction because Executive Risk’s Response focuses on the
common interest doctrine and why the letter is not privileged as to Executive Risk. But Plaintiffs
are not arguing that the letter should be kept from Executive Risk and do not appear to dispute that
the common interest doctrine applies. (See Doc. 54 at 2 (citing cases where the common interest
doctrine applied)).
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III.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when the moving party demonstrates “that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). A dispute is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A fact is material if it may “affect the outcome of the suit under the governing law.” Id.
“The moving party bears the initial burden of showing the court, by reference to materials on file,
that there are no genuine issues of material fact that should be decided at trial.” Allen v. Bd. of Pub.
Educ., 495 F.3d 1306, 1313–14 (11th Cir. 2007). Stated differently, the moving party discharges
its burden by showing “that there is an absence of evidence to support the nonmoving party’s
case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
However, once the moving party has discharged its burden, the nonmoving party must “go
beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories,
and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Id.
at 324 (quotation omitted). The nonmoving party may not rely solely on “conclusory allegations
without specific supporting facts.” Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir. 1985).
Nevertheless, “[i]f there is a conflict between the parties’ allegations or evidence, the [nonmoving]
party’s evidence is presumed to be true and all reasonable inferences must be drawn in the
[nonmoving] party’s favor.” Allen, 495 F.3d at 1314.
IV.
SUMMARY JUDGMENT
Principles of Insurance Contract Interpretation
It is undisputed that Florida law governs the interpretation of the insurance policy at issue.
In Florida, “[s]ummary judgment is appropriate in declaratory judgment actions seeking a
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declaration of coverage when the insurer’s duty, if any, rests solely on the applicability of the
insurance policy, the construction and effect of which is a matter of law.” Northland Cas. Co. v.
HBE Corp., 160 F. Supp. 2d 1348, 1358 (M.D. Fla. 2001); see also Gas Kwick, Inc. v. United Pac.
Ins. Co., 58 F.3d 1536, 1538–39 (11th Cir. 1995) (“Under Florida law, interpretation of an
insurance contract is a matter of law to be decided by the court.”). “[T]he Florida Supreme Court
has made clear that the language of the policy is the most important factor.” James River Ins. Co.
v. Ground Down Eng’g, Inc., 540 F.3d 1270, 1274 (11th Cir. 2008) (quotation omitted).
Additionally, “insurance contracts are construed according to their plain meaning.” Id. at 1274
(quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005)). “[I]f a
policy provision is clear and unambiguous, it should be enforced according to its terms whether it
is a basic policy provision or an exclusionary provision.” Taurus Holdings, Inc., 913 So. 2d at 532
(quotation omitted).
Where the “relevant policy language is susceptible to more than one reasonable
interpretation, one providing coverage and the [other] limiting coverage, the insurance policy is
considered ambiguous.” Westport Ins. Corp. v. VN Hotel Grp., LLC, No. 6:10-cv-222-Orl-28KRS,
2011 WL 4804896, at *2 (M.D. Fla. Oct. 11, 2011) (quoting Auto-Owners Ins. Co. v. Anderson,
756 So. 2d 29, 34 (Fla. 2000)), aff’d, 513 F. App’x 927 (11th Cir. 2013). In order for an insurance
contract to be found ambiguous, “[t]here must be a genuine inconsistency, uncertainty, or
ambiguity in meaning that remains after resort to the ordinary rules of construction.” Valiant Ins.
Co. v. Evonosky, 864 F. Supp. 1189, 1191 (11th Cir. 1994) (quotation omitted). “[A] court may
not rewrite the policy or add meaning to create an ambiguity.” Id. Additionally, the mere fact that
policy language requires interpretation does not render the language ambiguous. Id. “Ambiguous
policy provisions are interpreted liberally in favor of the insured and strictly against the drafter
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who prepared the policy.” Westport Ins. Corp., 2011 WL 4804896, at *2 (quoting Auto-Owners
Ins. Co., 756 So. 2d at 34). Moreover, “[e]xclusionary clauses are construed even more strictly
against the insurer than coverage clauses,” and the insurer has the burden of demonstrating that an
exclusion in a policy applies. Id. (quotation omitted).
Interpreting the Insurance Policies at Issue
As noted, all of the insurance policies either have, or incorporate by reference, a related
claims provision. The issue of coverage here turns on the application of these related claims
provisions. While the language of some of the related claims provisions differ slightly, they all
operate in the same manner: they all treat related claims as though they were a single claim made
on the date of the earliest claim. The specific language of the provisions are as follows.
The 1997 Executive Risk D&O Policy, 2004 Executive Risk D&O Policy, and 2006
Executive Risk D&O Policy each provide: “All Claims based on, arising out of, directly or
indirectly resulting from, in consequence of, or in any way involving the same or related facts,
circumstances, situations, transactions or events or the same or related series of facts,
circumstances, situations, transactions or events shall be deemed to be a single Claim made at the
time the earliest such Claim is made.” (Doc. 41-2 at 29–30; Doc. 49-3 at 49; Doc. 49-4 at 9). The
policies continue by stating that “[a] Claim shall be deemed made when the Underwriter is notified
[pursuant to the notification conditions of the policy] or when such Claim is first made or asserted
against an Insured, whichever occurs first.” (Doc. 41-2 at 30; Doc. 49-3 at 49; Doc 49-4 at 9).
The 1998 Executive Risk E&O Policy, 2004 Executive Risk E&O Policy, 2006 Capitol
E&O Policy, 2012 Darwin Select E&O Policy, and 2012 Darwin National D&O Policy define
related claims as “all Claims for Wrongful Acts based on, arising out of, directly or indirectly
resulting from, in consequence of, or in any way involving the same or related facts, circumstances,
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situations, transactions, or events or the same or related series of facts, circumstances, situations,
transactions, or events whether related logically, causally, or in any other way,” (Doc. 41-1 at 17;
Doc. 49-2 at 8; accord Doc. 50-2 at 14; 50-3 at 64; Doc. 50-4 at 39). Based on that definition, the
policies further state:
All Related Claims, whenever made, shall be deemed to be a single Claim and shall
be deemed to have been first made on the earliest of . . . (1) the date on which the
earliest Claim within such Related Claims was received by an Insured; or (2) the
date on which written notice was first given to the Underwriter of a Wrongful Act
which subsequently gave rise to any of the Related Claims, regardless of the
number and identity of claimants, the number and identity of Insureds involved, or
the number and timing of the Related Claims, even if the Related Claims
comprising such single Claim were made in more than one Policy Period.
(Doc. 49-2 at 14–15; Doc. 50-2 at 7–8; Doc. 50-4 at 32; accord Doc. 41-1 at 22; see also Doc. 503 at 72 (stating in the 2012 Darwin National D&O Policy that “[a]ll Related Claims will be treated
as a single Claim made when the earliest of such Related Claims was first made, or when the
earliest of such Related Claims is treated as having been made in accordance with [the notification
conditions of the policy], whichever is earlier”).
Finally, the 2004 Capitol Excess E&O Policy provides coverage “in conformance with the
terms and conditions of, and endorsements to [the 2004 Executive Risk E&O Policy].” (Doc. 501 at 4). The 2004 Capitol Excess E&O Policy continues by stating that “[i]n no event will the
coverage under this Policy be broader than the coverage under any Underlying Insurance” and that
“[c]overage under this Policy will attach only after all Underlying Insurance has been exhausted
by the actual payment of loss by the Underlying Insurers.” (Id.).
Defendants argue that the claims for which Plaintiffs seek coverage are related to the claims
asserted in Wuestoff I and Wuesthoff II and are therefore deemed to be a single claim made under
the 1997 Executive Risk D&O Policy and the 1998 Executive Risk E&O Policy. Accordingly,
coverage would be available for Plaintiffs’ claims, if at all, under the 1997 and 1998 policies issued
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by Executive Risk. Defendants further argue that because coverage has been exhausted under both
the 1997 Executive Risk D&O Policy & 1998 Executive Risk E&O Policy, there is no coverage
for Plaintiffs’ claims.
As an initial matter, courts have frequently upheld Defendants’ interpretation of the related
claims provision—i.e., that a claim may relate back to a claim made at an earlier time, whether the
previous claim was made under a prior policy or at a time when no policy was in effect—and
enforced related claims provisions accordingly. See, e.g., Direct Gen. Ins. Co. v. Houston Cas.
Co., 139 F. Supp. 3d 1306, 1314 (S.D. Fla. 2015) (analyzing a claims-made insurance policy with
a similar related claims clause and explaining that “when a claim is made within the Policy period,
a Related Claim made after the Policy period would still be deemed covered under the Policy
because both Claims are deemed one Claim made on the earlier, within-Policy-period date”), aff’d
sub nom. Direct Gen. Ins. Co. v. Indian Harbor Ins. Co., 661 F. App’x 980 (11th Cir. 2016) (per
curiam); Cont’l Cas. Co. v. Wendt, 205 F.3d 1258, 1260, 1263 (11th Cir. 2000) (per curiam)
(holding that a provision dealing with related wrongful acts, which is similar to the related claims
provisions at issue here, was unambiguous and that multiple claims were related pursuant to the
policy); Rsui Indem. Co. v. Atty’s Title Ins. Fund, Inc., No. 2:13-cv-670-FtM-38CM, 2016 WL
7042960, at *4 (M.D. Fla. June 6, 2016) (holding that the plain language of a policy with a nearly
identical related claims clause was “clear and unambiguous”); Fed. Ins. Co. v. Surujon, No. 0722819-CIV, 2008 WL 2949438, at *5 (S.D. Fla. July 29, 2008) (holding that claims were related
under a policy’s related claims provision where the provision had nearly identical language as the
related claims provisions here); Gidney v. Axis Surplus Ins. Co., 140 So. 3d 609, 613–16 (Fla. 3d
DCA 2014) (holding that, pursuant to a provision similar to the related claims provision here, a
Page 15 of 31
claim related back to a previous claim and discussing relevant cases that had interpreted related
claims provisions).
Here, however, Plaintiffs argue that the prior/pending litigation clause in each policy limits
the claims that can be related under the related claims provision and renders the policies
ambiguous. Specifically, Plaintiffs argue that due to the interplay between the prior/pending
litigation clause and the related claims provision, only claims made during and after a given
policy’s inception date, and not before, may be deemed related.
At first glance, this argument does not appear to advance Plaintiffs’ case because the claims
at issue here were filed after the inception dates of the 1997 and 1998 policies. Nevertheless,
Plaintiffs arbitrarily ignore the 1997 and 1998 policies, focusing instead on the inception dates of
the subsequent policies. Plaintiffs cite the prior/pending litigation exclusion in an attempt to justify
the use of the later dates and disregard for the 1997 and 1998 policies. Plaintiffs highlight that
pursuant to the exclusion, claims that have a connection to claims that were litigated prior to that
particular policy’s inception are excluded from coverage under that particular policy. According
to Plaintiffs, because these claims are completely excluded from coverage, it follows that these
claims cannot be deemed related to the claims that were previously litigated. Plaintiffs essentially
argue that because, absent endorsement, all claims bearing a connection to Wuesthoff I and
Wuesthoff II are excluded from coverage under subsequently issued policies via the prior/pending
litigation clause, such claims cannot be related to Wuesthoff I and Wuesthoff II under the related
claims provision. This argument is a confusing leap in logic and devoid of support.
Plaintiffs’ argument is not supported by the language of the policies. The plain language
of the prior/pending litigation exclusions has no impact on the related claims provisions. See Rsui
Indem. Co., 2016 WL 7042960, at *5 (noting that a prior and pending litigation exclusion and a
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related claim provision have two distinct purposes, and therefore, “a claim . . . could escape the
Prior and Pending Litigation Exclusion yet fall within the Related Claims Condition”). Further,
Plaintiffs’ interpretation would nullify the plain language of the related claims provision, which is
not permitted under Florida law. See Westport Ins. Corp., 2011 WL 4804896, at *2 (“[I]n
construing insurance policies, courts should read each policy as a whole, endeavoring to give every
provision its full meaning and operative effect.” (quoting Auto-Owners Ins. Co., 756 So. 2d at 34)).
The 1997 Executive Risk D&O Policy, 2004 Executive Risk D&O Policy, and 2006
Executive Risk D&O Policy state that “[a]ll Claims” that are related “shall be deemed to be a
single Claim made at the time the earliest such Claim is made.” (Doc. 41-2 at 29–30; Doc. 49-3 at
49; Doc. 49-4 at 9 (emphasis added); see also Doc. 50-3 at 72 (providing that “[a]ll related claims
will be treated as a single claim” (emphasis added))). Similarly, the 1998 Executive Risk E&O
Policy, 2004 Executive Risk E&O Policy—and thus the 2004 Capitol Excess E&O Policy—2006
Capitol E&O Policy, 2012 Darwin Select E&O Policy, and the 2012 Darwin National D&O Policy
state that “[a]ll related claims, whenever made, shall be deemed to be a single Claim.” (Doc. 49-2
at 14; Doc. 50-2 at 7; Doc. 50-4 at 32; accord Doc. 41-1 at 22). To read Plaintiffs’ proposed
temporal restriction into the related claims provision, which is clearly absent from the policy
language, is impermissible under Florida law. See Taurus Holdings, Inc., 913 So. 2d at 532
(“[C]ourts may not rewrite contracts, add meaning that is not present, or otherwise reach results
contrary to the intentions of the parties.” (quotation omitted)). Based on the language of the
relevant policies, there is no reason why a claim made at a later date could not be related to a claim
made in 1997 or 1998. Indeed, so long as the claim qualifies as a related claim under the policy,
the contract explicitly directs that the subsequent claim be deemed made when the earliest of the
related claims was made. In this case, assuming the claims are related, the earliest of the related
Page 17 of 31
claims were made under the 1997 and 1998 Executive Risk policies and before any Allied World
policy was issued.
Plaintiffs make similar arguments regarding a few prior/pending litigation clauses where
the dates referenced by those clauses are different than the inception date of the insurance policy.
Several of the prior/pending litigation clauses were amended to exclude litigation that had been
initiated as of a specified date, rather than the inception date of the policy. Plaintiffs also point to
the prior/pending litigation clause in a renewal policy where the relevant date for purposes of the
exclusion was the inception date of the policy that was renewed. These dates, however, have no
impact on the related claims provision. First, as discussed, whether a claim is excluded under the
prior/pending litigation provision is irrelevant to the determination of whether claims are related.
See Rsui Indem. Co., 2016 WL 7042960, at *4 (rejecting nearly identical arguments as those made
by Plaintiffs here with regards to the endorsed prior/pending litigation exclusions and their impact
on the related claims provisions); see also Indian Harbor Ins. Co., 661 F. App’x at 985 (adopting
a position consistent with the views expressed in Rsui and rejecting the insurer’s argument that the
related claims provision was ambiguous because it was inconsistent with the endorsed pending
and prior litigation exclusion). Moreover, “exclusionary clauses cannot be relied upon to create
coverage.” Rsui Indem. Co., 2016 WL 7042960, at *5 (quoting U.S. Fire Ins. Co. v. J.S.U.B., Inc.,
979 So. 2d 871, 877 (Fla. 2007)). Thus, it follows that “adding a strict temporal limitation to an
exclusion’s applicability,” as the endorsements do here, “does not, and cannot, create coverage.”
Id. Furthermore, the policy language, including the related claims provision and the prior/pending
litigation exclusions, as endorsed, are clear and unambiguous. See id. at *4.
Plaintiffs’ argument with respect to the amended prior/pending litigation exclusions and
Plaintiffs’ disregard for the related claims provision is especially problematic given that every
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endorsed prior/pending litigation clause states that “[a]ll other terms, conditions and limitations of
this Policy shall remain unchanged.” (Doc. 49-3 at 38; Doc. 49-2 at 32; 49-4 at 18; Doc. 50-2 at
27; Doc. 50-3 at 9). This demonstrates that the related claims provision in each policy is unaffected
by the respective endorsement and still applies. See Rsui Indem. Co., 2016 WL 7042960, at *5
(noting that despite amending the prior and pending litigation exclusion via endorsement, the
endorsement stated that “[a]ll other terms and conditions of this policy remain unchanged,” and
thus, the related claims clause was still “a condition that must be satisfied for coverage”).
Plaintiffs further maintain that certain policies provide coverage for the claims at issue here
because they provide coverage for antitrust claims. Plaintiffs rely on Endorsement 25, the Specific
Entity Antitrust Claim Endorsement, of the 2006 Executive Risk D&O Policy (“Endorsement 25”)
and Endorsement 4 of the 2012 Darwin National D&O Policy (“Endorsement 4”). Endorsement
25 provides coverage for “Claims for Antitrust Activities . . . based upon, arising out of, directly
or indirectly resulting from, in consequence of or in any way involving Wuesthoff Health Systems,
Inc.” (Doc. 49-4 at 59). Endorsement 4 states that “in connection with Claims arising out of
Antitrust Activity . . . [t]he obligation of the Insurer to pay Loss in connection with Antitrust
Claims will only be in excess of $500,000 (hereinafter ‘Antitrust Retention’).” (Doc. 50-3 at 10).
The Court also finds this argument unavailing. Endorsement 25 and Endorsement 4 also
state that “[a]ll other terms, conditions and limitations of this Policy shall remain unchanged.”
(Doc. 49-4 at 60; Doc. 50-3 at 10). Thus, the related claims provision still applies and potentially
eliminates the insurers’ obligation to provide coverage under either of the policies. Furthermore,
like the prior/pending litigation exclusions, Endorsement 25 and Endorsement 4, when considered
beside the related claims provision, do not give rise to any inconsistency or conflict so as to deem
the policies ambiguous. Endorsement 25 begins by stating that coverage is available “[t]o the
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extent that Loss resulting from a . . . Antitrust Claim [involving Wuesthoff Health Systems, Inc.]
is covered under Insuring Agreement (B) or (C).” (Doc. 49-4 at 59). Pursuant to the related claims
provision, Insuring Agreements (B) and (C) of the 2006 Executive Risk D&O Policy do not
provide coverage for antitrust claims involving Wuesthoff if such claims are related to claims
previously submitted for coverage under a prior policy. Endorsement 4 is completely inapposite
to the related claims provision. Additionally, it does not demonstrate that the 2012 Darwin
National D&O Policy provides absolute coverage for all antitrust claims as Plaintiffs seem to
suggest. Rather, it appears that Endorsement 4, entitled “Antitrust Retention,” was designed to
amend the retention rate for antitrust claims. (Compare Doc. 50-3 at 2, with id. at 10).
Relatedness
Having rejected Plaintiffs’ interpretation of the insurance policies and determining that the
claims at issue here can relate back to claims made under the 1997 Executive Risk D&O Policy
and the 1998 Executive Risk E&O Policy, the Court must now determine whether Wuesthoff III,
Wuesthoff IV, Hynes, and Omni are in fact related to Wuesthoff I or Wuesthoff II.
Defendants argue that the claims are related due to the substantial similarity and common
factual predicates asserted in the underlying complaints. Plaintiffs attempt to defeat Defendants’
relatedness argument by arguing that the Court cannot properly determine whether the claims are
related solely by looking to the underlying complaints. Plaintiffs contend that the related claims
provision requires that the claims involve the “same or related facts, circumstances, situations,
transactions, or events,” not the same or related allegations. Thus, Plaintiffs contend that
Defendants have not sufficiently shown that the claims are in fact related. In the alternative,
Plaintiffs argue that the claims are not sufficiently related as each complaint is based on distinct
factual allegations and circumstances.
Page 20 of 31
As to Plaintiffs’ argument that it would be improper for the Court to rely upon the
underlying complaints in determining whether the claims are related, the Court disagrees. Courts
do not require a showing of the actual facts to determine whether multiple claims are related.
Rather, courts often focus on and compare the underlying allegations to determine if multiple
claims are related under an insurance policy’s related claims provision. See Vozzcom, Inc. v. Great
Am. Ins. Co. of N.Y., 374 F. App’x 906, 908 (11th Cir. 2010) (noting that all three complaints
allege similar facts and violations and therefore all three suits were to be considered a single claim
under the policy’s related claims provision); Wendt, 205 F.3d at 1263–64 (comparing the
allegations in two complaints against the insured and finding that the conduct at issue in both cases
was related so that the policy’s related claims provision applied); Gidney, 140 So. 3d at 615
(highlighting the allegations underlying the two claims and concluding that the claims were related
pursuant to the policy’s related claims provision); see also Capital Growth Fin. LLC v. Quanta
Specialty Lines Ins. Co., No. 07-080908-CIV, 2008 WL 2949492, at *5 (S.D. Fla. 2008) (applying
New York law and examining the allegations asserted in multiple arbitration claims to conclude
that the wrongful acts were related and thus considered a single claim pursuant to the policy’s
related claim clause). Furthermore, Plaintiffs’ argument that it would be improper to solely look
to the allegations in the complaints because Plaintiffs are seeking indemnity, rather than a
declaration that Defendants owe a duty to defend, which, unlike the duty to indemnify, is
determined by relying solely upon the allegations of the underlying complaints, misses the mark.
The narrow issue before the Court that Plaintiffs raise is not what materials the Court can look to
in determining whether Defendants have an obligation to provide defense costs, but rather, what
materials or information the Court can rely upon in determining whether the claims are related.
Page 21 of 31
For the reasons stated above, looking to the underlying complaints to determine whether the
various claims are related is proper.
At the outset the Court notes that it need only find that the claims alleged in each
complaint—Wuesthoff III, Wuesthoff IV, Hynes, and Omni are related to either the claims alleged
in Wuesthoff I or the claims alleged in Wuesthoff II for the claim to be deemed a related claim and
that, therefore, coverage is provided under the 1997 Executive Risk D&O Policy or the 1998
Executive Risk E&O Policy. Courts have found related claims provisions with nearly identical
language as the related claims provisions at issue here to be “very broad” and to require “only that
the claims indirectly arise out of related circumstances.” Houston Cas. Co., 139 F. Supp. 3d at
1315 (quotation omitted). In determining whether claims are related under an insurance policy, the
Eleventh Circuit has adopted the position that the claims need only have a logical or causal
connection. Wendt, 205 F.3d at 1263; see also Quanta Specialty Lines Ins. Co., 2008 WL 2949492,
at *4 (explaining that the relatedness inquiry “focuses simply on whether the claims are logically
linked by a ‘sufficient factual nexus’”). Indeed, for claims to be related there need not be “exact
factual overlap, or even identical legal causes of action.” Quanta Specialty Lines Ins. Co., 2008
WL 2949492, at *4. Factors that courts look to in determining whether claims are related include
“whether the parties are the same, whether the claims all arise from the same transactions, whether
the ‘wrongful acts’ are contemporaneous, and whether there is a common scheme or plan
underlying the acts.” Id.
A review of the underlying complaints reveals that the claims asserted in Wuesthoff III and
IV as well as Hynes and Omni are related to both Wuesthoff I and II. The Wuesthoff suits involved
the same parties, the same geographic markets—South and Central Brevard County—and the same
alleged wrongful conduct. Indeed, whether brought under federal or state law, many of the causes
Page 22 of 31
of action brought in the Wuesthoff suits are identical, including claims for monopolization, attempt
to monopolize, illegal tying, conspiracy to restrain trade, and monopolization as to the Medicare
managed care market. 5 (Compare Doc. 41-3 at 9–15, and Wuesthoff II Third Am. Compl., Doc.
41-4, at 21–29, with Doc. 41-5 at 23–30, and Wuesthoff IV First Am. Compl., Doc. 41-6, at 10–
48). 6 See Quanta Specialty Lines Ins. Co., 2009 WL 2949492, at *2 (finding that claims asserted
in several arbitrations were related pursuant to the insurance policy and that all of the arbitrations
“allege[d] nearly identical causes of action”). Hynes and Omni also brought similar causes of
action as Wuesthoff I and II. (See Doc. 41-7 at 18–71; Doc. 45-3 at 65–97). Although Hynes and
Omni involved different plaintiffs than the Wuesthoff suits, the actions involved the same
defendants as the Wuesthoff suits, with the addition of Health First Physicians, Inc. and two prior
presidents of Health First entities. Moreover, that different claimants brought suit is not dispositive
in a related claims analysis. See Houston Cas. Co., 139 F. Supp. 3d at 1309–10, 1316, 1319
(finding that thousands of individual complaints from various individuals as well as a law office
and two class actions filed by classes of Florida health care providers and MRI providers were all
related claims pursuant to the policy’s related claims provision); Quanta Specialty Lines Ins. Co.,
2008 WL 2949492, at *2, 5 (holding that claims asserted by different investors in numerous
arbitrations proceedings were related).
5
The claims here represent counts that are alleged in Wuesthoff III and IV and either
(although sometimes both) Wuesthoff I and II.
6
The Court does not find Executive Risk’s reliance on the third amended complaint filed
in Wuesthoff II improper. Moreover, in previous litigation, Health First acknowledged that all three
complaints filed in Wuesthoff II alleged the same violations as Wuesthoff I. (Health First’s Mot.
for Summ. J. in Wuesthoff II, Doc. 41-11, at 7). Similarly, because the original complaint and the
third amended complaint in the Omni action are substantially similar, the Court refers to the third
amended complaint.
Page 23 of 31
The complaints in the Wuesthoff, Hynes, and Omni actions all request damages and
injunctive relief as a result of Health First’s anticompetitive and monopolistic behaviors.
Additionally, all actions assert the same general allegations—that Health First is a monopolist that
used its market dominance to foreclose competition and unreasonably restrain trade through
exclusionary devices and practices—resulting in loss of business to the plaintiffs; diminished to
non-existent competition in the health care industry in the South and Central Brevard County; and
harm to consumers due to the resulting lack of health care alternatives, poor quality of health care,
and increased prices.
More importantly, the complaints assert identical allegations throughout. And where the
allegations are not identical, many are substantially similar. Wuesthoff I, III, IV, Hynes, and Omni
alleged that Health First coerced physicians to refer their patients to Health First-operated facilities
by offering benefits to those who kept patients within the Health First system and by threatening
those who failed to comply. (Doc. 41-3 ¶¶ 8, 25, 27; Doc. 41-5 ¶¶ 7, 47, 56, 68–71, 102–03; Doc.
41-6 ¶¶ 12–14, 26, 48, 53, 57, 113, 152; Doc. 41-7 ¶¶ 4, 33, 85, 131, 192, 209, 242, 249–50, 291;
Doc. 45-3 ¶¶ 2, 7, 134, 136, 138, 159, 265, 293; see Doc. 41-5 ¶ 33; Doc. 41-6 ¶¶ 56, 58, 62, 115;
Doc. 41-7 ¶¶ 88, 90, 92–95, 212, 230, 247–48, 251; see also Doc. 45-3 ¶¶ 206, 208, 212–13, 269).
Plaintiffs argue that the Omni complaint focuses on Health First’s 2013 acquisition of Melbourne
Internal Medicine Associates (“MIMA”), which was not mentioned in Wuesthoff I or II. However,
many of the allegations surrounding MIMA involve the same or related facts as Wuesthoff I,
including that Health First utilized coercive methods, such as providing benefits to MIMA
physicians and physician practice groups if they admitted a majority of patients to Health first
hospitals. (Compare Doc. 41-3 ¶ 8, with Doc. 45-3 ¶¶ 125, 265). In addition to physician coercion,
the Wuesthoff I, Hynes, and Omni complaints all alleged that Health First threatened to bring in
Page 24 of 31
new physicians to compete with those that refused to cooperate with its exclusive referral demands.
(Doc. 41-3 ¶ 8; Doc. 41-7 ¶¶ 89, 246; Doc. 45-3 ¶ 205).
The complaints in Wuesthoff II, III, IV, Hynes, and Omni all alleged that Health First
“bundled” their services. According to the plaintiffs, Holmes Regional, a “must have” hospital in
South Brevard County, would not negotiate hospital contracts with managed care plans unless
Cape Canaveral and Palm Bay were also included in the network. (Doc. 41-4 ¶¶ 28–29, 38, 39, 43,
72; Doc. 41-5 ¶¶ 31, 43, 52, 96–98; Doc. 41-6 ¶¶ 11, 49–50, 104, 107–08; Doc. 45-3 ¶ 119; see
Doc. 41-4 ¶ 41; Doc. 41-6 ¶¶ 70–71, 97; Doc. 41-7 ¶¶ 59, 70, 81, 238). Additionally, all of the
Wuesthoff II, III, and IV, Hynes, and Omni plaintiffs asserted that Health First engaged in unlawful
price fixing as to managed care plans and, with the exception of Wuesthoff I, that Health First
provided preferable pricing to HFHP. (Doc. 41-4 ¶¶ 34, 38, 43, 67; Doc. 41-5 ¶¶ 31, 34, 43, 49,
54–55; Doc. 41-6 ¶¶ 12, 45; Doc. 41-7 ¶ 74; Doc. 45-3 ¶ 119).
The plaintiffs in Wuesthoff II, IV, and Omni all alleged that HFHP refused to enter managed
care contracts with them. (Doc. 41-4 ¶¶ 25, 38, 43; Doc. 41-6 ¶ 48; Doc. 45-3 ¶ 279). Additionally,
the plaintiffs in Wusthoff III, IV, and Hynes alleged that individuals enrolled in HFHP were steered
to Health First Hospitals. (Doc. 41-5 ¶ 36; Doc. 41-6 ¶ 47; Doc. 41-7 ¶ 77). While this was not
alleged in Wuesthoff I or II, it is a claim which clearly could have resulted—either directly or
indirectly—from Health First’s preferential pricing practices and exclusive contracting efforts,
which were asserted in Wuesthoff I and II.
Another common allegation appears in Wuesthoff II, III, IV, and Hynes. In those cases, it
was alleged that when Wuesthoff decided to build a new hospital in South Brevard County, Health
First used the Florida Certificate of Need process to delay and increase the costs for Wuesthoff.
Page 25 of 31
(Doc. 41-4 ¶ 36; Doc. 41-5 ¶ 57; Doc. 41-6 ¶¶ 101, 153; Doc. 41-7 ¶¶ 51, 83, 118, 236, 274; see
Doc. 41-7 ¶¶ 193, 292).
Thus, a review of the complaints, which contained very similar, if not identical, allegations
in support of the plaintiffs’ broader claims that Health First was engaging in unlawful
anticompetitive and monopolistic behaviors, leads to the conclusion that the claims in Wuesthoff I
and II and the claims in Wuesthoff III, IV, Hynes, and Omni were “based on, ar[ose] out of, directly
or indirectly result[ed] from, in consequence of, or in any way involve[ed] the same or related
facts, circumstances, situations, transactions or events or the same or related series of facts,
circumstances, situations, transactions or events.” (Doc. 49-3 at 49; Doc. 49-4 at 9; Doc. 50-3 at
64; accord Doc. 49-2 at 8; Doc. 50-2 at 14; Doc. 50-4 at 39). Moreover, given the significant
similarities between the complaints, the allegations in the various lawsuits undoubtedly
demonstrate a common scheme and, therefore, are related. Each complaint avers that Plaintiffs
have intentionally indulged in wrongful antitrust and monopolizing conduct with the overarching
goal of furthering their own success, dominating the South and Central Brevard County healthcare
markets, eliminating competition, and establishing a monopoly in the healthcare service industry—
from physician and hospital services to the Medicare managed care market—ultimately resulting
in higher prices, fewer health care alternatives, and injury to consumers. See Wendt, 205 F.3d at
1264 (finding that two lawsuits were related under a related claims provision and explaining that
although the alleged conduct in the two different lawsuits “involved different types of acts, these
acts were tied together because all were aimed at a single particular goal”).
The minor distinctions asserted by Plaintiffs are insufficient to persuade this Court that the
claims are not related as a matter of law. Moreover, despite Plaintiffs’ argument that Wuesthoff III
was based on grievances that could not have possibly been raised in the prior Wuesthoff litigation,
Page 26 of 31
as demonstrated above, many of the same grievances were in fact raised in Wuesthoff I, II, and III,
even if such grievances involved slightly different contextual backgrounds given the ongoing
developments in the health care industry in Brevard County between 1998 and 2007. The related
claims provision deems claims related when the claims “in any way involv[e] the same or related
facts, circumstances, situations, transactions or events or the same or related series of facts,
circumstances, situations, transactions or events.” (Doc. 41-2 at 29–30; Doc. 49-3 at 49; Doc. 494 at 9; see Doc. 41-1 at 17; Doc. 49-2 at 8; Doc. 50-2 at 14; Doc. 50-3 at 64; Doc. 50-4 at 39
(emphasis added)). That standard is certainly met here.
For purposes of determining whether Wuesthoff III is related to Wuesthoff I and II, the
Court finds the position taken by Plaintiffs 7 in the Wuesthoff III litigation particularly enlightening.
In that case, Plaintiffs filed two summary judgment motions, arguing that Wuesthoff I, II, and III
all raised the same “essential claims.” (Wuesthoff III Mot. for Summ. J., Doc. 41-11, at 7). Plaintiffs
posited in Wuesthoff III that the complaint merely “realleg[ed] claims based on the same factual
predicate that Wuesthoff alleged in the prior state and federal actions,” referring to Wuesthoff I and
II. (Id. at 9; Wuesthoff III Second Mot. for Summ. J., Doc. 41-9, at 9; see also Doc. 41-11 at 6–10;
Doc. 41-9 at 6–10). Plaintiffs even contended that several of the counts alleged in Wuesthoff III
“relate[d] directly to facts, transactions, and circumstances . . . that were or could have been
alleged in Wuesthoff’s prior lawsuits.” (Doc. 41-9 at 10). Thus, that Wuesthoff III is related to
Wuesthoff I and II is supported not only by the Court’s review of the underlying complaints and
independent analysis, but also by the position previously taken by Plaintiffs in litigation. See
Houston Cas. Co., 139 F. Supp. 3d at 1315–16 (finding claims related under an insurance policy
7
This excludes Health First Health Insurance, Inc. as they were not a party to Wuesthoff I,
II, or III.
Page 27 of 31
and noting that this finding was “consistent with [the p]laintiff’s own characterization,” where the
plaintiff had previously asserted that the claims were related).
Because the claims for which Plaintiffs’ seek coverage are related to Wuesthoff I and II,
the claims are deemed to be made under the 1997 Executive Risk D&O Policy and the 1998
Executive Risk E&O Policy. Furthermore, because coverage has been exhausted under those
policies, it follows that there is no coverage for Plaintiffs’ claims arising out of Wuesthoff III, IV,
Hynes, and Omni. 8
To prevent the Court from finding that the claims are related, Plaintiffs also argue that
Defendants’ interpretation of the related claims provision is so broad that to find in favor of
Defendants would render coverage under the policies illusory. Plaintiffs further contend that the
Court should refuse to adopt such a broad interpretation of the related claims provision, “even if
supported by policy language” in order to avoid an absurd result—namely, a finding that there is
no coverage for Plaintiffs’ claims. (Doc. 49 at 23).
Under Florida law, “when limitations or exclusions completely contradict the insuring
provisions, insurance coverage becomes illusory.” Interline Brands, Inc. v. Chartis Specialty Ins.
Co., 749 F.3d 962, 966 (11th Cir. 2014) (quoting Purrelli v. State Farm Fire & Cas. Co., 698 So.
2d 618, 620 (Fla. 2d DCA 1997)). That is not the case here. As previously discussed, courts have
consistently held that related claims provisions with similar language are broad yet unambiguous
and that such provisions should be enforced according to their terms. See, e.g., Indian Harbor Ins.
Co., 661 F. App’x at 981, 985; Rsui Indem. Co., 2016 WL 7042960, at *3–5; see also Surujon,
8
Having determined that there is no coverage for the claims at issue pursuant to the
policies’ related claims provisions, this Court declines to address Allied World’s alternative
argument that there is no coverage for the Omni suit pursuant to Exclusion III(C)(3)(2) of the 2012
Darwin National D&O Policy and Plaintiffs’ response.
Page 28 of 31
2008 WL 2949438, at *5 (finding that claims were related under a broad related claims provision).
The related claims provision does not completely contradict the insuring provisions but establishes
a condition that must be satisfied—that is, a claim may not be related to another claim made under
a previous policy or prior to the inception of a policy—in order for the subsequently issued policy
to provide coverage. Rsui Indem. Co., 2016 WL 7042960, at *5 (explaining that the related claims
provision “is not an exclusion; it is a condition that must be satisfied for coverage”). The Court’s
interpretation of the related claims provision does not nullify coverage for all antitrust or
monopolization claims, as Plaintiffs contend. It merely serves to group all antitrust or
monopolization claims that are related together so that coverage is provided under a single
policy—the policy in place when the earliest of the related claims was made. And despite
Plaintiffs’ suggestion otherwise, this Court has not found that the claims at issue are related simply
because they involve “monopolistic” activity in the “health services” market in “Brevard County.”
(Doc. 49 at 22). Rather, as explained at length above, the claims are related because they all involve
similar, and at times, identical allegations, which are not bare assertions but are alleged with a
level of specificity.
Because the Court has found no ambiguity or conflict in the policy language, this Court
denies Plaintiffs’ request that the Court overlook the policy language to avoid a purportedly absurd
result. It is a fundamental and well-established principle in Florida insurance law that in
circumstances such as this, where the language is unambiguous and the provisions are not in
conflict, the plain language of the policy governs. See Taurus Holdings, Inc., 913 So. 2d at 532.
For this same reason the Court rejects Plaintiffs’ argument that summary judgment is improper at
this time. Plaintiffs contend that additional discovery is necessary to allow them to collect extrinsic
evidence that will evince the parties’ intentions as to the meaning of the policies at issue. But it is
Page 29 of 31
only appropriate to examine such extrinsic evidence if there is an ambiguous contract term. See
Office Depot, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 734 F. Supp. 2d 1304, 1315 (S.D.
Fla. 2010) (“If the relevant policy language is clear and unambiguous, the court must infer the
parties’ intent from its plain language, not from extrinsic evidence. . . . Similarly, the ‘reasonable
expectations’ of the insured are not properly considered in the interpretation of clear and
unambiguous policy language.” (citations omitted)), aff’d, 453 F. App’x 871 (11th Cir. 2011); see
also Lawyers Title Ins. Corp. v. JDC (Am.) Corp., 52 F.3d 1575, 1580 (11th Cir. 1995) (“Questions
of fact arise only when an ambiguous contract term forces the court to turn to extrinsic evidence
of the parties’ intent, such as precontract negotiations, to interpret the disputed term.”).
Accordingly, the Defendants’ summary judgment motions are not premature. For the reasons
stated above, Defendant Executive Risk’s Motion for Summary Judgment and Defendant Allied
World’s Motion for Summary Judgment will be granted.
V.
CONCLUSION
Therefore, it is ORDERED and ADJUDGED as follows:
1. Plaintiffs’ Motion to Strike (Doc. 54) is DENIED.
2. Defendant Executive Risk’s Motion for Summary Judgment (Doc. 41) is
GRANTED.
3. Defendant Allied Word’s Motion for Summary Judgment (Doc. 45) is GRANTED.
4. All other pending motions are DENIED as moot.
5. The status conference set for February 16, 2016, is CANCELLED.
6. The Clerk is directed to enter a judgment in favor of Defendants and against
Plaintiffs. Thereafter, the Clerk shall close this case.
Page 30 of 31
DONE and ORDERED in Orlando, Florida on February 14, 2017.
Copies furnished to:
Counsel of Record
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