Colony Insurance Company v. Suncoast Medical Clinic, LLC et al

Filing 115

ORDER denying 110 Landmark's Motion for summary judgment; denying 111 Ziolkowski's Motion for summary judgment. Signed by Judge Virginia M. Hernandez Covington on 7/1/2011. (CAC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
COLONY INSURANCE CO.,
Plaintiff,
v.

Case No.: 8:09-cv-776-T-33TGW

SUNCOAST MEDICAL CLINIC, LLC,
ET AL.,
Defendants,
v.
LANDMARK AMERICAN INSURANCE
COMPANY,
Third-Party Defendant.
__________________________________/
ORDER
This matter comes before the Court pursuant to ThirdParty Defendant Landmark American Insurance Company’s Motion
for Final Summary Judgment (Doc. # 110), filed on March 28,
2011,

and

Defendant/Third-Party

Plaintiff

Colleen

A.

Ziolkowski’s Motion for Summary Judgment (Doc. # 111), also
filed on March 28, 2011. For the reasons that follow, the
motions are denied.
I.

Background and Procedural History
This case arises from a wrongful death and medical

malpractice action initiated by Colleen Ziolkowski against
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Suncoast, George E. Ettel, M.D., and Ignacio A. Sotolongo,
M.D., on or about August 22, 2008 (Doc. # 40 Exh. 2) (the
“Underlying

Lawsuit”).

While

under

the

care

of

Suncoast

physicians Ettel and Sotolongo, Charles J. Ziolkowski died
from liver cancer on or about October 18, 2006. On June 8,
2007,

Ziolkowski

served

a

Notice

of

Intent

to

Initiate

Litigation (NOI) to Suncoast, Ettel and Sotolongo, alleging,
among other things, that Defendants failed to recognize,
evaluate and document changes in her husband’s condition and
timely

order

and

perform

diagnostic

studies

and

interventions. More significantly for the purposes of the
motions at issue, Ziolkowski alleged “[f]ailure to have in
place

sufficient

policies

and

procedures,

staff,

and

assistive technology to ensure that diagnostic tests and
communication between physicians and other medical personnel
was performed.”
Plaintiff Colony insured Suncoast under a Commercial
General

Liability

Policy.

After

receiving

notice

of

Ziolkowski’s claim, Suncoast demanded that Colony defend and
indemnify Suncoast in the Underlying Lawsuit. Colony denied
it had a duty to do so, asserting that exclusions precluded

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coverage for bodily injury arising out of “the rendering or
failure to render medical, surgical, treatment, advice or
instruction”

in

connection

with

services

provided

by

healthcare providers.
Colony brought suit in this Court on April 24, 2009,
seeking a declaration that it owed no duty to defend or
indemnify Suncoast (Doc. # 1). Colony filed a Motion for
Summary Judgment (Doc. # 40) on December 28, 2009, which
this Court granted on July 20, 2010 (Doc. # 80). The Court
found that the claim against Suncoast in the Underlying
Lawsuit involved decisions regarding hiring medical staff,
purchasing diagnostic technology, and establishing policies
and

procedures

that

were

integral

to

the

provision

of

medical services and not ordinary business practices.
On February 16, 2010, Suncoast moved to join Landmark
as

a

third-party

defendant

(Doc.

#

53),

and

the

Court

granted the motion on March 3, 2010 (Doc. # 54). Landmark
insured Suncoast under Claims-Made Policy # LHM712725 for
the period of March 1, 2007, through March 1, 2008 (the
“2007-2008 Policy”), with limits of $500,000 per claim and
$1,500,000 in the aggregate. Landmark subsequently issued

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Claims-Made Policy # LHM716793 for the period of March 1,
2008

to

March

1,

2009

(the

“2008-2009

Policy”)

with

identical limits.
On

or

about

October

22,

2008,

Suncoast

informed

Landmark of Ziolkowski’s allegations of direct liability
against Suncoast for deficient policies and procedures in
addition

to

allegations

for

vicarious

liability

for

the

actions of Ettel and Sotolongo. Landmark denied indemnity
and defense of the lawsuit by letter dated December 5, 2008.
Landmark asserted that there was no coverage under the 20082009

Policy

during

the

because

Ziolkowski

2007-2008

policy

first

period.

asserted
On

March

her

claim

17,

2010,

Suncoast filed a crossclaim against Landmark for breach of
contract. (Doc. # 61).
On January 21, 2011, Suncoast assigned its rights and
interest to all actions or causes of action against Landmark
to Ziolkowski, who was substituted as a party in this action
(Doc.

##

106-107).

Ziolkowski

filed

her

second

amended

third-party complaint against Landmark on February 7, 2011
(Doc. # 108) alleging breach of contract for refusing to
indemnify Suncoast (Count I). Ziolkowski further seeks a

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declaratory judgment that Landmark has a duty to indemnify
Suncoast (Count II).
Landmark filed its Motion for Final Summary Judgment
(Doc. # 110) on March 28, 2011, and Ziolkowski filed her
response on April 11, 2011 (Doc. # 114). Ziolkowski filed
her Motion for Summary Judgment (Doc. # 111) on March 28,
2011, and Landmark filed its response on April 11, 2011
(Doc. # 113). The cross motions for summary judgment are
ripe for the Court's review.
II.

Legal Standard
Summary

judgment

is

appropriate

“if

the

pleadings,

depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c). A factual dispute alone is not enough
to defeat a properly pled motion for summary judgment; only
the

existence

of

a

genuine

issue

of

material

fact

will

preclude a grant of summary judgment. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247-48 (1986).

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An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742
(11th Cir. 1996)(citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material
if it may affect the outcome of the suit under the governing
law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th
Cir. 1997).
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. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d
1256, 1260 (11th Cir. 2004)(citing Celotex Corp. v. Catrett,
477

U.S.

317,

323

(1986)).

“When

a

moving

party

has

discharged its burden, the non-moving party must then ‘go
beyond the pleadings,’ and by its own

affidavits, or by

‘depositions, answers to interrogatories, and admissions on
file,’ designate specific facts showing that there is a
genuine issue for trial.” Jeffery v.
Inc., 64 F.3d 590, 593-94 (11th Cir.
477 U.S. at 324).

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Sarasota White Sox,
1995)(quoting Celotex,

If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to
be true and all reasonable inferences must be drawn in the
non-moving party’s favor. Shotz v. City of Plantation, Fla.,
344 F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact
finder evaluating the evidence could draw more than one
inference from the facts, and if that inference introduces a
genuine issue of material fact, the court should not grant
summary

judgment.

Samples

ex

rel.

Samples

v.

City

of

Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988)(citing Augusta
Iron & Steel Works, Inc. v. Emp’rs Ins. of Wausau, 835 F.2d
855,

856

explained

(11th

Cir.

that

in

1988)).
deciding

The

Eleventh

whether

an

Circuit

has

inference

is

reasonable, the court must
cull the universe of possible inferences from the
facts established by weighing each against the
abstract standard of reasonableness. (citation
omitted). The opposing party’s inferences need not
be more probable than those inferences in favor of
the movant to create a factual dispute, so long as
they reasonably may be drawn from the facts. When
more than one inference reasonably can be drawn,
it is for the trier of fact to determine the
proper one.
WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir. 1988).

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Summary judgment is appropriate in an action seeking a
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, 135758 (M.D. Fla. 2001). When the jurisdiction of the court is
based on diversity of citizenship and the policy was issued
in Florida, as is the case here, the district court must
look to the substantive law in Florida for guidance in
interpreting the policy. Lazzara Oil Co. v. Columbia Cas.
Co., 683 F. Supp. 777, 779 (N.D. Fla. 1988). Courts must
construe an insurance contract in its entirety, striving to
give every provision meaning and effect. Id. (citing DahlEimers v. Mut. of Omaha Life Ins. Co., 986 F.2d 1379, 1382
(11th Cir. 1993)). Furthermore, the Eleventh Circuit has
noted that
insurance contracts are to be construed in a
manner that is reasonable, practical, sensible,
and just . . . . Terms used in a policy are given
their plain and ordinary meaning and read in the
light of the skill and experience of ordinary
people. Provisions that exclude or limit liability
of an insurer are construed more strictly than
provisions that provide coverage.

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United States Fire Ins. Co. v. Freedom Village of Sun City
Ctr., 279 F. App’x 879, 880-881 (11th Cir. 2008)(internal
citations omitted).
III. Analysis
The Claims-Made Policy at issue in this case obligates
Landmark to pay damages and claim expenses for claims first
made against Suncoast during the policy period and reported
to Landmark no later than thirty days after the end of the
policy period. The Policy states in pertinent part:
Part III. Definitions
C. Claim means a written or verbal demand,
including any incident, occurrence or offense
which may reasonably be expected to result in
a claim, received by the Insured for money or
services, including service of suit or
institution of arbitration proceeding against
the Insured.
The Policy further includes the following language:
Part II. Exclusions
This policy does not apply to any Claim or Claim
Expenses based upon or arising out of:
Q. Any alleged act, error, omission, or
circumstance likely to give rise to a Claim
that an insured had knowledge of prior to the
effective date of this policy. This exclusion
includes, but is not limited to, any prior
Claim or possible Claim referenced in the
Insured’s application.

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In

that

context,

the

question

at

issue

is

the

precise

meaning of Ziolkowski’s allegation of “[f]ailure to have in
place

sufficient

policies

and

procedures,

staff,

and

assistive technology to ensure that diagnostic tests and
communication between physicians and other medical personnel
was performed,” included in the NOI Ziolkowski served on
Suncoast, Ettel and Sotolongo on June 8, 2007.
Landmark
written

asserts

notice

litigation
individual

and

that

the

that

Ziolkowski

seek

money

NOI

physicians

and

constituted

intended

damages

Suncoast.

to

against
(Doc.

#

formal,
initiate

both
110

at

the
8).

Because this alleged claim was made against Suncoast on June
8, 2007, it would be covered under the 2007-2008 Policy if
Suncoast had notified Landmark no later than April 1, 2008.
However, Landmark denied coverage because Suncoast did not
report the claim until October 22, 2008. Landmark argues
that the claim was not covered by the 2008-2009 Policy
because the claim was made during 2007.
Landmark

further

asserts

that

even

if

Ziolkowski’s

claim against Suncoast were covered by the 2008-2009 Policy
- the Policy in place when Suncoast reported the claim - it

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was expressly excluded pursuant to Part II.Q. (Id. at 11).
Landmark argues that Suncoast knew of the potential claim
prior to the effective date of the Policy, triggering the
exclusion. (Id. at 12).
Ziolkowski argues that the NOI did not provide Suncoast
with notice of any “incident, occurrence or offense” that
might reasonably be construed as a claim against it. The NOI
asserted several potential claims but did not specify which
provider

was

alleged

to

have

committed

any

particular

breach. (Doc. # 111 at 2). Furthermore, Suncoast had been
served with NOIs on several prior occasions, all of which
named Suncoast only because the claimant sought to hold the
clinic vicariously liable for the acts or omissions of the
physicians who provided services there; the Landmark policy
excluded claims of liability for the acts of physicians.
(Id.). Suncoast understood the Ziolkowski NOI to be similar,
and followed its usual procedures for handling such claims.1
(Id. at 5-7).
1

Suncoast Executive Director David Bailey stated that
his procedure was to send claims to legal counsel Troy Crotts
and/or insurance agent Andrew Wallace of Wallace Welch and
Willingham (WWW) for review. A matter was not considered a
claim until either Crotts or Wallace determined that it needed
to be reported to an insurance carrier. (Doc. # 111 at 6).
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Ziolkowski asserts that Suncoast did not learn of a
potential direct claim against it until a pre-suit mediation
held on May 23, 2008. (Id. at 7). Furthermore, Suncoast did
not

understand

that

a

claim

relating

to

policies

and

procedures existed and was meant to target it directly for
liability until October 2008. (Id. at 9). Thus, Ziolkowski
argues that the claim was covered by the 2008-2009 Policy
and duly reported as required on October 22, 2008.2
The Court determines that a genuine issue of material
fact exists as to whether the NOI reasonably constituted a
direct

claim

against

Suncoast,

and

whether

Suncoast

had

knowledge of Ziolkowski’s potential direct claim against it
when Ziolkowski served the NOI in 2007. It would invade the
province of the jury for this Court to decide whether or not
Suncoast acted reasonably in presuming that the Ziolkowski
NOI only reflected claims for vicarious liability that would

2

In her complaint against Landmark, Ziolkowski asserted
an alternative argument that notice of the NOI to Wallace
constituted sufficient notice to Landmark under the 2007-2008
policy because of an agency relationship between Landmark and
WWW. (Doc. # 108 at ¶ 20). In her motion for summary judgment,
however, Ziolkowski states that coverage under the 2007-2008
policy is not at issue for purposes of summary judgment
because “the issue of agency is factually disputed.” (Doc. #
111 at 2 n.1).
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not be covered under the Landmark policy. A reasonable juror
could determine that the NOI did not provide Suncoast with a
reasonable expectation of the potential claim against it.
Therefore, summary judgment is not appropriate.
Accordingly, it is now
ORDERED, ADJUDGED, and DECREED:
(1)

Landmark’s motion for summary judgment (Doc. # 110) is
DENIED.

(2)

Ziolkowski’s motion for summary judgment (Doc. # 111)
is DENIED.
DONE and ORDERED in Chambers in Tampa, Florida, this

1st day of July 2011.

Copies:
All Counsel and Parties of Record

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