HUDSON SPECIALTY INSURANCE COMPANY v. Columbus Regional Healthcare et al

Filing 42

ORDER granting 29 Motion for Summary Judgment; denying 30 Motion for Partial Summary Judgment. Ordered by Judge Clay D. Land on 12/21/2012. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
HUDSON SPECIALTY INSURANCE
COMPANY,

*
*

Plaintiff,
*
vs.

CASE NO. 4:11-CV-153 (CDL)
*

COLUMBUS REGIONAL HEALTHCARE
SYSTEM, INC. and THE MEDICAL
CENTER, INC.,

*
*

Defendants.
*
O R D E R
This action involves an insurance dispute between Plaintiff
Hudson

Specialty

Columbus
Center,

Insurance

Regional
Inc.

Company

Healthcare

(collectively,

(“Hudson”)

System,
“Columbus

Inc.

and

and

Defendants

The

Regional”).

Medical
Columbus

Regional was subjected to a claim by a patient of one of its
employee

physicians

alleging

that

Columbus

Regional

and

its

Medical Director were negligent in approving credentials for the
patient’s physician.

Hudson seeks a declaration that the claim

was not covered by the policy at issue, that Columbus Regional
failed to give proper notice, and that Hudson has already paid
the maximum amount for which it is liable for the claim under a
different policy.

Columbus Regional seeks a declaration that it

was the insured under a certain policy issued by Hudson, that
Columbus

Regional

gave

timely

notice

of

a

claim

under

that

policy, and that the claim was covered by the policy. Presently
pending before the Court are the parties’ cross motions for
summary judgment (ECF Nos. 29 & 30). For the reasons set forth
below,

the

Court

concludes

that

the

claim

against

Regional was not covered by the relevant policy.

Columbus

Therefore,

Hudson’s summary judgment motion (ECF No. 29) is granted, and
Columbus

Regional’s

summary

judgment

motion

(ECF

No.

30)

is

denied.
SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).

In determining whether a

genuine

Fed. R.

dispute of

material fact exists to defeat a motion for summary judgment,
the evidence is viewed in the light most favorable to the party
opposing summary judgment, drawing all justifiable inferences in
the opposing party=s favor.
U.S. 242, 255 (1986).

Anderson v. Liberty Lobby, Inc., 477

A fact is material if it is relevant or

necessary to the outcome of the suit.

Id. at 248.

A factual

dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.

2

Id.

FACTUAL BACKGROUND
I.

The Physician Policies
Hudson

issued

Partnership

Physician,

Professional

HCP4002089

to

Medical

Liability

“Columbus

Regional

Corporation,

Insurance

Healthcare

Medical

Policy

System

Employed

Physicians” for the period July 1, 2006 to July 1, 2007.
Ex.

A,

Physician,

Medical

Corporation,

Professional

Liability

Insurance

7/1/2006

7/1/2007,

ECF

to

Policy”).
July

Medical

Policy

No.

1-1

No.

at

3

No.

Compl.

Partnership

HCP4002089
(“2006

for

Physician

The policy was renewed for the period July 1, 2007 to

1,

2008.

Corporation,

Am.

Countercl.

Medical

Ex.

Partnership

H,

Physician,

Professional

Medical
Liability

Insurance Policy No. HCP4003081 for 7/1/2007 to 7/1/2008, ECF
No. 25-1 at 2 (“2007 Physician Policy”).
again

for

the

Countercl.

Ex.

Partnership

period
I,

July

1,

Physician,

Professional

2008

The policy was renewed

to

Medical

Liability

July

1,

2009.

Corporation,

Insurance

Am.

Medical

Policy

No.

HCP4004176 for 7/1/2008 to 7/1/2009, ECF No. 25-2 at 2 (“2008
Physician Policy”).
Policy,

2007

The Court will refer to the 2006 Physician

Physician

Policy,

and

2008

Physician

Policy

collectively as the “Physician Policies.”
A.

Who Is An Insured

With regard to who is an insured, the Physician Policies
provide, in pertinent part:

3

Under this section, the following are included as
insureds and covered separately. However, the limit of
insurance shown on the Declarations for this section
of the policy is shared by all insureds described
below:
1.

Named Insured. If you are the Named Insured
in the Declarations, you are an insured.
* * *

3.

Medical
Entities.
If
you
are
an
organization designated in the Declarations
or on an endorsement, you are an insured;
your
executive
officers,
shareholders,
directors,
trustees
and
governors
are
insureds, but only while acting within the
course and scope of their duties to you.
* * *

5.

Persons
Performing
Committee
or
Board
Services. Persons performing services on or
for your formal review boards or committees
are insureds, but only while performing
services required or requested by such
boards or committees.
Those who carry out
the orders of such committees or boards are
insureds while in the course of executing
the orders. Those who provide information to
such boards or committees to help them
evaluate applicants for staff membership or
privileges, or to conduct corrective or
disciplinary action are also insureds but
only with respect to the providing of such
information or conducting of such actions.

2006 Physician Policy § I(F), ECF No. 1-1 at 8-9; accord 2007
Physician Policy § I(F), ECF No. 25-1 at 26-27; 2008 Physician
Policy § I(F), ECF No. 25-2 at 22-23.
The named insured in the Declarations is “Columbus Regional
Healthcare System Employed Physicians.”

2006 Physician Policy,

ECF No. 1-1 at 3; 2007 Physician Policy, ECF No. 25-1 at 2; 2008
4

Physician Policy, ECF No. 25-2 at 2.
named insured in the Declarations.
as

an

“additional

insured”

in

Columbus Regional is not a
Columbus Regional is named

an

endorsement

as

follows:

“Columbus Regional Health System, Inc. and The Medical Center,
Inc. [are included as additional insureds,] but only if they are
held

legally

responsible

physician(s)

. . .

arising

out

of

failing

to

under

the

provide

for

insured

acts

policy

this

the

with

physician(s)

professional

of

any

respect
. . .

services.”

insured

to

claims

providing

2006

or

Physician

Policy, ECF No. 1-1 at 42; accord 2007 Physician Policy, ECF No.
25-1 at 15; 2008 Physician Policy, ECF No. 25-2 at 14.

This

endorsement limits their status as an additional named insured
to

claims

arising

from

professional

services

provided

by

Columbus Regional’s insured physicians.

Columbus Regional is

not

claims

an

additional

named

insured

for

arising

from

professional committee activities.
B.
With

What Is Covered
regard

to

what

claims

are

covered,

the

Physician

Policies provide in pertinent part:
[Hudson] will pay those sums which an insured becomes
legally obligated to pay as damages, including damages
assumed under contract, because of bodily injury that
results from the providing or failure to provide
professional services:
1.

By an insured; or

2.

By employees or agents for whose acts you
are legally responsible.
5

[Hudson] also will pay damages, which an insured
becomes
legally
obligated
to
pay
arising
from
professional committee activities of a physician
insured under this policy. However, insurance under
this policy for professional committee activities is
to be considered excess insurance over any other
insurance
providing
coverage
for
professional
committee activities.
2006 Physician Policy § I(A), ECF No. 1-1 at 7; accord 2007
Physician Policy § I(A), ECF No. 25-1 at 24; 2008 Physician
Policy § I(A), ECF No. 25-2 at 21.

The words “you” and “your”

refer “to the Named Insured shown in the Declarations.”
Physician

Policy,

ECF

No.

1-1

at

5;

accord

2007

2006

Physician

Policy, ECF No. 25-1 at 22; 2008 Physician Policy, ECF No. 25-2
at 19.
The term “professional services” means “the diagnosis of,
treatment

or

medical

regarding,

a

patient’s

care

for,

medical

or

medical

condition.”

consultation

2006

Physician

Policy, ECF No. 1-1 at 29; accord 2007 Physician Policy, ECF No.
25-1 at 57; 2008 Physician Policy, ECF No. 25-2 at 43.

The term

“professional committee activities” means “performance of any of
the following by you or an insured acting on your behalf: (a)
Peer review or quality assurance; or (b) Utilization review on
behalf

of

your

patients

medical society.”

or

on

behalf

of

a

state

or

county

2006 Physician Policy, ECF No. 1-1 at 29;

accord 2007 Physician Policy, ECF No. 25-1 at 57; 2008 Physician
Policy, ECF No. 25-2 at 43.

6

II.

The Underlying Claim
On July 13, 2006, Benjamin Blackwell was allegedly injured

as a result of treatment he received from Dr. Gerald Ross, a
physician at The Medical Center.

Blackwell brought a medical

malpractice action against Dr. Ross.
also

asserted

Columbus

that

Regional,

Dr.

Ross

and

he

was

In that action, Blackwell
improperly

brought

a

credentialed

claim

against

by

Columbus

Regional for negligent credentialing, negligent hiring, and/or
negligent retention.
Dr. Ross was credentialed according to the credentialing
process established by The Medical Center.

Defs.’ Br. in Supp.

of Mot. for Partial Summ. J. Attach. 2, Layfield Decl. ¶¶ 4, 9,
ECF No. 33-2.
Committee

to

The Medical Center “established a Credentials
assist

The

Medical

Center

functions of the credentialing process.”

in

performing

Id. ¶ 6.

the

Dr. Andrew

Morley, who is an additional named insured under the Physician
Policies but who was not sued in the underlying action, “was
employed by The Medical Center as its Chief Medical Officer[,
and he] served as a member of the Credentials Committee.”

Id.

“The

and

Medical

Center’s

Medical

Staff

Executive

Committee

Board of Directors are responsible for approving and carrying
out

the

recommendations

of

Dr.

Morley

and

the

Credentials

Committee regarding the credentialing of a physician.”
“The

Medical

Center’s

Board

of

7

Directors

makes

Id. ¶ 8.
the

final

decision as to whether a physician should be credentialed.”
“The

Medical

Center’s

Chief

Executive

Officer

and

Id.

Board

of

Directors are responsible for taking disciplinary or corrective
action

with

regard

credentialed.”

to

a

physician

who

has

been

previously

Id.
DISCUSSION

To decide the present motions, the Court must construe the
insurance

contract

construction.

using

ordinary

insurance

of

contract

State Farm Fire & Cas. Co. v. Bauman, 313 Ga.

App. 771, 773, 723 S.E.2d 1, 3 (2012).
an

rules

policy

require

no

“[U]nambiguous terms of

construction,

and

the

plain

meaning of such terms must be given full effect, regardless of
whether they might be beneficial to the insurer or detrimental
to the insured.”

Am. Nat’l Prop. & Cas. Co. v. Amerieast, Inc.,

297 Ga. App. 443, 446, 677 S.E.2d 663, 666 (2009).

A word or

phrase is ambiguous only if it “may be fairly understood in more
ways than one” and thus “involves a choice between two or more
constructions of the contract.”

Bauman, 313 Ga. App. at 774,

723 S.E.2d at 3.
It is clear that Columbus Regional is not listed as a named
insured in the Physician Policies except to the extent that it
is legally responsible for professional services provided by one
of its physicians who is insured under the Physician Policies.
This

coverage

does

not

extend

8

to

professional

committee

activities.

Recognizing that it is not a named insured for a

credentialing claim, Columbus Regional attempts to find coverage
under

the

“Persons

Performing

Committee

or

Board

section of the Physician Policies (§ I(F)(5)).1

Services”

That provision

of the Policy states that Hudson “will pay damages, which an
insured

becomes

legally

obligated

to

pay

arising

from

professional committee activities of a physician insured under
this policy.”

2006 Physician Policy § I(A), ECF No. 1-1 at 7;

accord 2007 Physician Policy § I(A), ECF No. 25-1 at 24; 2008
Physician Policy § I(A), ECF No. 25-2 at 21.

Columbus Regional

contends that it is an insured under the Physician Policies as a
“person performing committee or board services.”

The Physician

Policies limit such coverage: “Persons performing services on or
for your formal review boards or committees are insureds, but
only while performing services required or requested by such
boards or committees.”

2006 Physician Policy § I(F)(5), ECF No.

1-1 at 9; accord 2007 Physician Policy § I(F)(5), ECF No. 25-1
at 27; 2008 Physician Policy § I(F)(5), ECF No. 25-2 at 23.
Columbus Regional argues that because Dr. Morley is a named
insured under the Physician Policies and because the words “you”
and “your” mean “the Named Insured shown in the Declarations,”
the phrase “your formal review boards or committees” means “the

1

Columbus Regional does not argue that it is covered as a “Named
Insured” (§ I(F)(1)) or a “Medical Entity” (§ I(F)(3)).

9

formal review boards or committees on which Dr. Morley serves.”
Defs.’ Br. in Supp of Mot. for Partial Summ. J. 28, ECF No. 33.
Therefore,

Columbus

Regional

argues,

persons

who

perform

services for the formal review boards or committees are insureds
under the Physician Policies.

Columbus Regional further argues

that it is an insured under this provision because, through
various employees and its board of directors, Columbus Regional
performed services for the formal review boards and committees
related to the credentialing of Dr. Ross.

Id. at 29-30.

First, Columbus Regional cannot seriously dispute that the
formal review boards and committees referenced in the Physician
Policies

are

committees.”
“The

not

Morley’s

formal

review

boards

or

Columbus Regional’s own evidence demonstrates that

Medical

Committee.”

“Dr.

Center

. . .

established

Layfield Decl. ¶ 6.

[the]

Credentials

There is simply no evidence in

the present record to suggest that the Credentials Committee or
the Medical Staff Executive Committee were personal committees
of Dr. Morley.

Rather, the only evidence in the record is that

the committees referenced in § I(F)(5) are The Medical Center’s
committees.

See Layfield Decl. ¶¶ 4-8 (discussing The Medical

Center’s credentialing process).

The Court may not strain to

extend coverage where none was contracted.
at 773, 723 S.E.2d at 3.

Bauman, 313 Ga. App.

The only reasonable inference is that

10

the phrase “your formal review boards or committees” means The
Medical Center’s formal review boards or committees.
The next question is whether under § I(F)(5) The Medical
Center can be considered a person performing services on or for
its

own

whether

formal
“person”

review

boards

contemplates

or
an

committees.
entity

such

Pretermitting
as

the

Medical

Center, the Court finds that the parties did not intend for
§ I(F)(5)

to

professional

cover

Columbus

committee

Regional

activities

in

for
light

claims
of

related

the

to

Physician

Policies’ specific limitation of coverage for Columbus Regional
as an insured to claims related to professional services, which
does not include review board or committee work.

See, e.g.,

Dowse v. S. Guar. Ins. Co., 263 Ga. App. 435, 437, 588 S.E.2d
234, 235-36 (2003) (noting that to determine the intent of the
parties to a contract, the whole contract must be taken together
and contract terms must not be “read in isolation and out of
context”).

Thus, though Columbus Regional employees who serve

on the formal review boards or committees may be considered
insureds under § I(F)(5), Columbus Regional is not.

Hudson is

therefore

Physician

entitled

to

summary

judgment

because

the

Policies do not provide coverage for the underlying negligent
credentialing claim.

The Court need not reach the alternative

bases for Hudson’s summary judgment motion.

11

CONCLUSION
As discussed above, the Court finds that the underlying
negligent credentialing claim against Columbus Regional is not
covered

under

the

Physician

Policies.

Therefore,

Hudson’s

summary judgment motion (ECF No. 29) is granted, and Columbus
Regional’s summary judgment motion (ECF No. 30) is denied.

IT IS SO ORDERED, this 21st day of December, 2012.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

12