Wolcott et al v. Willis of Ohio, Inc. et al

Filing 47

Memorandum of Opinion and Order Because Plaintiff has pled sufficient facts pursuant to Fed. R. Civ. P. 8(a)(2) to state a claim that Underwriters issued both excess liability and umbrella liability insurance, Defendants Certain Underwriters a t Lloyd's, London (subscribing to Policy No. B0429VHP080059 and any and all renewal policies thereto), and Underwriters at Lloyd's, London (subscribing to Policy No. B0429VHP080059 and any and all renewal policies thereto)'s Motion to Dismiss (ECF No. 5 ) is denied. Responses to Plaintiffs' First Set of Interrogatories and Requests for Production of Documents (ECF No. 1 -2 at PageID #: 72-81) shall be provided within 30 days after the Case Management Conference is held. Judge Benita Y. Pearson on 4/14/2016. (JLG)

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

MATTHEW WOLCOTT, etc., et al. ,
Plaintiffs,
v.
WILLIS OF OHIO, INC., et al.,
Defendants.

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CASE NO. 4:16CV0316

JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION
AND ORDER
[Resolving ECF No. 5]

Pending is Defendants Certain Underwriters at Lloyd’s, London (subscribing to Policy
No. B0429VHP080059 and any and all renewal policies thereto), and Underwriters at Lloyd’s,
London (subscribing to Policy No. B0429VHP080059 and any and all renewal policies thereto)
(collectively, “Underwriters”) Motion to Dismiss (ECF No. 5) the Supplemental Complaint (ECF
No. 1-2 at PageID #: 16-71) pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief can be granted. The Court has been advised, having reviewed the record, the
parties’ briefs1 and the applicable law. For the reasons set forth below, the Court denies the
motion.

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The “Claims Made Excess Liability Reinsurance Agreement” (Policy No.
C090945) that was issued to Defendant Forum Health Insurance, Ltd. (“FHIL”) for the
period October 1, 2009 to October 1, 2010 (hereinafter “Policy No. C090945”) (ECF No.
30) was filed under seal pursuant to ECF No. 28, which is the Marginal Order granting
Underwriters’ Motion for Leave to File Under Seal (ECF No. 25).

(4:16CV0316)
I. Background
On December 30, 2015, Plaintiffs filed a Supplemental Complaint before the Trumbull
County, Ohio Court of Common Pleas pursuant to Ohio Rev. Code § 3929.062 in Case No. 2011
CV 01512 against Underwriters, FHIL, and Lexington Insurance Company3 seeking to collect on
the judgment entry for medical malpractice in the amount of $28,745,991 against Nicole R.
Prusky, RN under insurance policies for which these defendants are allegedly responsible. On
February 10, 2016, Underwriters removed the case to this Court pursuant to 28 U.S.C. §§ 1332,
1441, and 1446. See Notice of Removal (ECF No. 1).
II. Standard of Review
In deciding a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court must take
all well-pleaded allegations in the complaint as true and construe those allegations in a light most
favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). A
cause of action fails to state a claim upon which relief may be granted when it lacks “plausibility

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Section 3929.06 allows a judgment creditor to bring suit to collect under a
liability insurance policy insuring a judgment debtor. Specifically, § 3929.06(A)(1)
provides that the plaintiff “is entitled as judgment creditor to have an amount up to the
remaining limit of liability coverage provided in the judgment debtor’s policy of liability
insurance applied to the satisfaction of the final judgment.” If the judgment debtor’s
insurer has not paid the judgment creditor within 30 days of the entry of final judgment,
“the judgment creditor may file in the court that entered the final judgment a
supplemental complaint against the insurer seeking the entry of a judgment ordering the
insurer to pay the judgment creditor the requisite amount.” § 3929.06(A)(2).
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Willis of Ohio, Inc. was also named as a New Party Defendant. On March 1,
2016, Plaintiffs filed a Notice of Dismissal of Willis of Ohio, Inc. Without Prejudice
Under Fed. R. Civ. P. 41(a)(1)(A)(i) (ECF No. 17), which the Court approved. See ECF
No. 18.
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(4:16CV0316)
in th[e] complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 564 (2007). A pleading must
contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”
Ashcroft v. Iqbal , 556 U.S. 662, 677-78 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). Plaintiff is not
required to include detailed factual allegations, but must provide more than “an unadorned,
the-defendant-unlawfully-harmed-me accusation.” Id. at 678. A pleading that offers “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action will not do.”
Twombly, 550 U.S. at 555. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid
of “further factual enhancement.” Id. at 557. It must contain sufficient factual matter, accepted
as true, to “state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. The
plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer
possibility that a defendant has acted unlawfully. Twombly, 550 U.S. at 556. Where a complaint
pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line
between possibility and plausibility of ‘entitlement to relief.’” Id. at 557 (brackets omitted).
III. Analysis
Underwriters argues it did not issue any policy of insurance that insures, or otherwise
covers, Judgment Debtor Nurse Prusky or her employer(s). Instead, it sold a reinsurance contract
to FHIL with respect to coverages issued by FHIL to Forum Health. See Covington v. Ohio. Gen.
Ins. Co., 99 Ohio St.3d 117, 119 (2003) (reinsurance contract is not traditional insurance insuring
against bodily injury or property damage, but is instead an agreement “to protect an insurer from

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a business risk”). Memorandum in Support (ECF No. 5) at PageID #: 108. Underwriters
declaration at PageID #: 109 of ECF No. 5 that “Plaintiffs allege in their Supplemental
Complaint [that] Underwriters issued only a reinsurance contract” is simply not true. Nowhere in
the Supplemental Complaint (ECF No. 1-2 at PageID #: 16-71) do Plaintiffs allege that
Underwriters “issued only a reinsurance contract.” Even a cursory review of the affirmative
pleading reveals that it contains specific allegations that Underwriters issued both excess liability
and umbrella liability insurance to Forum Health and/or Trumbull Memorial Hospital and/or any
of their affiliated entities under whom Nurse Prusky was employed and acting on behalf of. ECF
No. 1-2 at PageID #: 21, ¶ 15(c); 20, ¶ 14; 23-24, ¶¶ 20-21; see also ECF No. 1-2 at PageID #:
19, ¶ 7.4
Moreover, Policy No. C090945 (ECF No. 30), produced by Underwriters after Plaintiffs
filed their Memorandum in Opposition (ECF No. 16), is different than Excess Liability Policy
No. B0429VHP0800595 referenced in the Supplemental Complaint (ECF No. 1-2 at PageID #:
16-71). According to Plaintiffs, as of April 4, 2016, Underwriters had not yet identified whether

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Plaintiffs argue that their allegations are also supported by the representations
made to the bankruptcy court in In re: Forum Health, No. 4:09-bk-40795-kw (Bankr.
N.D. Ohio filed March 16, 2009) that Underwriters provided “Reinsurance - Excess
Liability” insurance coverage to Forum Health. See, e.g., ECF No. 16-2 at PageID #: 185
and 187-202. Forum Health (Trumbull Memorial Hospital) stated in a motion filed in the
bankruptcy court that Underwriters provide “excess . . . hospital professional” coverage.
ECF No. 16-2 at PageID #: 190.
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This Policy No. appears to have been derived from the exhibit which Forum
Health submitted to the bankruptcy court. See ECF No. 16-2 at PageID #: 185. As of
April 1, 2016, Underwriters had not produced this policy and all renewals to it. Although
Underwriters declares that it “‘expired’ on September 30, 2009.” Reply Memorandum
(ECF No. 27) at PageID #: 234 n.2.
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(4:16CV0316)
any tail or extended coverage or reporting endorsements exist with respect to Policy No.
C090945, or whether any other policies, coverages or extended coverage or reporting
endorsements were issued by Underwriters to either Forum Health or its successor after Policy
No. C090945. Surreply (ECF No. 40) at PageID #: 595 n.1, 600.
By its own governing terms, Policy No. C090945 appears to be a claims made insurance
policy that provides, at a minimum, excess liability insurance for “Medical Incidents,” including
nursing care, involving either Forum Health and Trumbull Memorial Hospital or any of their
employees for negligent acts committed in the course and scope of their employment. It is
expressly identified as an “EXCESS HEALTH CARE PROVIDER’S LIABILITY POLICY”
(ECF No. 30 at PageID #: 260), not simply reinsurance, and Forum Health and Trumbull
Memorial Hospital Foundation, Judgment Debtor Nurse Prusky’s employers, are listed as Named
Insureds. See Item 1 of the Declarations showing the “NAMED INSURED” (ECF No. 30 at
PageID #: 280) and ENDORSEMENT NO. 5 styled “SCHEDULE OF NAMED INSUREDS”
(ECF No. 30 at PageID #: 287). More significantly, Policy No. C090945 defines “Insureds” for
medical liability coverage purposes to include “any employee of the NAMED INSURED, except
an intern, resident or a licensed physician acting as such, whilst acting within the scope of the
EMPLOYEE’s duties as such.” Definition 1(G), definition of “insured” (ECF No. 30 at PageID
#: 262-63). Coverage is provided for “Medical Incidents,” which is defined to include nursing
care. Policy Definitions 5 and 8 (ECF No. 30 at PageID #: 263-64).
The Court concludes the Supplemental Complaint (ECF No. 1-2 at PageID #: 16-71)
contains sufficient factual allegations which, when accepted as true and construed in Plaintiffs’

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favor, set forth viable claims against Underwriters upon which relief can be granted.
Underwriters, however, is not barred from asserting again the argument that it did not issue a
liability insurance policy to Judgment Debtor Nurse Prusky or her employer(s) after discovery
has been completed and the Court has all of the pertinent language from the policy or policies
and related documents.
IV. Conclusion
Because Plaintiff has pled sufficient facts pursuant to Fed. R. Civ. P. 8(a)(2) to state a
claim that Underwriters issued both excess liability and umbrella liability insurance, Defendants
Certain Underwriters at Lloyd’s, London (subscribing to Policy No. B0429VHP080059 and any
and all renewal policies thereto), and Underwriters at Lloyd’s, London (subscribing to Policy No.
B0429VHP080059 and any and all renewal policies thereto)’s Motion to Dismiss (ECF No. 5) is
denied.
Responses to Plaintiffs’ First Set of Interrogatories and Requests for Production of
Documents (ECF No. 1-2 at PageID #: 72-81) shall be provided within 30 days after the Case
Management Conference is held.

IT IS SO ORDERED.

April 14, 2016
Date

/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge

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