Admiral Insurance Company v. Thomas et al

Filing 45

ORDER denying as moot 44 Defendants Metzes' Motion for Leave of Court; denying 33 Defendants Metzes' Motion for Summary Judgment; granting 34 Admiral Insurance Company's Motion for Summary Judgment. Signed by Honorable Robin J. Cauthron on 1/28/13. (lg)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
ADMIRAL INSURANCE COMPANY,
Plaintiff,
vs.
RUPERT R. THOMAS, M.D.;
SSM HEALTHCARE OF OKLAHOMA,
INC., d/b/a ST. ANTHONY HOSPITAL;
MICHELLE METZ, individually and
next friend of A. M., a minor; and
DUSTEN METZ,
Defendants.

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Case Number CIV-12-0198-C

MEMORANDUM OPINION AND ORDER
Plaintiff filed the present action seeking a declaration of rights and responsibilities
pursuant to an insurance policy it issued to Defendant Rupert R. Thomas, M.D. Dr. Thomas
was sued by the Metz Defendants, who alleged he committed medical malpractice in the
delivery of A.M. Upon receipt of the lawsuit, Dr. Thomas sought coverage for the
malpractice claim from Plaintiff. Plaintiff denied Dr. Thomas’s claim, arguing it had no duty
to defend or cover the claim because the alleged malpractice was not within the scope of the
insurance policy.

The parties1 have filed cross-motions for summary judgment with each arguing the
undisputed material facts demonstrate an entitlement to relief. After consideration of the
parties’ briefs, the Court finds there are no material disputes about much of the underlying
facts. Those facts are set out here:
Dr. Thomas is a physician practicing in Oklahoma County. Plaintiff originally issued
Dr. Thomas a policy covering the period from 12/31/2009 to 12/31/2010. That policy also
provided retroactive coverage, providing coverage back to December 31, 2006. Dr. Thomas
obtained the policy after working with an insurance agent by the name of Drew Smith. Drew
Smith is a general insurance agent who, after speaking with Dr. Thomas about the type of
coverage desired, submitted an application to an entity known as Colemont/AmWINS.
Colemont/AmWINS submitted Dr. Thomas’s request for insurance to various surplus lines
carriers, including Plaintiff. Plaintiff responded to Colemont/AmWINS request with a
proposal for coverage. Based on Plaintiff’s proposal of coverage, Colemont/AmWINS
submitted an outline of proposed coverage to Mr. Smith, who, in turn, provided the
information to Dr. Thomas. Dr. Thomas then elected coverage through Plaintiff and paid the
necessary premiums. It is the scope of coverage provided by Plaintiff’s policy that is the
subject of the current lawsuit.

1

Defendant SSM Healthcare of Oklahoma Inc., d/b/a St. Anthony Hospital, is not
included within the term “parties” in this Order. Although Plaintiff had a summons issued
for this Defendant, there is no proof of service. SSM Healthcare has not appeared in this
action. As set forth below, the Court will direct Plaintiff to show cause why any claim
against SSM should not be dismissed.
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Dr. Thomas and the Metz Defendants argue that Plaintiff improperly excluded
obstetrics coverage from the insurance policy and therefore is improperly denying coverage
for the claims made by the Metzes. In contrast, Plaintiff argues that it responded to a request
for coverage for a gynecological practice, provided an insurance proposal regarding coverage
for that limited practice, and ultimately wrote an insurance policy for Dr. Thomas covering
only gynecology.
STANDARD OF REVIEW
Summary judgment is appropriate if the pleadings and affidavits show 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] motion for summary judgment should be granted
only when the moving party has established the absence of any genuine issue as to a material
fact.” Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 561 F.2d 202, 204 (10th Cir.
1977). The movant bears the initial burden of demonstrating the absence of material fact
requiring judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). A fact is material if it is essential to the proper disposition of the claim. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant carries this initial burden,
the nonmovant must then set forth “specific facts” outside the pleadings and admissible into
evidence which would convince a rational trier of fact to find for the nonmovant.
Fed. R. Civ. P. 56(e). These specific facts may be shown “by any of the kinds of evidentiary
materials listed in Rule 56(c), except the mere pleadings themselves.” Celotex, 477 U.S. at
324. Such evidentiary materials include affidavits, deposition transcripts, or specific
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exhibits. Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir. 1992).
“The burden is not an onerous one for the nonmoving party in each case, but does not at any
point shift from the nonmovant to the district court.” Adler v. Wal-Mart Stores, Inc., 144
F.3d 664, 672 (10th Cir. 1998). All facts and reasonable inferences therefrom are construed
in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
ANALYSIS
The Metz Defendants aptly frame the question at issue as whether the insurance policy
in question is responsible for paying the Metzes’ claim against Dr. Thomas. Where
Defendants go afoul, however, is in seeking to impose a requirement on Plaintiff to exclude
obstetrics from its coverage. Rather, under the applicable law, before coverage exists, the
potential claim must lie within the scope of the insurance policy. Dodson v. St. Paul Ins. Co.,
1991 OK 24, ¶ 13, 812 P.2d 372, 377. It is only when an insurer seeks to limit the scope of
provided coverage that a clear and unambiguous exclusion is required. Id. at n.11.
As with any other issue of contract interpretation, the Court’s initial task is to
determine if there are any ambiguities in the insurance policy. See Dodson, 1991 OK 24,
¶ 12, 812 P.2d 372, 376 (“The interpretation of an insurance contract and whether it is
ambiguous is a matter of law for the Court to determine and resolve accordingly.”) As the
Oklahoma Supreme Court has stated,
an insurance policy is a contract. When its terms are unambiguous and clear,
the employed language is accorded its ordinary, plain meaning and enforced
so as to carry out the parties’ intentions. In this process we are mindful that
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an insured and insurer are free to contract for that quantum of coverage which
one is willing to extend and the other is willing to purchase. The parties are
bound by the terms of their agreement and the Court will not undertake to
rewrite the same nor to make for either party a better contract than the one
which was executed.
Bituminous Cas. Corp. v. Cowen Constr., Inc., 2002 OK 34, ¶ 9, 55 P.3d 1030, 1033
(footnotes omitted). Following these rules, then, the Court turns to the insurance policy in
question to determine whether its terms are clear and unambiguous.
The relevant insurance policy is provided as an exhibit to each party’s motion and
response. The pertinent portion of the coverage provided by the policy is found on page 1
of 7 of that policy. It states that Plaintiff will provide coverage for claims arising from a
“medical incident.” The policy then defines medical incident as “any act or omission arising
out of the: (1) furnishing of ‘professional services’ by the ‘Insured.’” (Defs.’ Brief, Dkt. No.
33, Ex. 4, p. 5.) Professional services is defined in paragraph K as “work performed by you
for others involving specialized training, knowledge and skill in the pursuit of the business
stated in the Declarations” (emphasis added). The Declarations page of the relevant
insurance policy identifies Defendant Thomas’s business as gynecology-major surgery. It
does not identify obstetrics as part of Dr. Thomas’s business. At his deposition, Dr. Thomas
provided his definition of gynecology and obstetrics, noting that gynecology would not
include the delivery of a baby. Neither party disputes that there is a clear distinction between
the practice of gynecology and obstetrics. This distinction is recognized in case law as well.
See Blackstone v. Mass. Mut. Life Ins. Co., Case No. 4:04CV-134-R, 2007 WL 293880
(W.D. Ky. 2007); Weum v. Mut. Benefit Health & Accident Ass’n, Omaha, 54 N.W.2d 20,
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22 (Minn. 1952). The Court finds as a matter of law that the terms gynecology and obstetrics
are not ambiguous.2
The Metzes’ medical malpractice claim against Dr. Thomas is clearly a “medical
incident” as that term is defined by the policy. Likewise, the claim arose from Dr. Thomas’s
provision of professional services as that term is defined. However, the malpractice claim
arises from an alleged error occurring during the delivery of a baby. Thus, the claim falls
within the definition of obstetrics, not gynecology. Because the policy did not insure Dr.
Thomas for medical incidents arising from providing the professional service of obstetrics,
the claim is not within the scope of coverage provided by the policy. In short, the Court finds
as a matter of law that the clear and unambiguous terms of the policy do not provide
coverage for the claimed medical incident.
Defendants argue that coverage should exist because of Dr. Thomas’s stated desire
to Mr. Smith to provide retroactive coverage for obstetrics but coverage limited to
gynecology only for the claims going forward. In support of this position, Defendants rely
upon testimony from Mr. Smith and documents prepared by either Mr. Smith or

2

This determination renders moot the Metz Defendants’ late-filed Motion to
Supplement. Because the Court finds the terms of the insurance contract unambiguous, there
is no basis to consider evidence outside the four corners of that document. Additionally, as
noted herein, any representation by Mr. McGill cannot bind Plaintiff by operation of 36 Okla.
Stat. § 1435.3(B). Finally, the Court notes that the Metzes’ requested filing is untimely, as
the response period to counter Plaintiff’s Motion for Summary Judgment has long passed.
To the extent Defendants believed the additional information obtained from Mr. McGill was
relevant and necessary, they were obligated to request additional time to respond as set forth
by Fed. R. Civ. P. 56(d).
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Colemont/AmWINS. However, as Plaintiff correctly notes, under Oklahoma law none of the
requirements of those documents can be imposed upon Plaintiff. See 36 Okla. Stat.
§ 1435.3(B) that “Every surplus lines insurance broker who solicits an application for
insurance of any kind shall, in any controversy between the insured . . . and the insurer
issuing any policy upon such application, be regarded as representing the insured . . . and not
the insurer.” Thus, the actions of Mr. Smith and Colemont/AmWINS can only be attributed
to Dr. Thomas, not Admiral. Consequently, Plaintiff is left relying on the policy language
for coverage of the Metzes’ claim and, as noted above, that policy does not cover the loss as
alleged by the Metzes.
For the reasons set forth herein, Defendant Metzes’ Motion for Summary Judgment
(Dkt. No. 33) is DENIED and Admiral Insurance Company’s Motion for Summary Judgment
(Dkt. No. 34) is GRANTED. Plaintiff shall, within 10 days of the date of this Order, show
cause why its claims against SSM Healthcare of Oklahoma, Inc., should not be dismissed.
Defendants Metzes’ Motion for Leave of Court (Dkt. No. 44) is DENIED as moot. A
judgment shall issue at the conclusion of the case.
IT IS SO ORDERED this 28th day of January, 2013.

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