ProAssurance Specialty Insurance Company, Inc. v. McCullough et al

Filing 22

REPORT AND RECOMMENDATIONS re 11 MOTION for Summary Judgment filed by ProAssurance Specialty Insurance Company, Inc., 15 MOTION for Summary Judgment filed by Ricky W. McCullough, MD. I recommend that the Court grant in p art and deny in part ProAssurances motion for summary judgment (ECF No. 11) and grant in part and deny in part Dr. McCulloughs motion for summary judgment (ECF No. 15). If the Court adopts this recommendation, all claims asserted in ProAssurances complaint will be determined and final judgment may enter, terminating the action. Objections to R&R due by 9/26/2019. So Ordered by Magistrate Judge Patricia A. Sullivan on 9/12/2019. (Saucier, Martha)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
PROASSURANCE SPECIALTY
INSURANCE COMPANY, INC.,
Plaintiff,
v.
RICKY W. MCCULLOUGH, M.D., and
BARBARA VALLETTA,
Defendants.

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C.A. No. 18-343WES

REPORT AND RECOMMENDATION
Patricia A. Sullivan, United States Magistrate Judge.
Filed as a declaratory judgment action pursuant to 28 U.S.C. § 2201, this case is an
insurance coverage dispute pitting a provider of professional services insurance to physicians,
ProAssurance Specialty Insurance Company, Inc. (“ProAssurance”), against its insured, Ricky
W. McCullough, M.D., and a certified nurse assistant/mental healthcare worker (“CNA”)
employed by Roger Williams Medical Center (“RWMC”), Barbara Valletta. The case arises out
of an incident that occurred on May 21, 2012, when Dr. McCullough was treating an intoxicated
patient in the emergency room, assisted by Ms. Valletta in her capacity as a CNA. When Ms.
Valletta repeatedly raised her voice at, grabbed, pushed and shook the patient, Dr. McCullough
believed she had “kind of crossed over the line” and restrained her by grabbing her by the arm.
Ms. Valletta claimed that this action amounted to negligence, assault and battery and negligent
infliction of emotional distress and sued Dr. McCullough in Rhode Island Superior Court for lost
wages, medical expenses and pain and suffering, among other damages. Claiming that Ms.
Valletta’s Superior Court complaint alleged a “professional incident” covered by the
ProAssurance policy, Dr. McCullough demanded that it defend the action. ProAssurance
responded by invoking the definitions of “professional incident” and “professional services,” as

well as the exclusion for “any obligation . . . for which any carrier as insurer may be held liable
under any workers’ compensation . . . law,” among others, and took the position that it had no
duty to defend or to indemnify Dr. McCullough. It nevertheless agreed to provide a defense as a
courtesy under a full reservation of rights. To clarify its obligations, it initiated this declaratory
judgment action properly based on diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).
ProAssurance’s motion for summary judgment asks the Court to construe the plain
meaning of the words used in its Health Care Professional Liability Policy (the “Policy”) and to
declare that it has no duty to defend or to indemnify Dr. McCullough in connection with Ms.
Valletta’s claim. Dr. McCullough’s cross motion asks the Court to declare the opposite. Ms.
Valletta asks the Court to deny ProAssurance’s motion for summary judgment because she
agrees with Dr. McCullough’s argument that the incident is covered by the Policy; she also
asserts that ProAssurance delayed in initiating this declaratory judgment action and that her
rights are not limited by the exclusions in the Policy because she is not a party to it.
The cross motions of ProAssurance and Dr. McCullough have been referred to me for
report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). While Dr. McCullough and
Ms. Valletta apparently continue to contest vigorously the facts arising from the incident,
including whether his conduct gives rise to liability and whether and to what extent his conduct
caused any injury, the facts that are material to this declaratory judgment action are undisputed
and the matter is ripe for determination. For the reasons that follow, I find the Policy to be clear
and unambiguous and recommend that the Court declare that that ProAssurance has a duty to
defend and indemnify because the incident arose out of the rendering of professional services.
Nevertheless, I also recommend that the Court declare that ProAssurance’s duty to defend and
indemnify is cabined by the unambiguous language of Exclusion G, which eliminates Policy

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coverage for any obligations based on Ms. Valletta’s expenses for reasonable and necessary
medical treatment, lost wages and/or lost earning capacity, all of which are potential liabilities of
the insurer that was liable to pay, and did pay, workers’ compensation coverage to Ms. Valletta
in connection with the incident under Rhode Island workers’ compensation law. See generally
R.I. Gen. Laws § 28-33-1, et seq.
I.

UNDISPUTED FACTS1

On May 21, 2012, Dr. McCullough was working as a contract physician providing
medical services to patients on behalf of NES Americas, Inc., through its subsidiary, Medical
Services of Rhode Island, Inc., in the emergency room at RWMC in Providence, Rhode Island.
PSUF ¶¶ 1-7. He claims that, while providing emergency medical treatment to an intoxicated
patient, he became involved in the incident with Ms. Valletta, an employee of RWMC who was
assigned as the CNA to assist him. DSUF ¶ 21. While providing medical services to the patient,
Dr. McCullough alleges that he restrained Ms. Valletta to prevent her from continuing to grab,
push, shake and yell at the patient. PSUF ¶ 8; DSUF ¶¶ 21-30. Dr. McCullough testified that his
conduct was based on his belief that Ms. Valletta’s actions were not necessary for the safety of
the patient and that she had “kind of crossed over the line.” DSUF ¶¶ 25, 28. With respect to the
incident, Ms. Valletta does not claim that she was, in any respect, a patient of Dr. McCullough or
that she was receiving any sort of professional treatment from Dr. McCullough or that there was
any physician/patient relationship between her and Dr. McCullough.

ProAssurance relies on twenty undisputed facts. ECF No. 12 (“PSUF ¶¶ 1-20”). Dr. McCullough does not dispute
any of them and has added seventeen more. ECF No. 16 (“DSUF ¶¶ 21-37”). No other party has filed a statement
disputing any of ProAssurance’s or Dr. McCullough’s facts.
1

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On December 17, 2013, Ms. Valletta filed a Complaint suing Dr. McCullough in the
Rhode Island Superior Court. PSUF ¶ 11; PSUF Ex., ECF No. 12-12 (“Valletta Compl.”). It
alleges that Dr. McCullough committed an assault on her while she was working in the course of
her employment at RWMC. Valletta Compl. ¶¶ 4, 7, 10, 11, 14, 17. The pleading has three
Counts – first, negligence in breach of the duty to provide a safe and secure atmosphere; second,
assault and battery in intentionally causing bodily contact; and third, negligent infliction of
emotional distress by causing severe emotional distress accompanied by physical symptoms. Id.
¶¶ 4-19. The Valletta Complaint seeks damages for “severe personal injuries, great pain and
suffering, . . . tremendous medical expenses, . . . loss of enjoyment of life, . . . lost wages and/or
lost earning capacity, and . . . other great damage,” as well as for “severe emotional distress.” Id.
¶¶ 8, 12, 19.
On December 31, 2013, Dr. McCullough sought defense coverage from ProAssurance as
to the Valletta Complaint. PSUF ¶ 12; PSUF Ex., ECF No. 12-12. Several weeks later, Dr. Keri
Gardner of NES, on behalf of ProAssurance, advised Dr. McCullough that the Policy does not
provide defense or indemnity coverage as to the Valletta Complaint, as the Policy does not
provide coverage for claims of injury to non-patients; nevertheless ProAssurance agreed that it
would provide a courtesy defense to Dr. McCullough under a full reservation of its rights. PSUF
¶¶ 5, 13; PSUF Ex., ECF No. 12-13. Since that time, ProAssurance has provided a defense to
Dr. McCullough in connection with the Valletta Complaint, at all times under a full reservation
of rights. PSUF ¶¶ 15, 16, 18. The Valletta Complaint remains pending.

Because the attachments to Plaintiff’s Statement of Undisputed Facts do not have exhibit numbers, this report and
recommendation uses the applicable ECF numbers.
2

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In addition to the claims that she asserted in the Valletta Complaint, Ms. Valletta also
claimed and recovered workers’ compensation benefits. Id. ¶ 20. These benefits were provided
to her as the obligation of the workers’ compensation insurer for her employer, RWMC. Id.
II.

APPLICABLE POLICY TERMS

ProAssurance relies on two discrete arguments. First, it contends that the incident is not
covered by the Policy because Ms. Valletta was not Dr. McCullough’s patient and her claim
against him is not a professional incident because it did not involve the delivery of professional
services or involve a breach of the physician/patient relationship. Second, even if the incident is
covered by the Policy, ProAssurance asserts the exclusion barring it from any duty to defend or
indemnify in connection with obligations for which a workers’ compensation insurer may be
liable for coverage.
The Policy terms applicable to these arguments are below.
A.

Definitions

The Policy contains the following pertinent definitions:
Damages means all amounts of money which are reimbursable under this policy
because of injury . . .
Defense Costs means reasonable and necessary costs incurred by or on behalf of
an insured . . .
Policy means the Cover Page, the forms listed thereon and any endorsements
issued from time to time. The policy terms in effect at the time a professional
incident is first reported shall apply to that professional incident.
Professional incident means:
A. a single act or omission, or a series of related acts or omissions during
a continuing course of professional services, arising out of the rendering
of, or failure to render, professional services to any one person by an
insured or any person for whose acts or omissions an insured is legally
responsible, which results, or is likely to result, in damages . . .

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Professional services means the provision of direct patient care, including
treatment, diagnosis and consultation that an insured may legally perform and that
is within the scope of the insured’s profession.
PSUF Ex., ECF No. 12-3 at 4-5 (emphasis in original) (“Policy”).
B.

Insuring Agreement

The Insuring Agreement provides:
PROFESSIONAL LIABILITY COVERAGE PART
I. INSURING AGREEMENT
During the policy period only, we will reimburse the policyholder those sums
that an insured becomes fully and finally legally obligated to pay as damages
and defense costs because of any professional incident which occurs after the
retroactive date and which are actually paid by the policyholder during the
policy period.
Id. at 5 (some emphasis omitted).
C.

Exclusions

While ProAssurance has asserted several exclusions that might be applicable if coverage
were afforded in the first instance,3 its motion for summary judgment asks the Court to declare
the meaning only of Exclusion G:
EXCLUSIONS
We will not reimburse for any damages because of any of the following, and we
will not provide a defense for any suit alleging any of the following: . . .

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The asserted exclusions that are not in issue now are the following:
D. Liability arising out of any (1) willful, wanton, fraudulent (whether intentional or
unintentional), dishonest, criminal, reckless, malicious or oppressive act or omission; or (2)
conduct which is outrageous, demonstrates conscious indifference to consequences, or evidences
intentional, reckless or careless disregard for the rights of others; . . .
L. Liability arising out of the acts of any insured which are outside the scope of the insured’s
profession or duties.

Id. at 6-7 (emphasis omitted).

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G. Any obligation for which an insured or any carrier as insurer may be held
liable under any workers’ compensation, unemployment compensation,
disability benefits, or any similar law.
Id. at 6 (emphasis omitted).
III.

STANDARD OF REVIEW

In an insurance coverage dispute, summary judgment is proper if “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); Mount Vernon Fire Ins. Co. v. Stagebands, Inc., 636 F. Supp. 2d 143, 146
(D.R.I. 2009); see Vermont Mut. Ins. Co. v. Ciccone, 900 F. Supp. 2d 249, 256 (D. Conn. 2012)
(“summary judgment is an appropriate vehicle by which to determine whether an insurer owes an
insured a duty to defend on the basis of an insurance policy”). A dispute of fact is genuine if it
“may reasonably be resolved in favor of either party.” Vineberg v. Bissonnette, 548 F.3d 50, 56
(1st Cir. 2008). A material fact “has the capacity to sway the outcome of the litigation under the
applicable law.” Nat’l Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir. 1995).
On cross motions for summary judgment, the Court considers each movant separately.
O’Donnell v. Twin City Fire Ins. Co., 40 F. Supp. 2d 68, 71 (D.R.I. 1999); see Barnes v. Fleet
Nat’l Bank, N.A., 370 F.3d 164, 170 (1st Cir. 2004) (court determines whether either party
deserves judgment based on undisputed facts).
IV.

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APPLICABLE INSURANCE LAW AND ANALYSIS4

As to the governing law, the Policy provides as follows:
XIII. GOVERNING LAW
This policy shall be construed, and the legal relations between us and the insureds (and
anyone claiming under the insureds) shall be determined in accordance with the laws of the
state in which the address of the policyholder, as specified in the Coverage Summary, is
located . . .

Policy at 9. The Policy “Coverage Summary” lists the “policyholder” as “NES Americas, Inc., its affiliates and
subsidiary companies” and the relevant address as “6466 College Park Square, Suite 316 Virginia Beach, VA.” Id.

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Insurance contracts are construed in accordance with the general rules applicable to
contracts. TravCo Ins. Co. v. Ward, 736 S.E.2d 321, 325 (Va. 2012); Colagiovanni v. Metro.
Life Ins. Co., 190 A. 459, 460 (R.I. 1937). Words used in insurance policies are to be given their
usual, ordinary and popular meaning. TravCo, 736 S.E.2d at 325; Bush v. Nationwide Mut. Ins.
Co., 448 A.2d 782, 784 (R.I. 1982). When policy terms are clear and unambiguous, they must
be applied as written. Bush, 448 A.2d at 784. Conversely, when language is susceptible of one
or more reasonable interpretations, it is considered ambiguous and construed strictly against the
insurer. Goucher v. John Hancock Mut. Life Ins. Co., 324 A.2d 657, 662 (R.I. 1974). “No word
or clause in the contract will be treated as meaningless if a reasonable meaning can be given to it,
and there is a presumption that the parties have not used words needlessly.” TravCo, 736 S.E.2d
at 325; City of Chesapeake v. States Self-Insurers Risk Retention Grp., Inc., 628 S.E.2d 539,
541-42 (Va. 2006). Phrases and clauses in the insurance contract should be considered and
construed together to effectuate the intention of the parties. TravCo, 736 S.E.2d at 325; Floyd v.
Northern Neck Ins. Co., 427 S.E.2d 193, 196 (Va. 1993).
The language of insurance policy exclusion clauses is interpreted using the same
principles. They must also be clear and unambiguous and are to be strictly interpreted. Jackson
v. Quincy Mut. Fire Ins. Co., 159 A.3d 610, 613-14 (R.I. 2017); Am. Commerce Ins. Co. v.
Porto, 811 A.2d 1185, 1192 (R.I. 2002). The court must look not at what the insurer may have
intended the policy to cover or exclude, but rather what an ordinary reader of the policy would
have understood the policy’s terms to mean if he or she had read them. Porto, 811 A.2d at 1192.

at 3. ProAssurance contends that this language requires the Court to apply the law of the Commonwealth of
Virginia, but also represents that the law of Rhode Island is sufficiently similar to that of Virginia in all material
respects that the Court may interchangeably rely on the law of both, or either, states. Dr. McCullough and Ms.
Valletta do not disagree, but they urge the Court to rely on the law of Rhode Island. Based on the parties’
concurrence, I rely principally on the decisional law of Rhode Island and occasionally that of Virginia, with citation
to cases from other jurisdictions that are not controlling but persuasive.

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Doubts about the potential for coverage must be resolved in favor of the insured. Mount Vernon
Fire Ins. Co., 636 F. Supp. 2d at 147-48; Mallane v. Holyoke Mut. Ins. Co., 658 A.2d 18, 20
(R.I. 1995). The court should “not engage in mental or verbal gymnastics to hurdle over the
plain meaning of the policy’s language.” Porto, 811 A.2d at 1193.
Denominated the “Eight Corners Rule,” Virginia law provides that the duty of an insurer
to defend arises whenever the underlying complaint “alleges facts and circumstances, some of
which would, if proved, fall within the risk covered by the policy.” Morrow Corp. v.
Harleysville Mut. Ins. Co., 101 F. Supp. 2d 422, 426 (E.D. Va. 2000); see Copp v. Nationwide
Mut. Ins. Co., 692 S.E.2d 220, 224 (Va. 2010). The reverse is also true – that is, an insurer is not
obligated to defend its insured if “under the allegations of the complaint, it would not be liable
under its contract for any recovery.” Morrow Corp., 101 F. Supp. 2d at 426. Similarly, under
Rhode Island law, but referred to as the “pleadings test,” the insurer’s duty to defend is
determined by comparing the allegations in the underlying complaint to the risks covered in the
policy. Hingham Mut. Fire Ins. Co. v. Heroux, 549 A.2d 265, 266 (R.I. 1988). The duty to
defend is broader than the duty to indemnify. Mellow v. Med. Malpractice Joint Underwriting
Ass’n of R.I., 567 A.2d 367, 368 (R.I. 1989). If there is no duty to defend the complaint, there
also can be no duty to indemnify. Mount Vernon Fire Ins. Co., 636 F. Supp. 2d at 147; Town
Crier, Inc. v. Hume, 721 F. Supp. 99, 101 (E.D. Va. 1989).
A.

Coverage for “Professional Incident”

ProAssurance argues that the Policy does not provide coverage for the incident because
the Valletta Complaint does not state a claim by a patient regarding professional services
delivered by a physician. Rather, Ms. Valletta alleges that she was a professional herself.
ProAssurance asks the Court to focus on the definition of “professional services,” which are

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limited to the “provision of direct patient care.” Policy at 5. Its contention founders on the
Policy’s definition of “professional incident,” which is what the Policy actually insures. A
“professional incident” is not limited to injuries to a patient, nor is it limited to medical injuries
specifically caused by the delivery of “professional services.” Id. Rather, the Policy defines a
covered “professional incident” broadly as an “act . . . during a continuing course of professional
services, arising out of the rendering of, or failure to render professional services to any one
person by an insured . . . which results, or is likely to result, in damages.” Id. (emphasis
omitted).
The Rhode Island Supreme Court has broadly interpreted a virtually identical key phrase
– “arising out of the rendering of, or failure to render professional services” – as encompassing
not just claims based on medical negligence in the delivery of professional services, but also
claims based on any tort committed in the course of rendering professional services. Mellow,
567 A.2d at 368 (holding that policy covered insured for defamation arising from release of
blood alcohol readings taken by physician rendering professional services). Similarly, in Porto,
811 A.2d at 1193-95, the Rhode Island Supreme Court interpreted “arising out of” in the context
of an exclusion in a homeowner’s policy; it accepted the insurer’s argument that the ban on
coverage for bodily injuries “arising out of” sexual molestation must be interpreted as excluding
coverage for negligence claims flowing from the insured’s conduct in failing properly to
supervise the sexual predator and in failing properly to educate the child regarding how to avoid
the advances of the sexual predator. Id. (“The phrase ‘arising out of’ within policy language is
generally considered to mean ‘flowing from’ or ‘having its origin in,’ thereby ‘indicating that
there only need be ‘a’ causal connection, rather than a proximate causal connection.’”) (quoting
7 Couch on Insurance 3d § 101:54 at 101-147-48 (1997)) (emphasis in Porto). Mellow and Porto

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are strongly supportive of Dr. McCullough’s argument that “arising out of the rendering of”
professional services means that the Policy unambiguously covers the incident, which
undisputedly arose out of his rendering of professional services to the intoxicated patient.
While no cases in Rhode Island or Virginia have grappled with facts squarely analogous
to what are presented here, cases decided elsewhere are instructive; they provide further support
for the proposition that the Valletta Complaint is covered by the Policy. Most analogous is
Records v. Aetna Life & Cas. Ins., 683 A.2d 834 (N.J. Super. Ct. App. Div. 1996), where the
New Jersey court faced a policy with very similar language to what is in issue here, in that it
covered any injury “arising out of the rendering of . . . professional services.” Id. at 836. The
court found that the policy language clearly covered not just claims for the direct rendering of
professional services, but also any claim arising out of such rendering; accordingly, it held that
the policy covered the personal injury claim of a nurse who alleged that the physician disagreed
with her treatment decision and pushed and slapped her (causing a herniated disc among other
injuries) in the course of rendering patient care. Id. at 835-37. In an analysis that echoes the
Rhode Island Supreme Court’s Porto decision, Records provides that “[t]he phrase ‘arising out
of’ must be interpreted in a broad and comprehensive sense to mean ‘originating from’ or
‘growing out of.’” Id. at 837-38. To confirm that such language in a medical malpractice policy
extends coverage to claims brought by parties “other than individual patients,” the Records court
surveyed decisional law from an array of other jurisdictions, including the Rhode Island Supreme
Court’s decision in Mellow, 567 A.2d at 368.
To counter the force of this analysis, ProAssurance directs the Court to two cases: Med.
Mut. Ins. Co. of Maine v. Burka, 899 F.3d 61 (1st Cir. 2018), and Hayne v. The Doctors Co., 145
So.3d 1175 (Miss. 2014). Neither advances the ball for its position because both interpret

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policies that unambiguously limit coverage to injuries sustained by a patient of the insured
physician.
In Burka, 899 F.3d at 62, the First Circuit considered a policy construed by the district
court under the law of Maine regarding coverage for a claim against a physician who improperly
accessed his former wife’s medical records to use against her in their divorce. Referencing the
policy’s reliance on a doctor-patient relationship as an essential component of the confidentiality
obligation and noting that the wife was not the physician’s patient, the First Circuit affirmed the
interpretation that the applicable policy provision5 unambiguously provides coverage for a
confidentiality breach committed in the course of providing professional services to the
particular patient whose medical records are at issue. Id. at 66-70 (“The question is not whether
[the former wife] was a patient of any doctor at SMHC, but whether [the physician’s] alleged
mishandling of records stemmed from his own provision of healthcare services to her.”)
(emphasis in original). The ProAssurance Policy includes no analogous language limiting
coverage to the claims of breach of the duty owed “to that PATIENT.”
Similarly, Hayne, 145 So.3d at 1181-84, also involved a policy found to be unambiguous
in plainly providing coverage only for injuries “to a patient.” Because the claim arose from the
doctor’s testimony as a pathologist against the plaintiff, who was a criminal defendant, the court
noted that “[w]e are constrained to agree with [the insurer’s] position that [the claimant] cannot,
by any stretch of the imagination, be considered [the physician’s] patient.” Id. at 1182. The
Mississippi Supreme Court affirmed the grant of summary judgment in favor of the insurer. Id.
at 1184. The ProAssurance Policy includes no analogous limitation of covered claims to those
brought by patients.

Coverage for breach of the physician’s “obligation to maintain PATIENT confidentiality in the handling of
PATIENT records in the direct course of providing PROFESSIONAL SERVICES to that PATIENT.” Id. at 68.
5

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I find Records to be persuasive. Based on the plain meaning of “arising out of the
rendering of . . . professional services,” Records, 683 A.2d at 836, together with the absence of
words limiting coverage to the claims of patients, I conclude that the Policy was not intended to
be limited to suits by patients or suits narrowly based on the rendering of professional services.
See Porto, 811 A.2d at 1193-96; Mellow, 567 A.2d at 368. Accordingly, I recommend that the
Court declare that the Policy covers the claims asserted in the Valletta Complaint, the filing of
which triggered ProAssurance’s duty to defend and, potentially, to indemnify.
B.

Workers’ Compensation Exclusion

The words used in the workers’ compensation exclusion (Exclusion G) are not
ambiguous. They clearly provide that the Policy excludes from both the duty to defend and the
duty to indemnify “[a]ny obligation for which . . . any carrier as insurer may be held liable under
any workers’ compensation . . . law.” Policy at 6 (emphasis omitted). In this instance, the
Valletta Complaint alleges that Ms. Valletta’s injuries occurred in the course of her work as an
employee of RWMC; it is also undisputed that the workers’ compensation carrier as insurer for
RWMC, Ms. Valletta’s employer, was in fact liable under Rhode Island’s workers’
compensation law in connection with her personal injury “arising out of and in the course of . . .
her employment.” R.I. Gen. Laws § 28-33-1.
Under Rhode Island law, the obligations for which such a carrier may be liable include,
inter alia, the following: “any reasonable medical . . . treatment . . . for such period as is
necessary, in order to cure, rehabilitate or relieve the employee from the effects of his injury,”
R.I. Gen. Laws § 28-33-5; a specific weekly compensation for the period while the incapacity for
work is total or partial, R.I. Gen. Laws §§ 28-33-17(a), 28-33-18, 28-33-18.3; payment for
permanent total and partial disability, R.I. Gen. Laws § 28-33-17(b, f); and payments for

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dependents, R.I. Gen. Laws § 28-33-17(c). Several of these workers’ compensation obligations
squarely overlap with categories of damages claimed in the Valletta Complaint: for example, she
seeks recovery of “medical expenses,” “lost wages,” and “lost earning capacity.” Valletta
Compl. ¶¶ 8, 12, 19. Others do not overlap; that is, she claims damages based on “pain and
suffering” and “loss of enjoyment of life,” and a workers’ compensation insurer is liable for
neither of those types of damages.
Reading the words of the Policy, I find that ProAssurance excluded from the scope of
coverage any of Ms. Valletta’s damages that could be obligations of her employer’s workers’
compensation insurer. That is, whether or not the workers’ compensation carrier actually paid
such an element of damages, for any damages as to which it has such an obligation under Rhode
Island workers’ compensation law, ProAssurance is not obliged to defend Dr. McCullough
against Ms. Valletta’s suit to recover such damages, nor is it obliged to indemnify Dr.
McCullough by reimbursing him (or RWMC’s insurer on a claim for subrogation) for such
damages.
Dr. McCullough argues against the force of the Policy’s workers’ compensation
exclusion by focusing on a portion of the exclusion that is not in issue – the language excluding
coverage when the insured himself owes an obligation to the claimant under workers’
compensation law.6 He contends that Exclusion G does not apply because he was not Ms.
Valletta’s employer and the workers’ compensation carrier who may have been liable for her
workers’ compensation claim was not ProAssurance. He ignores the clarity of the next phrase,
connected by a disjunctive “or,” which plainly expands the exclusion to cover damages for

This provision states that there is an exclusion for “[a]ny obligation for which an insured . . . may be held liable
under any workers’ compensation . . . law.” Policy at 6 (emphasis in original). It is related to another exclusion: “F.
Injury to any employee of an insured unless arising from the treatment to the employee as a patient of such
insured.” Id.
6

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which “any [workers’ compensation] carrier as insurer may be held liable.” Policy at 6
(emphasis supplied). This phrase broadly references “any carrier”; it does not limit the scope of
the exclusion to a carrier providing workers’ compensation coverage for Dr. McCullough as
employer. To the contrary, Exclusion G unambiguously excludes coverage for obligations for
which any insurer may be liable under the workers’ compensation laws that are incurred in the
common situation where the physician is interacting with the employees of a hospital but is not
him/herself the employer. This understanding of Exclusion G accords with the wide breadth of
Policy coverage established by the definition of professional incident analyzed above. See
TravCo, 736 S.E.2d at 552 (“Each phrase and clause of an insurance contract should be
considered and construed together.”).
Ms. Valletta’s argument is equally inapt.7 Citing Sousa v. Town of Coventry, 774 A.2d
812, 815 (R.I. 2001), she contends that she is not bound by the policy exclusions because she
was not a party to the insurance contract. However, Sousa supports the opposite conclusion – it
dealt with a lease agreement between a town and a telecommunications company for the
construction of a tower and includes the contingent holding that “there is no support for the
proposition that . . . an individual who is not a party to a contract may assert the rights of one of
the contracting parties in order to void a contract or have it declared unenforceable.” Id. at 815
n.4. That is, if the ProAssurance Policy unambiguously fails to cover certain elements of Ms.
Valletta’s alleged damages, Sousa presents no basis in law for the Court to expand non-existent

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At the hearing, Ms. Valletta also argued that Exclusion G must be interpreted as if it were included in the Policy
for the exclusive purpose of preventing an insured like Dr. McCullough from trying to use the ProAssurance Policy
as a workers’ compensation policy. The problem with this argument is that the words used in Exclusion G do not
admit of such a narrow interpretation – they clearly reference the liability not just of some other insurer of Dr.
McCullough, but of “any carrier as insurer.” Even when strictly interpreted as required by Jackson, these words
cannot be tortured into meaning anything different from “any carrier as insurer.” 159 A.3d at 617 (“[W]hen
interpreting the provisions of an insurance policy, we look within the ‘four corners of [the] policy, viewing it in its
entirety, [and] affording its terms their plain, ordinary and usual meaning.’”).

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contractual rights. Relatedly, Ms. Valletta complains of ProAssurance’s delay in bringing the
declaratory judgment action. However, she fails to explain how such a delay affects the Court’s
interpretation of the plain language of the Policy.8
I recommend that the Court declare that Exclusion G voids any duty on the part of
ProAssurance to defend or potentially to indemnify Dr. McCullough, whether directly or by a
claim for subrogation, for any obligation to Ms. Valletta for which RWMC’s workers’
compensation carrier as insurer was or may have been liable pursuant to Rhode Island workers’
compensation laws, including without limitation claims for medical expenses, lost wages and
loss of earning capacity.
V.

CONCLUSION

Fairly read, I find that the Policy means that ProAssurance broadly covered all claims
arising from Dr. McCullough’s rendering of professional services, including those asserted in the
Valletta Complaint, but excluded coverage for elements of damages that are the obligation of a
workers’ compensation insurer, thereby protecting itself from defending and reimbursing Dr.
McCullough for such damages, as well as from paying based on a subrogation claim asserted by
RWMC’s workers’ compensation insurer. Accordingly, I recommend that the Court grant in part
and deny in part ProAssurance’s motion for summary judgment (ECF No. 11) and grant in part
and deny in part Dr. McCullough’s motion for summary judgment (ECF No. 15). If the Court
adopts this recommendation, all claims asserted in ProAssurance’s complaint will be determined
and final judgment may enter, terminating the action.

The Court notes that, in affording Dr. McCullough a defense, ProAssurance’s conduct is consistent with preferred
practices for insurance companies, which provide that “in situations in which a complaint even may allege facts that
fall under the insurance policy, insurance companies will often defend their insureds under a reservation of rights
while simultaneously or subsequently seeking a court’s declaration that no duty to defend actually exists.” Ciccone,
900 F. Supp. 2d at 263 (emphasis in original).
8

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Any objection to this report and recommendation must be specific and must be served
and filed with the Clerk of the Court within fourteen (14) days after its service on the objecting
party. See Fed. R. Civ. P. 72(b)(2); DRI LR Cv 72(d). Failure to file specific objections in a
timely manner constitutes waiver of the right to review by the district judge and the right to
appeal the Court’s decision. See United States v. Lugo Guerrero, 524 F.3d 5, 14 (1st Cir. 2008);
Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980).

/s/ Patricia A. Sullivan
PATRICIA A. SULLIVAN
United States Magistrate Judge
September 12, 2019

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