Westfield Insurance Company v. Matulis et al
Filing
141
MEMORANDUM OPINION AND ORDER granting Plaintiff's 113 MOTION for Summary Judgment as more fully set forth herein. Signed by Judge John T. Copenhaver, Jr. on 9/30/2019. (cc: attys; any unrepresented party) (lca)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
WESTFIELD INSURANCE COMPANY,
Plaintiff,
v.
Civil Action No. 2:17-cv-01269
STEVEN R. MATULIS, M.D.;
CHARLESTON GASTROENTEROLOGY
ASSOCIATES, P.L.L.C.; T.W.; K.H.;
T.F.; J.L.; A.G.; B.D.; A.H.;
A.M.; C.S.; and J.W.,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is plaintiff Westfield Insurance Company’s
(“Westfield”) motion for summary judgment, filed November 30,
2017.
I.
Background
Westfield filed this declaratory judgment action on
February 14, 2017, pursuant to 28 U.S.C. § 2201 and the West
Virginia Uniform Declaratory Judgments Act, W. Va. Code 55-13-1
et seq.
See Compl., ECF No. 1 (“Westfield Compl.”).
The court
has diversity jurisdiction over this matter pursuant to 28
U.S.C. § 1332.
Defendants Dr. Steven Matulis and his former
employer, Charleston Gastroenterology Associates, PLLC
(“Charleston Gastroenterology”), have been sued in the Circuit
Court of Kanawha County, West Virginia by several former female
patients. 1
Ten patients are joined here as claimant defendants
(“claimants”): T.W., K.H., T.F., J.L., A.G., B.D., A.H., A.M.,
C.S. and J.W.
See id. ¶¶ 4–13, 16.
These claimants are
identified by their initials for privacy reasons.
The state court lawsuits arise from medical procedures
(e.g., colonoscopies) that Dr. Matulis performed on the
claimants while each of them was anesthetized.
See id. ¶ 17.
The lawsuits allege that Dr. Matulis sexually assaulted the
claimants while they were under anesthesia and incapacitated,
and/or that Dr. Matulis performed the colonoscopies while
distracted or impaired due to his alleged proclivity for
sexually assaulting unconscious female patients, such that the
colonoscopies were not medically reliable or failed to meet the
standard of care owed by a doctor to a patient.
See id.
The facts giving rise to each alleged instance of
misconduct vary from claimant to claimant.
One or more of the
claimants allege that an employee or employees of the Charleston
Some state court lawsuits also list Day Surgery LLC (d/b/a Day
Surgery Center LLC) as a co-defendant alongside Dr. Matulis and
Charleston Gastroenterology. See, e.g., J.L.’s Compl., ECF No.,
113-3, Ex. C; J.W.’s Compl., ECF No. 134-1, Ex. 1. Claims
against Day Surgery LLC are not reviewed in this opinion because
Day Surgery LLC is not a named party in the action before this
court, and the insurance policy under consideration has not been
argued to apply to Day Surgery LLC.
1
2
Area Medical Center, Memorial Division, where their medical
procedures were performed, witnessed the sexual assault by Dr.
Matulis.
See id. ¶ 18.
One or more of the claimants also
allege that the employee or employees who witnessed the sexual
assault reported the incident to the hospital administration.
See id. ¶ 19.
The specific claims against Dr. Matulis include
battery, tort of outrage, intentional and negligent infliction
of emotional distress, false detention, invasion of privacy, and
medical negligence.
See, e.g., Pl.’s Mot. Summ. J., ECF No.
113-1 to ECF No. 113-11, Exs. A to K.
The claims against
Charleston Gastroenterology include negligent and reckless
retention, intentional and negligent infliction of emotional
distress, negligent supervision, invasion of privacy, and
vicarious liability for Dr. Matulis’s acts.
See, e.g., id.
In
addition, certain claimants assert class claims on behalf of
other female patients of Dr. Matulis who may not know whether
they were sexually assaulted or otherwise physically injured
during a medical procedure performed by Dr. Matulis.
T.F.’s Compl., ECF No. 113-10, Ex. J, ¶¶ 36–49.
See, e.g.,
Several
claimants have not yet initiated lawsuits in state court but
have filed a “Notice of Claim” to notify Dr. Matulis and
Charleston Gastroenterology of a potential medical malpractice
3
suit, as required by West Virginia Code § 55-7B-6(f).
See,
e.g., Pl.’s Mot. Summ. J., ECF 113-5 to ECF 113-8, Exs. E to H.
These Notices of Claim contain similar factual allegations found
in the complaints filed in state court.
Westfield provided a general commercial liability
insurance policy, Policy Number BOP 3157951 (“the Policy”), to
Charleston Gastroenterology for coverage from March 21, 2015
through March 21, 2016.
Westfield Compl., at 4–5.
All the
relevant incidents occurred during the time period of the
Policy. 2
See id.
The Policy provides liability coverage to “pay
those sums that the insured becomes legally obligated to pay as
The court notes that claimant A.G.’s claims arise from a
February 2015 incident with Dr. Matulis. A.G.’s Compl., ECF No.
113-11, Ex. K, ¶¶ 7–12; A.G.’s Resp., ECF No. 123, at 2, 4.
This falls before the period of coverage of the Policy. A.G.
raises the timing issue to oppose summary judgment by explaining
that “[i]t is not clear why [her] underlying complaint is even
included in Westfield’s declaratory judgment action.” See
A.G.’s Resp., ECF No. 123, at 4. A.G. argues against
Westfield’s “one-size-fits-all approach” to the claimants’
claims, but she does not raise her timing issue as the grounds
for a motion to dismiss. See id. Westfield does not object to
including A.G. in this case because it alleges that it provided
a policy to Charleston Gastroenterology for March 21, 2014
through March 21, 2015 with identical language to the Policy
here. See Combined Reply, at 15–16. The court finds that the
relevant sections on liability coverage in the two policies are
identical. See Policy, at 71–87; Combined Reply, ECF 124-1, Ex.
A, at 87–103. The policy numbers of the two are also identical:
Policy Number BOP 3157951. See Policy, at 1; Combined Reply,
ECF 124-1, Ex. A, at 1. The results reached in this opinion
would seem to be controlling for A.G.’s claims as reviewed by
the court.
2
4
damages because of” the following: (1) “bodily injury,” (2)
“property damage,” or (3) “personal and advertising injury.”
Pl.’s Mot. Summ. J., ECF 113-12, Ex. L (“Policy”), at 71
(Section II.A.1.a).
The Policy also provides that Westfield has
“the right and duty to defend the insured against any ‘suit’
seeking those damages.”
Id.
The Policy covers both Charleston
Gastroenterology and Dr. Matulis as an employee of Charleston
Gastroenterology “for acts within the scope of [his] employment
by [Charleston Gastroenterology] or while performing duties
related to the conduct of [Charleston Gastroenterology’s]
business.”
See id. at 82 (Section II.C.2.a). 3
The Policy applies to “bodily injury” and “property
damage” only if three requirements are satisfied, two of which
are particularly pertinent here: (1) the “bodily injury” or
“property damage” is “caused by an ‘occurrence’ that takes place
in the ‘coverage territory,’” and (2) the “bodily injury” or
It is undisputed that the Policy covers both Charleston
Gastroenterology and Dr. Matulis for the claims alleged by the
claimants.
3
5
“property damage” “occurs during the policy period.” 4
(Section II.A.1.b(1).
Id. at 71
“Bodily injury” is defined as “bodily
injury, sickness or disease sustained by a person, including
death.”
Id. at 85 (Section II.F.3).
“Occurrence” is defined as
“an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”
(Section II.F.13).
Id. at 86
The claimants did not allege property damage
claims in the state court lawsuits or the Notices of Claim, so
the court does not review further the relevant sections of the
Policy on “property damage.”
The Policy also covers “‘personal and advertising
injury’ caused by an offense” arising out of Charleston
Gastroenterology’s business only if the offense was committed in
the “coverage territory” during the Policy period.
(Section II.A.1.b(2)).
Id. at 72
“Personal and advertising injury” is
defined as “injury, including consequential ‘bodily injury’”
arising out of one or more enumerated offenses, including, inter
The third requirement is that no entity covered under the
Policy, or an employee of such entity authorized to give or
receive notice of an “occurrence” or claim, knew that the
“bodily injury” or “property damage” “had occurred, in whole or
in part” prior to the policy period. Policy, at 71 (Section
II.A.1.b(1)) (emphasis added). If the entity or employee knew
that the “bodily injury” or “property damage” occurred prior to
the policy, then “any continuation, change or resumption of such
‘bodily injury’ or ‘property damages’ during or after the policy
period will be deemed to have been known before the policy
period.” Id. (Section II.A.1.b(1)(c)).
4
6
alia: “[f]alse arrest, detention or imprisonment,” “[o]ral or
written publication, in any manner, of material that slanders or
libels a person,” and “[o]ral or written publication, in any
manner, of material that violates a person’s right of privacy.”
See id. at 87 (Section II.F.14) (emphasis added).
The Policy limits coverage based on three relevant
exclusions.
First, the “Expected or Intended Injury” exclusion
applies to “‘[b]odily injury’ or ‘property damage’ expected or
intended from the standpoint of the insured.”
(Section II.B.1.a).
Id. at 74
Second, the “Professional Services”
exclusion applies to “‘[b]odily injury’, ‘property damage’ or
‘personal and advertising injury’ caused by the rendering or
failure to render any professional service.”
II.B.1.j).
Id. at 76 (Section
“Professional services” include, inter alia,
“[m]edical, surgical, dental, X-ray or nursing services
treatment, advice or instruction,” and “[a]ny health or
therapeutic service treatment, advice or instruction.”
(Section II.B.1.j(4)–(5)).
Id.
The exclusion notably states that:
This exclusion applies even if the claims allege
negligence or other wrongdoing in the supervision,
hiring, employment, training or monitoring of others
by an insured, if the “occurrence” which caused the
“bodily injury” or “property damage”, or the offense
which caused the “personal and advertising injury”,
involved the rendering or failure to render of any
professional service.
7
Id. at 78 (Section II.B.1.j) (emphasis added).
Third and
final, the “Personal and Advertising Injury” exclusion
applies, inter alia, to any such injury “[c]aused by or at
the direction of the insured with the knowledge that the
act would violate the rights of another and would inflict
‘personal and advertising injury.’”
II.B.1.p(1)).
Id. at 79 (Section
Pursuant to the Policy, Westfield will not
pay medical expenses for “bodily injury” excluded from
coverage.
See id. at 79 (Section II.B.2.g).
Based on the Policy, Westfield filed this case seeking
a declaratory judgment that the Policy does not provide coverage
for the defense or indemnification of any of the claims asserted
by the claimants in state court in connection with the alleged
sexual assault and/or the provision of inadequate medical care
by Dr. Matulis.
See Westfield Compl., at 15.
Westfield also
asserts that the Policy does not provide coverage for the
defense or indemnification of any future related claims that
might be filed against Dr. Matulis or Charleston
Gastroenterology, including any class actions that may be
certified in any of the underlying state civil actions.
See id.
Finally, based on the lack of coverage, Westfield asserts that
it does not have a duty to defend or indemnify Dr. Matulis or
8
Charleston Gastroenterology in the existing state civil actions
or in related actions that might be brought.
See id. at 16.
Westfield filed the motion for summary judgment and a
memorandum of law in support on November 30, 2017.
See Pl.’s
Mot. Summ. J., ECF 113 (“Motion”); Pl.’s Memo. Supp. Mot. Summ.
J., ECF 114 (“Memo”).
Four claimants -- J.L., K.H., J.W., and
A.G. -- filed opposition briefs between December 14, 2017 and
December 20, 2017.
See J.L.’s Resp., ECF No. 120 (“J.L.’s
Resp.”); K.H.’s Memo. Oppos., ECF No. 121 (“K.H.’s Resp.”);
J.W.’s Resp., ECF No. 122 (“J.W.’s Resp.”); A.G.’s Resp., ECF
No. 123 (“A.G.’s Resp.”).
Westfield filed a combined reply on
December 21, 2017 to address the opposition briefs collectively.
See Pl.’s Combined Reply, ECF No. 124 (“Combined Reply”).
It is undisputed that both Dr. Matulis and Charleston
Gastroenterology are insured under the Policy and that the
claims arose from the coverage territory during the Policy
period.
However, neither Dr. Matulis nor Charleston
Gastroenterology has appeared in this action to oppose
Westfield’s position.
Pursuant to Rule 55(a) of the Federal
Rules of Civil Procedure, Westfield filed a motion for the entry
of default judgment against Dr. Matulis and Charleston
Gastroenterology on October 26, 2017.
J., ECF No. 95.
See Pl.’s Mot. Default
The court granted the motion and entered
9
default judgment against Dr. Matulis and Charleston
Gastroenterology on February 14, 2018.
See Order, ECF No. 128.
Soon after, claimant J.W. filed a civil action in the
Circuit Court of Kanawha County on March 1, 2018 (civil case no.
18-c-205).
See J.W.’s Compl., ECF No. 134-1, Ex. 1.
On March
8, 2018, J.W. filed a motion for leave to amend her answer in
this case to assert a counterclaim for declaratory judgment
against Westfield, pursuant to Rule 15(a)(2) of the Federal
Fules of Civil Procedure and Rule 16.1(f)(1) of the Local Rules
of Civil Procedure for the United States District Court for the
Southern District of West Virginia.
Am. Answer, ECF No. 134.
See Def. J.W.’s Mot. Leave
J.W.’s motion seeks a declaratory
judgment finding that the Policy “provides coverage for some
claims asserted by J.W.” against Dr. Matulis and Charleston
Gastroenterology in her state court lawsuit.
Def. J.W.’s Am.
Answer, ECF No. 134-2, Ex. 2, at 10.
II.
A.
Legal Standard
Summary judgment.
A party is entitled to summary judgment “if the
pleadings, the discovery and disclosure materials on file, and
any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a
matter of law.”
Fed. R. Civ. P. 56(c).
10
Material facts are
those necessary to establish the elements of a party’s cause of
action.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
B.
Leave to amend answer.
Under Rule 15(a) of the Federal Rules of Civil
Procedure, the court “should freely give leave [to amend] when
justice so requires.”
Alternatively, under Rule 15(d) of the
Federal Rules of Civil Procedure, the court “may, on just terms,
permit a party to serve a supplemental pleading setting out any
transaction, occurrence, or event that happened after the date
of the pleading to be supplemented.”
Rule 16(b) of the Federal
Rules of Civil Procedure directs that “a schedule may be
modified only for good cause.”
Similarly, Rule 16(f)(1) of the
Local Rules of Civil Procedure for the Southern District of West
Virginia permits amendments to pleadings “for good cause.”
J.W.’s motion for leave to amend her answer to assert
a counterclaim for declaratory judgment against Westfield is
based on J.W.’s filed complaint in the Circuit Court of Kanawha
County, which she filed well after briefings had completed on
Westfield’s motion for summary judgment.
No. 134-1, Ex. 1.
See J.W.’s Compl., ECF
The court takes notice of A.G.’s filed
complaint in state court.
The claims that J.W. alleges in her
complaint are fully considered by the court in this opinion as
11
they are identical to claims alleged by other claimants,
including violation of the right of privacy; false detention;
medical negligence; negligent hiring, retention, and
supervision; negligent infliction of emotional distress; and
battery.
See id. ¶¶ 14–31.
Inasmuch as these claims are
already considered, leave to amend on this basis is futile and
the court does not find good cause to allow the amendment.
J.W.’s complaint also raises an additional claim from
J.W.’s husband, alleging that the husband “has been deprived of
the consortium, society and comfort of his wife” such that he
has suffered and will continue to suffer mental anguish.
¶ 33.
Id.
J.W. listed her husband as a potential claimant in her
Notice of Claims against Dr. Matulis and Charleston
Gastroenterology.
See J.W.’s Notice of Claim, ECF 115-1, Ex. M
(against Dr. Matulis); J.W.’s Notice of Claim, ECF 115-2, Ex. N
(against Charleston Gastroenterology).
However, the listing of
this additional “claimant” does not change the court’s analysis
or conclusion regarding summary judgment because the husband’s
claim arises from the same conduct as J.W.’s claim.
III. Discussion
In cases grounded in diversity jurisdiction, “federal
courts are to apply the substantive law the State in which they
are sitting would apply if the case had originated in a State
12
court.”
Stonehocker v. Gen. Motors Corp., 587 F.2d 151, 154
(4th Cir. 1978) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64,
78 (1938)).
Under West Virginia law, “[d]etermination of the
proper coverage of an insurance contract when the facts are not
in dispute is a question of law.”
Syl. Pt. 1, Tennant v.
Smallwood, 568 S.E.2d 10, 11 (W. Va. 2002).
Language in an insurance policy should be given its
“plain, ordinary meaning.”
Syl. Pt. 8, Cherrington v. Erie Ins.
Prop. & Cas. Co., 745 S.E.2d 508, 511 (W. Va. 2013) (citation
omitted).
“The interpretation of an insurance contract,
including the question of whether the contract is ambiguous, is
a legal determination . . . .”
Syl. Pt. 2, Riffe v. Home
Finders Assocs., Inc., 517 S.E.2d 313, 314 (W. Va. 1999); see
also Syl. Pt. 4, W. Virginia Fire & Cas. Co. v. Stanley, 602
S.E.2d 483, 486 (W. Va. 2004) (“The question as to whether a
contract is ambiguous is a question of law to be determined by
the court.”).
“Where the provisions of an insurance policy
contract are clear and unambiguous they are not subject to
judicial construction or interpretation, but full effect will be
given to the plain meaning intended.”
Syl. Pt. 1, Christopher
v. U.S. Life Ins. Co. in City of New York, 116 S.E.2d 864, 864
(W. Va. 1960); see also Glen Falls Ins. Co v. Smith, 617 S.E.2d
760, 767–68 (W. Va. 2005).
However, an insurance contract is
13
ambiguous if “reasonable people can differ about the meaning.”
Syl. Pt. 1, D'Annunzio v. Sec.-Connecticut Life Ins. Co., 410
S.E.2d 275, 276 (W. Va. 1991).
favor of the insured.
All ambiguities are construed in
Id.; see also Horace Mann Ins. Co. v.
Leeber, 376 S.E.2d 581, 584 (W. Va. 1988) (“. . . any ambiguity
in the language of an insurance policy is to be construed
liberally in favor of the insured.”).
“An insurance policy
should never be interpreted so as to create an absurd result,
but instead should receive a reasonable interpretation,
consistent with the intent of the parties.”
Syl. Pt. 2,
D'Annunzio, 410 S.E.2d at 276.
Liability insurance under West Virginia law creates
two duties for the insurer: a duty to defend and a duty to
provide coverage (i.e., to indemnify).
See Aetna Cas. & Sur.
Co. v. Pitrolo, 342 S.E.2d 156, 160 (W. Va. 1986).
Generally,
an insurer's duty to defend is broader than the duty to
indemnify.
Leeber, 376 S.E.2d at 584; Donnelly v.
Transportation Ins. Co., 589 F.2d 761, 765 (4th Cir. 1978).
An
insurer must defend its insured “if the claim stated in the
underlying complaint could, without amendment, impose liability
for risks the policy covers.”
Bowyer v. Hi-Lad, Inc., 609
S.E.2d 895, 912 (W. Va. 2004); see also Pitrolo, 342 S.E.2d at
160 (“As a general rule, an insurer's duty to defend is tested
14
by whether the allegations in the plaintiff's complaint are
reasonably susceptible of an interpretation that the claim may
be covered by the terms of the insurance policy.”).
An insurer
must look beyond the bare allegations contained in the pleadings
and “conduct a reasonable inquiry into the facts in order to
ascertain whether the claims asserted may come within the scope
of the coverage that the insurer is obligated to provide.”
Syl.
Pt. 6, Farmers & Mechs. Mut. Ins. Co. v. Cook, 557 S.E.2d 801,
803 (W. Va. 2001) (citation omitted).
For the duty to defend to
arise, “[t]here is no requirement that the facts alleged in the
complaint specifically and unequivocally make out a claim within
the coverage.”
Pitrolo, 342 S.E.2d at 160 (citation omitted);
see also Leeber, 376 S.E.2d at 584.
An insurer must defend all
the claims “[i]f part of the claims against an insured fall
within the coverage of a liability insurance policy and part do
not.”
Leeber, 376 S.E.2d at 584 (citing Donnelly, 589 F.2d at
765).
However, the insurer is not required to defend a case
against the insured “if the alleged conduct is entirely foreign
to the risk insured against.”
Id.
A court must liberally construe any questions
regarding an insurer's duty to defend in favor of the insured.
See Pitrolo, 342 S.E.2d at 160.
Furthermore, “[w]here the
policy language involved is exclusionary, it will be strictly
15
construed against the insurer in order that the purpose of
providing indemnity not be defeated.”
Syl. Pt. 4, Cook, 557
S.E.2d at 803 (citation omitted).
A.
Claims for the intentional sexual misconduct of Dr.
Matulis.
Several claimants allege the intentional tort of
battery for having suffered bodily injury as a result of being
sexually assaulted by Dr. Matulis during their respective
medical procedures. 5
See, e.g., T.W.’s Am. Compl., ECF No. 113-
2, Ex. B, ¶¶ 5–12; J.L.’s Compl., ECF No. 113-3, Ex. C, ¶¶ 19–
23; K.H.’s Compl., ECF No. 113-4, Ex. D, ¶ 8; B.D.’s Notice of
Claim, ECF No. 113-6, Ex. F, at 2.
For these claims to be
covered under the Policy, the claims of bodily injury must have
been caused by an “occurrence” that took place in the “coverage
territory,” during the period of the Policy coverage, and was
not known to have occurred before the Policy period.
Policy, at 71 (Section II.A.1.b(1)).
See
It is undisputed that the
claims of bodily injury took place in the “coverage territory”
during the Policy period and were not known before the Policy
J.L. argues that “bodily injury” is a vague term in the Policy
and that it should be construed against the insurer. J.L.’s
Resp., at 4. However, there is no dispute that the claimants
suffered bodily injury in these cases.
5
16
period.
The court therefore considers whether the conduct
giving rise to the claims is an “occurrence.”
The Policy defines an “occurrence” as “an accident,
including continuous or repeated exposure to substantially the
same general harmful conditions.”
Id. at 86 (Section II.F.13).
The Policy does not define “accident.”
In another case in which
the insurance policy at issue had the same definition of
“occurrence,” the Supreme Court of Appeals of West Virginia
noted the following definition for “accident”:
[a]n ‘accident’ generally means an unusual,
unexpected and unforeseen event.... An accident
is never present when a deliberate act is
performed unless some additional unexpected,
independent and unforeseen happening occurs which
produces the damage.... To be an accident, both
the means and the result must be unforeseen,
involuntary, unexpected, and unusual.
State Bancorp, Inc. v. U.S. Fid. & Guar. Ins. Co., 483 S.E.2d
228, 234 (W. Va. 1997) (per curiam) (citations omitted)
(alteration in original); see also Columbia Cas. Co. v.
Westfield Ins. Co., 617 S.E.2d 797, 800 (W. Va. 2005) (applying
this definition of “accident”).
“[T]he definition of an
‘occurrence’ does not include actions which are intended by the
insured.”
original).
State Bancorp, 483 S.E.2d at 235 (emphasis in
Based on these definitions, the court in State
Bancorp found that the intentional acts of the insured -- tort
of outrage, tort of civil conspiracy, and violation of state
17
banking laws -- were not “accidents” and therefore were not
covered under the insurance policy.
See id. at 236.
With respect to sexual misconduct, the Supreme Court
of Appeals has also found that “[i]n an insurance liability
policy, a claim based on sexual harassment does not come within
the definition of ‘occurrence,’ which is defined as ‘an
accident, including continuous or repeated exposure to
substantially the same general harmful conditions.’”
Syl. Pt.
2, Smith v. Animal Urgent Care, Inc., 542 S.E.2d 827, 828 (W.
Va. 2000).
“Under an intentional acts exclusion, a policyholder
may be denied coverage only if the policyholder (1) committed an
intentional act and (2) expected or intended the specific
resulting damage.”
Syl. Pt. 7, Cook, 557 S.E.2d at 803
(emphasis in original).
With regard to sexual misconduct, the
Supreme Court of Appeals has held that:
There is neither a duty to defend an insured in
an action for, nor a duty to pay for, damages
allegedly caused by the sexual misconduct of an
insured, when the liability insurance policy
contains a so-called “intentional injury”
exclusion. In such a case the intent of an
insured to cause some injury will be inferred as
a matter of law.
Syl., Leeber, 376 S.E.2d at 582.
The Supreme Court of Appeals
echoed this holding in Dotts v. Taressa J.A. to conclude that
18
“language in a motor vehicle liability insurance policy defining
‘accident’ to include ‘bodily injury or property damage the
insured neither expected or intended’ is generally designed to
exclude coverage for an intentional tort such as sexual
assault.”
390 S.E.2d 568, 570–71 (W. Va. 1990).
Westfield contends that there is no coverage for
allegations of sexual assault against Dr. Matulis or Charleston
Gastroenterology because Dr. Matulis’s acts were voluntary and
intentional, and therefore they cannot be considered an
accident.
See Memo, at 17–18.
Furthermore, Westfield asserts
that the “Expected or Intended Injury” exclusion precludes
coverage because such allegations of sexual misconduct fall
squarely within the exclusion as recognized by the Supreme Court
of Appeals in Leeber.
See id.
Claimants J.L., K.H., and J.W.
argue in response that whether the “Expected or Intended Injury”
exclusion applies hinges, not on whether Dr. Matulis intended
the acts, but on whether the acts were an “occurrence” from the
perspective of, or intended by, Charleston Gastroenterology and
its other employees.
See J.L.’s Resp., at 4–5; K.H.’s Resp., at
2; J.W.’s Resp., at 11–12.
In Columbia Casualty Co. v. Westfield Insurance Co.,
the Supreme Court of Appeals considered the perspective from
which to determine liability coverage for an “occurrence.”
19
617
S.E.2d 797 (W. Va. 2005).
The court considered whether the
suicide deaths of two inmates housed in the county jail were
“occurrences” 6 under the general liability insurance policy
issued to the county commission.
Id. at 798.
The insurance
company argued that the suicide deaths were not “occurrences”
because “the suicidal person deliberately intended his or her
own death.”
Id. at 799.
The court articulated the following
principle:
In determining whether under a liability
insurance policy an occurrence was or was not an
“accident” —- or was or was not deliberate,
intentional, expected, desired, or foreseen —primary consideration, relevance, and weight
should ordinarily be given to the perspective or
standpoint of the insured whose coverage under
the policy is at issue.
Id. at 797; see also Cherrington, 745 S.E.2d at 520 (applying
this principle).
The court found that “from the perspective or
standpoint of the insured [i.e., the county commission] . . .
the inmates’ deaths by suicide were not deliberate, intentional,
expected, desired, or foreseen by the [the insured] . . . . [I]t
must be concluded that the deaths were ‘accidents’ and thus
‘occurrences’ under the policy language in question.”
Columbia
Cas. Co., 617 S.E.2d at 801.
The insurance policy used the same definition for “occurrence”
as the Policy here. See Columbia Cas. Co., 617 S.E.2d at 799.
6
20
The language of “expected or intended from the
standpoint of the insured” is already part of the “Expected or
Intended Injury” exclusion of the Policy.
The court in Columbia
Casualty merely distinguished the standpoint of the insured from
those not covered by the insurance policy (i.e., the inmates).
The instant case is analogous to Smith in which Animal Urgent
Care and one of its employees, Dr. Yurko, were both insured
under the same general commercial liability policy.
at 828.
542 S.E.2d
Another employee, Ms. Smith, alleged that Dr. Yurko
sexually harassed her, and she consequently filed suit against
both Animal Urgent Care and Dr. Yurko.
Id.
The court held that
there was no duty on the part of the insurance company to defend
or indemnify Animal Urgent Care or Dr. Yurko because Dr. Yurko’s
sexual misconduct was deemed not to have been an “occurrence”
and fell within the insurance policy’s intentional acts
exclusion, whereunder the policy provided that “[t]his insurance
does not apply to . . . ‘[b]odily injury’ . . . expected or
intended from the standpoint of the insured.”
See id. at 831–
34.
Similar to the instant case, the Supreme Court of
Appeals in Smith was presented with a circumstance in which the
sexual misconduct of one insured, Dr. Yurko, was surely not
intended from the standpoint of the other insured, Animal Urgent
21
Care.
The court did not parse the standpoints of the various
insureds as the claimants here now urge the court to do.
The
court reviewed the conduct of the insured actor who committed
the offense and found that it was not accidental and therefore
not an “occurrence.”
Thus, there was no coverage for any
insured, notwithstanding the allegation of negligence on the
part of the employer, Animal Urgent Care.
assaults are the crux of the matter.
Here, intentional
Applying the claimants’
reading of “from the standpoint of the insured” now to include
all insured entities under the Policy would produce an absurd
result.
See Syl. Pt. 2, D'Annunzio, 410 S.E.2d at 276 (“. . .
an insurance policy should never be interpreted so as to create
an absurd result . . . .”).
Based on the foregoing, the claims of sexual
misconduct on the part of Dr. Matulis are not covered under the
Policy as against Dr. Matulis or Charleston Gastroenterology.
B.
Claims for other intentional torts.
Several claimants allege other intentional torts
against Dr. Matulis and Charleston Gastroenterology, including
22
tort of outrage, 7 intentional and negligent infliction of
emotional distress, false detention, and invasion of privacy.
Unlike the allegations of sexual assault, these torts did not
result in bodily injury.
J.L., T.W., and J.W. allege that they
suffered emotional distress as a result of Dr. Matulis and
Charleston Gastroenterology’s intentional or reckless acts.
See, e.g., T.W.’s Am. Compl., ECF No. 113-2, Ex. B, ¶ 20; J.L.’s
Compl., ECF No. 113-3, Ex. C, ¶¶ 42–46; J.W.’s Compl., ECF No.
134-1, Ex. 1, ¶¶ 27–28.
J.W. alleges that Dr. Matulis and
Charleston Gastroenterology improperly detained her or
contributed to her detention “for a purpose unrelated to a
professional service, medical, surgery procedure, treatment, or
healthcare.” 8
Id. ¶ 20.
Similarly, J.L. argues that her
pleadings “can be interpreted to include false detention” and
that she believes Dr. Matulis violated her right to privacy by
making an oral publication about her body while she was under
anesthesia.
J.L.’s Resp., at 5-6.
J.L.’s complaint does not
Under West Virginia law, the tort of outrage is also known as
intentional infliction of emotional distress. See Camden-Clark
Mem'l Hosp. Corp. v. Tuan Nguyen, 807 S.E.2d 747, 753 n.15 (W.
Va. 2017); Whitehair v. Highland Memory Gardens, Inc., 327
S.E.2d 438, 440 (W. Va. 1985).
7
In J.W.’s response, she argues that the court does not have
enough facts to determine that claims she might potentially
bring, such as slander or libel, would not be covered by the
Policy. J.W.’s Resp., ECF No. 122, at 9. The court, however,
addresses the claims J.W. asserts in her complaint rather than
hypothetical claims raised in J.W.’s response.
8
23
expressly include these allegations or causes of action. See
J.L.’s Compl., ECF No. 113-3, Ex. C.
J.W. also asserts in her lawsuit that the defendants
did not inform the authorities or herself about Dr. Matulis’s
“improper and negligent acts,” but instead provided her and the
public with inaccurate information, which violated her right to
privacy.
J.W.’s Compl., ECF No. 134-1, Ex. 1, ¶¶ 14–17, 27–28. 9
Although A.G. is uncertain as to whether Dr. Matulis assaulted
her during her procedure, she claims that Dr. Matulis invaded
her privacy inasmuch as she did not consent to have medical
procedures performed by a physician with professional
impairments.
A.G.’s Compl., ECF No. 113-11, Ex. K, ¶¶ 24–26.
A.G. also asserts claims in her state court case on behalf of a
potential class of female patients who may have suffered nonphysical harm as a result of Dr. Matulis’s conduct.
Id. ¶¶ 33–
46; A.G.’s Resp., at 9–10.
Westfield contends that since these claims involve
either the intentional conduct of Dr. Matulis or the rendering
of professional services, they are exempt from coverage under
the Policy exclusions.
See Combined Reply, at 14–15; Pl.’s
J.W. attached her state court complaint to her motion for leave
to amend her answer to include a counterclaim for declaratory
judgment. See J.W.’s Compl., ECF No. 134-1, Ex. 1.
9
24
Resp. J.W.’s Mot. Leave Am. Answer, ECF No. 136, at 6–7.
In
distinguishing “bodily injury” from “personal injury,” the
Supreme Court of Appeals has held that:
It is well settled in insurance law that “bodily
injury” and “personal injury” are not synonyms and
that these phrases have two distinct definitions. The
term “personal injury” is broader and includes not
only physical injury but also any affront or insult to
the reputation or sensibilities of a person. “Bodily
injury,” by comparison, is a narrow term and
encompasses only physical injuries to the body and the
consequences thereof.
Smith, 542 S.E.2d at 831 (internal quotations and citations
omitted).
Since these intentional torts do not involve bodily
injury, the “Expected or Intended Injury” exclusion is not
applicable.
The court instead interprets these claims to be
alleging “personal injury” within the category of “personal and
advertising injury.”
The “Professional Services” exclusion of the Policy
excludes “personal injuries” from coverage that are “caused by
the rendering or failure to render any professional service.”
See Policy, at 76, 78.
“The term ‘professional services’
contained in a commercial general liability policy, when not
otherwise specifically defined, denotes those services rendered
by someone with particularized knowledge or skill in his or her
chosen field.”
Syl. Pt. 1, Boggs v. Camden-Clark Mem’l Hosp.
Corp., 693 S.E.2d 53, 55 (W. Va. 2010).
25
The Policy lists
several types of “professional services,” including “[m]edical,
surgical, dental, X-ray or nursing services treatment, advice or
instruction.”
Id. at 76.
The colonoscopies and other medical
procedures that Dr. Matulis performed on the claimants fall
squarely within “[m]edical, surgical . . . services.”
See id.
The “Personal and Advertising Injury” exclusion of the
Policy excludes coverage for “personal injuries” “[c]aused by or
at the direction of the insured with the knowledge that the act
would violate the rights of another and would inflict ‘personal
and advertising injury.’”
Id. at 79 (emphasis added).
A.G. supports her claim that coverage for the personal
injury of invasion of privacy not grounded in sexual misconduct
is covered under the Policy by citing Tackett v. American
Motorists Insurance Co., a case before the Supreme Court of
Appeals.
See A.G.’s Resp., at 9–10 (citing 584 S.E.2d 158 (W.
Va. 2003)).
In Tackett, an employee of the retail store
Gadzooks, Inc. sexually harassed a young woman while she was
shopping at the store.
584 S.E.2d at 160–61.
Gadzooks was
insured under a commercial general liability policy.
Id.
The
allegations in the woman’s complaint did not assert “bodily
injury,” which would have been excluded from coverage under the
intentional act exclusion of the policy, but rather asserted
claims for “personal injury,” which the Supreme Court of Appeals
26
found were not excluded from coverage. 10
Id. at 166–68.
A.G.’s
claims of emotional distress caused by invasions of privacy not
grounded in sexual misconduct are based on the medical
procedures performed by the “impaired” Dr. Matulis.
These
claims are clearly within the “Professional Services” exclusion.
Similarly, the false detention claims are “personal
injuries” caused by the false detention of claimants undergoing
professional medical services.
These claims are also excluded
from coverage under the “Professional Services” exclusion.
See,
e.g., J.L.’s Compl., ECF No., 113-3, Ex. C, ¶ 18 (“On October
16, 2015, Plaintiff presented to Day Surgery Center for an
esophagogastroduodenoscopy procedure to be performed by Dr.
Matulis . . . .”) (emphasis added); J.W.’s Compl., ECF No. 1341, Ex. 1, ¶ 6 (“In May, 2015, the Plaintiff was a patient of Dr.
Matulis . . . . She was admitted as an outpatient to the Day
Surgery Center for a routine colonoscopy.”) (emphasis added).
In considering the invasion of privacy claims made by
T.W., J.L. and J.W., all of whom allege to have been assaulted
The only pertinent exclusion for personal injury in the
Tackett policy concerned slander: “[t]his insurance does not
apply to . . . ‘[p]ersonal injury’ . . . [a]rising out of oral
. . . publication of material, if done by or at the direction of
the insured with knowledge of its falsity.” 584 S.E.2d at 167
(alterations in original). The Policy in the instant case has a
somewhat similar exclusion for slander. See Policy, at 79
(Section II.B.1.p(2)).
10
27
by Dr. Matulis, the court considers the decision of the United
States District Court for the Northern District of West Virginia
in Erie Insurance Property & Casualty Company, Inc. v. Edmond.
785 F. Supp. 2d 561 (N.D.W. Va. 2011).
In Edmond, an insurance
provider filed a declaratory judgment action to determine if
there were a duty to defend the insured defendants in the
underlying state court action.
Id. at 563.
The state court
action alleged certain torts including, inter alia, intentional
or negligent infliction of emotional distress, false
imprisonment, invasion of privacy, and creating a hostile work
environment through sexual harassment.
Id.
The insurance
policy included an exclusion for “Knowing Violation of Rights of
Another,” in which coverage is not provided for “‘[p]ersonal and
advertising injury’ caused by or at the direction of the insured
with the knowledge that the act would violate the rights of
another and would inflict ‘personal and advertising injury.’”
Id. at 568.
The court noted that:
Importantly, under West Virginia law, a
defendant's intent to cause injury to another
“will be implied as a matter of law in instances
of sexual misconduct,” including “allegations of
sexual harassment.” . . . Thus, if the claims of
“false imprisonment” and “invasion of privacy”
alleged in the underlying complaint are
predicated on instances of sexual misconduct or
harassment by Mr. Edmond, the “knowing violation
of rights of another” exclusion would apply and
extinguish Erie's duty to defend.
28
Id. at 568–69 (quoting Smith, 542 S.E.2d at 832–33).
Ultimately, the court found that “[t]he allegations of ‘false
imprisonment’ and ‘invasion of privacy’ [were] sufficiently
based on Mr. Edmond's alleged sexual misconduct and harassment
to imply the fact that he acted intentionally and with knowledge
that his actions ‘would violate the rights of another.’”
Id. at
569.
The Edmond policy and the Policy here share the
identical definition for “personal and advertising injury.”
id. at 567; Policy, at 87 (Section II.F.14).
See
The “Knowing
Violation of Rights of Another” exclusion in Edmond is also
identical to the first part of the “Personal and Advertising
Injury” exclusion in the Policy here.
See Edmond, 785 F. Supp.
2d at 568; Policy, at 79 (Section II.B.1.p(1)).
The allegations
in T.W., J.W. and J.L.’s pleadings demonstrate that their
invasion of privacy claims are rooted in Dr. Matulis’s sexual
misconduct.
See J.W.’s Compl., ECF No. 134-1, Ex. 1, ¶ 10
(“Plaintiffs were contacted by law enforcement personnel and
were told that Dr. Matulis had engaged in . . . sexual
misconduct during the December 2015 surgical procedure.”);
J.L.’s Compl. ECF No. 113-3, Ex. C, ¶ 20 (“Without her knowledge
or consent, and while Plaintiff was under anesthesia and
incapacitated, Defendant Dr. Matulis placed his hands upon her,
29
upon or inside her hospital gown, and pulled away her hospital
gown for the purpose of ogling and/or fondling her breasts.”);
T.W.’s Am. Compl., ECF No. 113-2, Ex. B, ¶¶ 8–9 (asserting that
during her colonoscopy, while she was under anesthesia and
incapacitated, Dr. Matulis fondled her breasts and “used his
fingers to repeatedly penetrate her vagina.”).
The court finds that these invasion of privacy claims
are “unambiguously root[ed] in [the insured’s] alleged sexual
misconduct” and infers intent to cause personal injury on the
part of Dr. Matulis. 11
See Edmond, 785 F. Supp. 2d at 569.
Accordingly, the “Personal and Advertising Injury” exclusion in
the Policy applies to the invasion of privacy claims grounded in
the sexual misconduct of Dr. Matulis and excludes coverage.
C.
Claims of medical malpractice and medical negligence.
Several claimants either allege medical negligence or
malpractice, or have submitted a “Notice of Claim” to notify Dr.
Matulis and Charleston Gastroenterology that they failed to meet
the standard of care owed to the claimants as medical patients.
See, e.g., B.D.’s Notice of Claim, ECF No. 113-6, Ex. F, at 1–2;
A.H.’s Notice of Claim, ECF No. 113-7, Ex. G, at 1–2; A.G.’s
The same reasoning applies to support the exclusion of the
false detention claims which the court has already found to be
excluded from coverage of the Policy under the “Professional
Services” exclusion.
11
30
Compl., ECF No. 113-11, Ex. K, ¶¶ 15–23.
A.G. specifically
contends that based on Dr. Matulis’s impairment -- his
propensity to assault female patients while performing
colonoscopies -- she was injured because “she could not receive
a competent colonoscopy from Matulis due to his impairment.”
A.G.’s Resp., at 6.
Claims alleging medical negligence clearly arise from
the doctor-patient relationship between the claimant and Dr.
Matulis.
As previously discussed, the “Professional Services”
exclusion in the Policy here applies to “bodily injury” and
“personal and advertising injury” “caused by the rendering or
failure to render any professional service,” including
“[m]edical, surgical . . . services treatment, advice or
instruction.”
Policy, at 76 (Section II.B.1.j(4)). This
exclusion even extends to claims of “negligence or other
wrongdoing in the supervision, hiring, employment, training or
monitoring of others” if the injury arose from the “rendering or
failure to render of any professional service.”
See id. at 78.
Regardless of the title of the claim asserted against
Dr. Matulis or Charleston Gastroenterology, all claims sounding
in medical negligence (i.e., claims that Dr. Matulis did not
meet the standard of care required in performing colonoscopies
and related procedures) are excluded from coverage under the
31
Policy pursuant to the “Professional Services” exclusion.
When
considering “professional services” exclusions in commercial
general liability policies, the Supreme Court of Appeals of West
Virginia has noted that:
The inclusion in a standard commercial general
liability policy of language that excludes coverage
for “professional liability” is specifically designed
to shift the risk of liability for claims arising in
connection with the performance of professional
services away from the insurance carrier and onto the
professional. Professionals wishing to insure
themselves against the risk of liability in connection
with the rendering of their professional services may
opt to purchase separate insurance coverage, known as
an errors and omissions policy.
Webster Cty. Solid Waste Auth. v. Brackenrich & Assocs., Inc.,
617 S.E.2d 851, 858 (W. Va. 2005), overruled on other grounds
by, Cherrington, 745 S.E.2d 508 (finding that defective
workmanship causing bodily injury or property damage constitutes
an “occurrence” under a commercial general liability policy).
Therefore, any claims against Charleston Gastroenterology
related to Dr. Matulis’s alleged medical negligence or
malpractice are also excluded from coverage under the Policy.
D.
Claims against Charleston Gastroenterology sounding in
negligence.
Some claimants allege claims against Charleston
Gastroenterology for negligently supervising Dr. Matulis or for
negligently retaining him after they allegedly became aware that
he was sexually assaulting and/or harassing female patients.
32
See J.L.’s Resp., 2, 7–8; K.H’s Resp., at 2; J.W.’s Resp., at 9–
10; A.G.’s Resp., at 6–7; J.W.’s Compl., ECF No. 134-1, Ex. 1,
¶¶ 22–26.
Westfield contends that the “Professional Services”
exclusion applies to each of these claims because they all arise
out of a doctor-patient relationship between Dr. Matulis and the
claimant in the performance of a medical procedure.
19.
Memo, at
Again, the Policy specifically states that:
[The “Professional Services”] exclusion applies even
if the claims allege negligence or other wrongdoing in
the supervision, hiring, employment, training or
monitoring of others by an insured, if the
“occurrence” which caused the “bodily injury” . . . or
the offense which caused the “personal and advertising
injury”, involved the rendering or failure to render
of any professional service.
Policy, at 78 (emphasis added).
Westfield further argues that the claimants’ pleadings
of negligence cannot create coverage under the Policy where it
would not otherwise exist by virtue of an intentional act
exclusion.
Id. at 19–20 (quoting Smith, 542 S.E.2d at 834
(“[T]he inclusion of negligence-type allegations in a complaint
that is at its essence a sexual harassment claim will not
prevent the operation of an ‘intentional acts’ exclusion
contained in an insurance liability policy which is defined as
excluding ‘bodily injury’ ‘expected or intended from the
standpoint of the insured.’”)).
33
The responding claimants offer differing arguments in
support of their contentions for coverage under the Policy for
claims of negligent retention and supervision against Charleston
Gastroenterology.
J.L. contends that she “clearly pleaded
negligence counts separate from the actions of Matulis,” J.L.’s
Resp., at 8, and that “[c]ourts in West Virginia recognize
negligent retention and supervision of an employee as an
independent cause of action,” id. at 7 (quoting Charleston Area
Med. Ctr., Inc. v. Nat'l Union Fire Ins., No. 2:09-CV-00573,
2011 WL 2161534, at *6 (S.D.W. Va. June 1, 2011)). 12
In
particular, she argues that negligence on the part of other
Charleston Gastroenterology employees pertaining to Charleston
Gastroenterology’s negligent retention or failure to supervise
Matulis was not a medical service to which the “Professional
Services” exclusion would apply.
See id. at 9–11.
Similarly,
K.H. responds that she had specifically pled negligence causes
of action against Charleston Gastroenterology, and that these
claims are covered under the Policy.
See K.H.’s Resp., at 2.
The court notes that J.L. cites other jurisdictions in support
of her contention that negligent supervision should not be
excluded under intentional acts or professional services
exclusions because the supervision was independent from claims
of sexual assault. See J.L.’s Resp., at 7–8, 11–12. However,
the court is guided, as is required, by the laws of West
Virginia.
12
34
J.W.’s response alleges that claims against Charleston
Gastroenterology for negligently retaining and/or supervising
Dr. Matulis might be covered under the Policy.
Resp., at 9–10, 12.
See J.W.’s
J.W. later formally included these claims
in her complaint in the Circuit Court of Kanawha County.
J.W.’s Compl., ECF No. 134-1, Ex. 1, ¶¶ 22–26.
See
She asserts that
these administrative failures, occurring before her doctorpatient relationship began with Dr. Matulis, were the cause of
her injury.
See id. at 14.
Similarly, A.G. notes that Dr.
Matulis’s impairment, and Charleston Gastroenterology’s
knowledge thereof long preceded her doctor-patient relationship
with Dr. Matulis, and therefore the negligence occurred before
any medical service was provided.
See A.G.’s Resp., at 7.
As an initial matter, the mere pleading of negligence
on the part of someone other than Dr. Matulis is not sufficient
under West Virginia law to invoke coverage of an insurance
policy with an intentional act exclusion.
In both Leeber and
Smith, in addition to the intentional torts alleged against the
insured accused of sexual misconduct, claims for negligence were
brought against the employer and co-insured of those
individuals.
at 833–34.
See Leeber, 376 S.E.2d at 587; Smith, 542 S.E.2d
The Supreme Court of Appeals of West Virginia stated
in Leeber that “allegations of ‘negligence’ in the complaint are
35
‘a transparent attempt to trigger insurance coverage by
characterizing allegations of [intentional] tortious conduct
under the guise of ‘negligent’ activity.”
376 S.E.2d at 587.
As previously noted, the Smith court found that “the inclusion
of negligence-type allegations in a complaint that is at its
essence a sexual harassment claim will not prevent the operation
of an ‘intentional acts’ exclusion.”
542 S.E.2d at 834.
In further support of the holdings in Leeber and
Smith, the Supreme Court of Appeals answered the following
certified question from the United States District Court for the
Northern District of West Virginia:
Applying West Virginia public policy and rules of
contract construction, do the unambiguous
exclusions in [the insurer’s] policy for bodily
injury or property damage “which is expected or
intended by any insured even if the actual injury
or damage is different than expected or
intended,” and “arising out of any criminal act
committed by or at the direction of any insured,”
and the unambiguous exclusion in Erie's policy
for “bodily injury, property damage, or personal
injury expected or intended by ‘anyone we
protect’ ...,” preclude liability coverage for
insureds who did not commit any intentional or
criminal act?
Am. Nat’l Prop. & Cas. Co. v. Clendenen, 793 S.E.2d 899, 902 (W.
Va. 2016).
In Clendenen, teenagers Sheila Eddy and Rachel Shoaf
plotted and ultimately killed another teenager, Skylar Neese.
Id. at 903.
The victim’s parents sued the killers’ parents for,
36
inter alia, negligent supervision of their children. 13
03.
Id. 902–
At the time of the murder, the killers’ parents had
homeowner’s insurance policies containing intentional injury
exclusions, not unlike the one in the Policy here. See id. at
903–04.
In Clendenen, the “focus of the intentional/criminal
acts exclusions is on the cause of the damages, not the
negligent supervision and negligent entrustment causes of
actions alleged against [the parents].”
Id. at 911.
Accordingly, the court held that “[o]ur case law makes it clear
that our public policy and rules of construction require courts
to apply intentional and criminal act exclusions to torts based
on intentional acts even when the claims are couched in terms of
negligence.”
Id.
“[I]ntentional acts exclusions and exclusions
that remove a whole class of injuries from coverage are
consistent with the public policy of [West Virginia], even where
the result of the same is to deprive innocent victims of
compensation.”
Id. (citing Leeber, 376 S.E.2d at 586–87).
In
light of the holding and reasoning of Clendenen, the claims in
the instant case that allege injury against Charleston
The court notes that defendant Tara Clendenen was the guardian
or custodian of defendant Sheila Eddy. See 793 S.E.2d at 903.
The court further notes that there is no allegation that the
parents or guardians knew or should have known that the children
were plotting to murder their friend. See id.
13
37
Gastroenterology sounding in the negligent supervision or
retention of Dr. Matulis arose from Dr. Matulis’s own
intentional acts.
These claims are not covered under the Policy
based on the “Expected or Intended Injury” exclusion.
The Supreme Court of Appeals has provided further
basis to exclude the negligence claims raised by claimants
against Charleston Gastroenterology.
In West Virginia Fire &
Casualty Co. v. Stanley, a liability insurer brought a
declaratory judgment action seeking a declaration that the
policy did not provide coverage for sexual abuse.
483, 487 (W. Va. 2004).
602 S.E.2d
The insureds had a homeowner’s
insurance policy with an expected or intended injury exclusion:
“We will not cover bodily injury or property damage that is
expected or intended by a Covered Person.”
Id.
The son of the
insured was alleged to have sexually abused a relative who was
also a minor.
Id.
In the underlying complaint, the plaintiffs
(i.e., the assaulted minor and her parents) sued the insureds
for negligent supervision of their son, alleging that the
insureds knew that the son possessed sexual deviancies.
496-97.
Id. at
Importantly, the complaint alleged that the insureds’
actions were “negligent,” as well as “intentional, willful,
wanton, malicious, reckless, and outrageous.”
38
Id.
The Supreme Court of Appeals noted that “[a]lthough
the word ‘negligent’ is used in their allegations against [the
insureds], intentional conduct is actually described.”
497.
Id. at
The alleged “negligent” acts of the insureds were excluded
under the intentional acts exclusion of the insurance policy
because the court reasoned that:
The usual meaning assigned to “wilful,” “wanton”
or “reckless,” according to taste as to the word
used, is that the actor has intentionally done an
act of an unreasonable character in disregard of
a risk known to him or so obvious that he must be
taken to have been aware of it, and so great as
to make it highly probable that harm would
follow. It usually is accompanied by a conscious
indifference to the consequences, amounting
almost to willingness that they shall follow; and
it has been said that this is indispensable.
Id. (emphasis in original).
Several of the claimants here directly allege that
Charleston Gastroenterology knew of Dr. Matulis’s sexual
misconduct and did nothing about it.
See, e.g., T.W. Am.
Compl., ECF No. 113-2, Ex. B, ¶¶ 13–15; J.L.’s Compl., ECF No.
113-3, Ex. C, ¶¶ 24, 30–32, 49–53, 60–61; J.W.’s Compl., ECF No.
134-1, Ex. 1, ¶¶ 11, 13, 25.
Those same claimants allege that
the actions and inactions of Charleston Gastroenterology and Dr.
Matulis were willful, wanton, and reckless.
See T.W.’s Am.
Compl., ECF No. 113-2, Ex. B, ¶ 19; J.L.’s Compl., ECF No. 1133, Ex. C, ¶¶ 35, 57, 70; J.W.’s Compl., ECF No. 134-1, Ex. 1,
39
¶¶ 28, 32.
Under the alleged facts that Charleston
Gastroenterology actually, or at least constructively, knew that
Dr. Matulis was sexually assaulting patients, Charleston
Gastroenterology would have expected harm to befall the
claimants.
These claims alleging that actions or inactions of
Charleston Gastroenterology were willful, even though they
assert negligence, are therefore excluded from coverage under
the “Expected or Intended Injury” exclusion.
Insofar as the claims for negligence against
Charleston Gastroenterology allege personal, rather than bodily
injury, the “Professional Services” exclusion exempts those
claims from coverage as well.
J.L. and A.G. both cite Charleston Area Medical Center
(“CAMC”), 2011 WL 2161534, to support their contention that the
“Professional Services” exclusion does not preclude their
negligence claims.
6–7.
See J.L.’s Resp., at 9–10; A.G.’s Resp., at
In CAMC, an employee of CAMC was alleged to have molested
two female patients, resulting in both physical and emotional
harm.
2011 WL 2161534, at *1.
The relevant insurance policy
provision was the “Medical and Professional Services Exclusion,”
which excluded coverage for claims “alleging, arising out of,
based upon or attributable to the Insureds performance or
rendering of or failure to perform or render medical or other
40
professional services or treatments for others.” 14
Id. at *9.
The court found that the claims of sexual assault against the
employee were not excluded because they did not arise during any
treatment of the patients.
Id. at *10.
The claims were
“independent of any treatment or medical service that [the
employee] may have been providing” because the “employee was not
providing any type of medical or professional service when he
molested these women.”
Id.
In contrast, in the instant case, Dr. Matulis was
performing colonoscopies or other medical procedures when the
claimants suffered their harm.
Regardless of when Charleston
Gastroenterology knew or should have known about Dr. Matulis’s
alleged perversions, the triggering incidents that caused harm
to the claimants occurred during medical procedures performed by
Dr. Matulis.
Those procedures are professional services.
Syl. Pt. 1, Boggs, 693 S.E.2d at 62.
See
The claims for personal
injury caused by the negligence of Charleston Gastroenterology
are therefore excluded from coverage under the Policy.
E.
Arguments for further discovery.
Claimants J.L., J.W., and A.G. assert that further
discovery is necessary before the court can reach a decision on
There was no intentional act exclusion in the policy in
question in CAMC. See 2016 WL 2161543, at *6–7.
14
41
declaratory judgment, in part, because facts are in dispute.
J.L. contends that full discovery is necessary because coverage
determinations “depend on the circumstances of when and what
occurred, which requires discovery,” and because “Westfield is
arguing its favored version of disputed facts” in support of
summary judgment.
J.L.’s Resp., 12–13.
J.W. argues that the
lack of discovery inhibits her ability to argue fully against
summary judgment.
See J.W.’s Resp., at 13.
A.G. avers that she
needs discovery to unveil additional facts that will bolster her
claims.
See A.G.’s Resp., at 10.
Under West Virginia law, a trial court does not need
to adjudicate the underlying facts in order to determine
coverage.
Stanley, 602 S.E.2d at 490.
The general rule is that
“an insurer's duty to defend is tested by whether the
allegations in the plaintiff's complaint are reasonably
susceptible of an interpretation that the claim may be covered
by the terms of the insurance policy.”
160.
Pitrolo, 342 S.E.2d at
The Stanley court further emphasized that:
. . . an insurer has a duty to defend an action
against its insured only if the claim stated in
the underlying complaint could, without
amendment, impose liability for risks the policy
covers. If the causes of action alleged in the
plaintiff's complaint are entirely foreign to the
risks covered by the insurance policy, then the
insurance company is relieved of its duties under
the policy.
42
602 S.E.2d at 490 (quoting State Auto Mut. Ins. Co. v. Alpha
Eng’g Servs., Inc., 542 S.E.2d 876, 879 (W. Va. 2000)).
In this case, the claimants have either filed an
underlying complaint in the Circuit Court of Kanawha County,
submitted a Notice of Claim, or both.
Each complaint or Notice
of Claim outlines specific allegations of wrongdoing that were
considered by this court.
Discovery intended to determine the
truth or falsity of the claimants’ allegations or to aid in
making additional allegations in the future are not necessary to
determine insurance policy coverage under West Virginia law.
Westfield filed a declaratory judgment action, in part, for the
purpose of avoiding the cost of full discovery if the
allegations in the complaint would not be covered by the Policy.
The court finds that further discovery is not necessary to
determine whether coverage exists in this matter.
F.
Arguments for waiting for the state court decisions.
Claimants A.G. and J.L. both allege that a decision as
to Westfield’s duty to indemnify should be withheld until the
individual underlying state court actions and any unidentified
future actions have been fully litigated.
3; A.G.’s Resp., at 7–8.
See J.L’s Resp., at
As previously noted, in declaratory
judgment proceedings, all that is necessary is for the insurer
43
to closely analyze the allegations in the pleadings.
See
Bowyer, 609 S.E.2d at 912; Pitrolo, 342 S.E.2d at 160.
A.G., alternatively, notes that the Southern District
of West Virginia has held that “in general, an insurer’s duty to
indemnify cannot be determined until after the underlying suit
has been resolved.”
Camden-Clark Mem’l Hosp. Corp. v. St. Paul
Fire & Marine Ins. Co, 717 F. Supp. 2d 529, 540 (S.D.W. Va.
2010) (quoting Columbia Cas. Co. v. Ga. & Fla. RailNet Inc., 542
F.3d 106, 111 (5th Cir. 2008)).
A.G. further notes that the
Court of Appeals for the Fourth Circuit has stated that an
indemnification decision was premature where “there has been
neither a determination of liability nor a settlement in any of
the [state or federal court] actions pending against [the
parties].”
A/S Ludwig Mowinckles Rederi v. Tidewater Constr.
Corp., 559 F.2d 928, 932 (4th Cir. 1977).
“An important factor
in considering ripeness is whether resolution of the tendered
issue is based upon events or determinations which may not occur
as anticipated.” Id.
Unlike the present case, the insurance policy in
Camden-Clark did not impose a duty to defend.
at 537.
717 F. Supp. 2d
The insured hospital only sought indemnification from
their insurance provider “for all the allegations asserted and
damages awarded against it in the underlying matter.”
44
Id. at
534.
In addition, the Fifth Circuit decision quoted by the
court in Camden-Clark notes exceptions to the rule that
indemnification cannot be determined until after the underlying
suit has been resolved, including “when courts are determining
duty to defend and duty to indemnify issues at the same time,
and when the underlying policy does not provide for a duty to
defend but ‘it is apparent before liability is resolved in the
underlying case that the policy cannot cover the claim.’”
Id.
at 540 n.11 (quoting Ga. & Fla. RailNet Inc., 542 F.3d at 111).
The holding of Mowinckles is distinguishable because
it concerned a suit in admiralty in Virginia for insurance
coverage “for any liability which may be imposed on [a
shipowner] in the pending wrongful death or personal injury
actions” brought against the shipowner.
559 F.2d at 930.
The
Supreme Court of Appeals of West Virginia has also recognized
other opportunities to decide on declaratory judgment for
insurance coverage before the underlying civil lawsuit has
completed. See, e.g., Leeber, 376 S.E.2d at 583–84 (considering
coverage based on a motion for judgment on the pleadings in a
declaratory judgment action before the underlying civil suit
completed).
“Declaratory judgment . . . provides a prompt means
of resolving policy coverage disputes so that the parties may
know in advance of the personal injury trial whether coverage
45
exists.”
1989).
Christian v. Sizemore, 383 S.E.2d 810, 814 (W. Va.
Deciding coverage before the underlying case completes
also ensures that an insurance provider fulfills its duty (or
right) to defend an insured if such duty arises under the
policy.
Requiring an underlying case to complete would entirely
defeat the purpose of reviewing policy coverage to determine a
duty to defend.
Furthermore, the court has statutory authority to
consider this declaratory judgment action pursuant to the
Declaratory Judgment Act, 28 U.S.C. § 2201, which is one of the
authorities under which this case was filed.
Under the
Declaratory Judgment Act, a federal district court, in a case or
controversy otherwise within its jurisdiction, “may declare the
rights and other legal relations of any interested party seeking
such declaration, whether or not further relief is or could be
sought.”
28 U.S.C. § 2201(a); see also Penn-Am. Ins. Co. v.
Coffey, 368 F.3d 409, 412 (4th Cir. 2004) (recognizing federal
jurisdiction to consider declaratory judgment actions involving
the possible duty to defend or indemnify an insured).
Declaratory judgments are routine and appropriate where “the
judgment will serve a useful purpose in clarifying and settling
the legal relations in issue.”
Coffey, 368 F.3d at 412 (quoting
46
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir.
1937)).
The court finds that the circumstances of this case do
not necessitate waiting for the underlying state actions to
complete.
The case is fit for a determination on Westfield’s
declaratory judgment action.
IV.
Conclusion
For the foregoing reasons, the court finds that
Westfield Insurance Company Policy Number BOP 3157951, effective
from March 21, 2015 through March 21, 2016, does not provide
coverage for the defense or indemnification of Dr. Steven R.
Matulis or Charleston Gastroenterology Associates, PLLC for
those claims asserted by the claimants, identified by their
initials as set forth in the case captioned above, in connection
with the alleged sexual assault of the claimants and/or the
provision of inadequate medical care to the claimants at any
time, including any class or classes that may be certified in
one or more civil actions by them.
Furthermore, Westfield has
no duty to defend or indemnify Dr. Steven R. Matulis or
Charleston Gastroenterology Associates, PLLC against those
claims asserted by the aforementioned claimants in connection
with the alleged sexual assault of the claimants and/or the
provision of inadequate medical care to the claimants at any
47
time, including any class or classes that may be certified in
one or more civil actions by them.
Accordingly, it is ORDERED
that Westfield’s motion for summary judgment be, and hereby is,
granted.
The Clerk is directed to transmit this memorandum
opinion and order to all counsel of record and to any
unrepresented parties.
ENTER: September 30, 2019
48
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