Westfield Insurance Company v. Matulis et al
Filing
96
MEMORANDUM OPINION AND ORDER denying defendant J. W.'s 40 MOTION to Dismiss the Complaint for Declaratory Relief. Signed by Judge John T. Copenhaver, Jr. on 10/26/2017. (cc: attys; any unrepresented party) (tmr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
WESTFIELD INSURANCE COMPANY,
Plaintiff,
v.
Civil Action No. 2:17-01269
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 before the court is defendant J.W.’s motion to
dismiss the complaint for declaratory relief, pursuant to Rules
12(b)(6) and 57 of the Federal Rules of Civil Procedure and 28
U.S.C. § 2201, filed on March 24, 2017.
Plaintiff Westfield
Insurance Company (hereinafter “Westfield”) filed a timely
response in opposition to the motion on April 7, 2017.
I.
Facts
According to the complaint, defendant J.W. is one of
several West Virginia residents asserting that they have had
colonoscopies performed by co-defendant Steven R. Matulis, M.D.,
in Charleston, Kanawha County, West Virginia.
It is alleged
that a number of the patient defendants, designated by their
initials, have claimed that while they were under anesthesia,
Dr. Matulis sexually assaulted them or inappropriately placed
his hands upon them, and that he performed their procedures
while distracted or impaired.
A number of the patient
defendants have filed civil actions against Dr. Matulis in the
Circuit Court of Kanawha County, West Virginia (although J.W.
states in her motion to dismiss that she is not one of them).
One or more of the patients have sought to assert class claims.
These civil actions include claims against defendant Charleston
Gastroenterology Associates, PLLC (hereinafter “Charleston
Gastroenterology”), with which Dr. Matulis was affiliated.
According to Westfield’s response to the motion, in
April of 2016, J.W. submitted formal Notices of Claim to both
Dr. Matulis and Charleston Gastroenterology, pursuant to Section
55-7B-6 of West Virginia Code, which requires such notice at
least thirty days prior to filing a medical professional
liability action (ECF No. 51, at 6-7).
Westfield’s response
states that J.W. asserted that she is “entitled to damages for
the alleged conduct of Dr. Matulis and/or Charleston
Gastroenterology,” and that had it not been for the filing of
the Notices of Claim, Westfield would have had “no way to
include [J.W.] as a party defendant” (ECF No. 51, at 7).
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Westfield alleges that it issued a policy of liability
insurance, Policy No. BOP3157951, to Charleston
Gastroenterology.
The policy purports to provide liability
coverage for damages because of “bodily injury,” “property
damage” or “personal and advertising injury,” subject to
specified exclusions.
On Westfield’s construction, the
patients’ claims do not fall within the scope of the policy’s
coverage on its face, and are also barred by the policy’s
exclusions.
Accordingly, Westfield seeks a declaratory judgment
stating that its policy does not provide coverage for claims in
connection with the alleged sexual assault and/or provision of
inadequate medical care of the patient co-defendants, including
any class actions, and that plaintiff does not owe its insured
Charleston Gastroenterology or Dr. Matulis a duty to defend or
indemnify either of them against such claims.
In a memorandum in support of her motion to dismiss,
J.W. claims that the suit against her rests on a speculative and
hypothetical premise because she has not filed an action that
would implicate the scope of the insurance policy.
II.
Standard of Review
Federal Rule of Civil Procedure 8(a)(2) requires that
a pleader provide “a short and plain statement of the claim
showing . . . entitle[ment] to relief.”
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Fed. R. Civ. P.
8(a)(2); Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007).
Rule
12(b)(6) correspondingly permits a defendant to challenge a
complaint when it “fail[s] to state a claim upon which relief
can be granted . . . .”
Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the grounds upon
which it rests.’”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957),
overruled on other grounds, Twombly, 550 U.S. at 563); see also
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007).
In order to survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S.
at 570); see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009).
Application of the Rule 12(b)(6) standard requires
that the court “‘accept as true all of the factual allegations
contained in the complaint . . . .’”
Erickson, 127 S. Ct. at
2200 (quoting Twombly, 127 S. Ct. at 1965); see also South
Carolina Dept. Of Health And Environmental Control v. Commerce
and Industry Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004)
(quoting Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002)).
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The court must also “draw[] all reasonable . . . inferences from
th[e] facts in the plaintiff's favor . . . .”
Edwards v. City
of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
III. Discussion
J.W. claims that plaintiff’s request for declaratory
relief is not ripe for adjudication because it fails to allege
an actual, justiciable controversy between the two parties.
The
memorandum in support of the motion (ECF No. 41) notes that
jurisdiction under the Declaratory Judgment Act, 28 U.S.C. §
2201, is discretionary.
It further argues that the court is
called upon to render an opinion on a purely hypothetical
matter.
Westfield counters that because J.W. submitted formal
notices of claim to both Dr. Matulis and Charleston
Gastroenterology, her claim is not “hypothetical” and is in fact
ripe for a declaratory judgment action.
Westfield also notes
that in circumstances such as these, “declaratory judgment
actions are routinely filed to resolve disputes which have not
yet resulted in litigation between a claimant and an insured or
a judgment against an insured, when the insurer recognizes a
need to protect its rights” (ECF No. 51, at 7).
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Given the filing of the notices of claim and the
factual commonalities among the claims of various patients, the
court does not deem the dispute a hypothetical one.
The West
Virginia State Supreme Court of Appeals noted in the case of
Christian v. Sizemore, 383 S.E.2d 810 (W. Va. 1989): “Where the
coverage question is separable from the issues in the underlying
tort action, it should ordinarily be decided first, as it often
may be dispositive of a personal injury litigation.”
S.E.2d at 814.
Id., 383
The court explained further: “Declaratory
judgment also provides a prompt means of resolving policy
coverage disputes so that the parties may know in advance of the
personal injury trial whether coverage exists.”
Id.
Under West Virginia law, the duty to defend is broader
than the duty to indemnify, and its scope is determined by the
underlying complaint in the damages action, and not by the
outcome of the litigation.
See Bowyer v. Hi-Lad, Inc., 609
S.E.2d 895, 912 (W. Va. 2004).
Accordingly, there is no need to
wait for the resolution of the damages suit for a declaratory
action to clarify the extent of the insurer’s duty.
Indeed, it is well established in this circuit that a
district court need not wait until the resolution of an
underlying damages action in state court to determine the scope
of an insurer’s liability.
To aid district courts in deciding
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whether to abstain from exercising jurisdiction over such
declaratory actions, the Fourth Circuit has proposed a
suggestive four-factor test.
The factors are:
(1) whether the state has a strong interest in having
the issues decided in its courts; (2) whether the state
courts could resolve the issues more efficiently than
the federal courts; (3) whether the presence of
“overlapping issues of fact or law” might create
unnecessary “entanglement” between the state and federal
courts; and (4) whether the federal action is mere
“procedural fencing,” in the sense that the action is
merely the product of forum-shopping.
Penn–Am. Ins. Co. v. Coffey, 368 F.3d 409, 412 (4th Cir.
2004) (quoting Nautilus Ins. Co. v. Winchester Homes, Inc.,
15 F.3d 371, 377 (4th Cir. 1994)).
None of these Nautilus factors tilt in favor of J.W.’s
position.
While the state has an interest in having such issues
decided in its courts, the state benefits from the use of
federal judicial resources in resolving those same issues.
There is no reason to believe that the state courts could
resolve the issues any more efficiently than the federal courts.
Indeed, if J.W. were severed from this action and proceeded
against by Westfield in state court, the dual actions would
become the height of inefficiency.
Inasmuch as the issues in
this proceeding are ones of law having to do with the
interpretation of the insurance policy, there is little to no
risk of unnecessary entanglement of issues of fact and law
between the state and federal courts.
Finally, this action is
not mere procedural fencing but a reasonable effort to obtain a
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THE DOW CHEMICAL COMPANY LONG TERM DISABILITY PROGRAM,
an Employee Welfare Benefits Plan,
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,
a Massachusetts Corporation, and
DOES 1 THROUGH 10, inclusive,
prompt resolution of the scope and limitations of the coverage
Defendants.
of the policy at ORDER AND NOTICE
issue.
PursuantThe Fourth Circuit has pointed out that a declaratory
to L.R. Civ. P. 16.1, it is ORDERED that the
following dates are hereby fixed as the time by or on which
certain judgment action is appropriate when the “judgment will serve a
events must occur:
01/28/2016
Motions under F.R. Civ. P. 12(b), together with
useful supporting briefs, memoranda, affidavits, or other
purpose in clarifying and settling the legal relations in
such matter in support thereof. (All motions
issue.” Penn-Am., by memoranda 412 (quoting Aetna Cas. & Sur.
unsupported 368 F.3d at will be denied without
prejudice pursuant to L.R. Civ. P. 7.1 (a)).
Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)). In sum, the
02/08/2016
Last day for Rule 26(f) meeting.
court believes that retaining jurisdiction is proper,
02/15/2016
Last day to file Report of Parties= Planning
Meeting. See L.R. claim 16.1.
particularly since J.W.’s Civ. P.is not “hypothetical” and
02/22/2016
Scheduling conference at 4:30 p.m. at the inefficient and
potentially bifurcating the proceedings would be Robert C.
Byrd United States Courthouse in Charleston, before
the undersigned, unless declaratory relief. Accordingly,
run counter to the purposes of canceled. Lead counsel
directed to appear.
J.W.’s motion to dismiss is denied.
02/29/2016
Entry of scheduling order.
03/08/2016
LastThe Clerk is requested to transmit this order to all
day to serve F.R. Civ. P 26(a)(1) disclosures.
counsel of record and to any transmit this Order and
The Clerk is requested to unrepresented parties.
Notice to all counsel of record and to any unrepresented
parties.
DATED: January 5,26, 2017
ENTER: October 2016
John T. Copenhaver, Jr.
United States District Judge
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