Medical Malpractice Ins. Pool of N.Y. State v Gordon

[*1] Medical Malpractice Ins. Pool of N.Y. State v Gordon 2015 NY Slip Op 51181(U) Decided on August 12, 2015 Supreme Court, New York County Reed, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 12, 2015
Supreme Court, New York County

Medical Malpractice Insurance Pool Of New York State, Plaintiff,

against

Barbara Gordon, MD, Defendant.



154079/2014



For plaintiff:

Soffer & Rech, LLP

48 Wall Street, 28th Floor

New York, New York 10005

By: Michael A. Borg, Esq.

For defendant:

Scott G. Cerbin, Esq., PLLC

16 Court Street, Suite 2901

Brooklyn, New York 11241

By: Scott G. Cerbin, Esq.
Robert R. Reed, J.

In this action, plaintiff Medical Malpractice Insurance Pool of New York State (MMIP) moves, pursuant to CPLR 3212, for summary judgment on its claim against defendant Barbara Gordon, MD (Gordon). Gordon opposes this motion and cross-moves, pursuant to CPLR 3211 (a) (1), to dismiss this action.

On November 12, 2006, MMIP issued a professional liability insurance policy, bearing policy No. 2-203809 to Gordon (The Policy). The Policy was in effect for one year, from November 12, 2006 to November 12, 2007.[FN1] It was a Aclaims made@ policy, which means that the insured=s protection is limited to those claims made while the policy is in effect. According to MMIP, Gordon owes to MMIP the expenses it incurred in the defense of Gordon in the [*2]underlying claim, AVictoria David v Barbara Gordon MD, et al,@ index No. 24114/2008 (Kings County, New York) (the Underlying Action), in the sum of $115,556.85.

Subsequent to Gordon=s failure to renew The Policy that expired on November 12, 2007, MMIP sent two letters to Gordon, dated January 11, 2008 and February 12, 2008, offering tail coverage. Relevant language in both letters reads:

Ato be covered for claims not yet made against you, as a result of prior medical incidents, which would have been covered if your policy had remained in force, you must purchase an Extended Reporting Period Endorsement from MMIP, or in the alternative, purchase >nose coverage= from your subsequent insurer@

(Holke aff, exhibits 2 and 3 at 1).

On both occasions, Gordon refused the offer of tail coverage. Thus, the relevant language of The Policy provided as follows:

SECTION IV. LIMITS ON AND EXTENSIONS OF INSURANCE COVERAGE

AG. IF YOU DO NOT PURCHASE OPTIONAL EXTENDED REPORTING ENDORSEMENT COVERAGE AND YOU ARE NOT ENTITLED TO AUTOMATIC EXTENDED REPORTING ENDORSEMENT COVERAGE AND A CLAIM IS MADE AGAINST YOU AND YOUR HOSPITAL

If your coverage under this policy ends, for any reason and you do NOT purchase the Optional Extended Reporting Endorsement Coverage described in Section IV.C and you are NOT entitled to the Automatic Extended Reporting Endorsement Coverage described in Section IV.E, there are two situations where claims made against you will be handled under this policy as though you had purchased or were entitled to coverage, even though the Claims were first reported to the Company after the 60th day following the end of the Policy Period or any Termination of Coverage. IN BOTH CASES, THE COMPANY WILL INSTITUTE A CLAIM AGAINST YOU PERSONALLY FOR ANY CLAIMS OR JUDGMENTS THE COMPANY ACTUALLY PAYS AND FOR ALL DEFENSE COSTS THE COMPANY INCURS UNDER THIS PROVISION

AA Claim will be handled under the circumstances: (a) if a Hospital at which you provided Professional Services receives a Suit or Claim after the 60th day following any Termination of Coverage in which you AND the Hospital or any of its employees are named as defendants, or if the Hospital or any of its employees institute a third-party action against you AND (b) the Suit or Claim arises out of Professional Services which you provided (or should have provided) on or after the Retroactive Date and before the end of the Policy Period@

(Holke aff, exhibit 1 at 5).

The underlying claim was made in or about September 2008, for treatment rendered on October 9, 2007, against, among others, Gordon and NY Methodist Hospital. Gordon forwarded the claim to MMIP for defense. Because the claim was made Aafter the 60th day following@ the termination of The Policy, and named a hospital at which Gordon provided professional services, MMIP was obliged to Ahandle@ the claim in the Underlying Action under the terms of section IV.G of The Policy.

By letter dated October 3, 2008, MMIP acknowledged receipt of the claim forwarded by Gordon and informed Gordon of her rights and obligations under The Policy. Because Gordon [*3]did not purchase applicable tail coverage after the expiration of The Policy, the letter states, in pertinent part:

AAs set forth below MMIP advises and declares that it will provide a defense and indemnity to you in the above captioned lawsuit pursuant to the terms, conditions and limitations of your primary policy. Please be further advised that pursuant to the terms, conditions and limitations of your primary policy, you must reimburse MMIP for all defense costs and indemnification incurred in this lawsuit@

(Holke aff, exhibit 5 at 1).

It further states that because Gordon did not purchase tail coverage, there is no coverage under the excess policy. The letter states:

AHowever, in light of the fact that the hospital at which you rendered services is named as a defendant, and in accordance with Section IV.G, MMIP will defend and indemnify you subject to all the terms, limit and conditions of the policy as if you had coverage but will seek to recover from you personally all sums paid on your behalf@

(id. at 3).

In accordance with the terms of The Policy, MMIP retained the Law Offices of Charles E. Kutner, LLP to represent and defend Gordon. The claim was extensively litigated over the course of nearly four years and, after trial, a unanimous verdict was rendered in favor of Gordon.

MMIP commenced this action against Gordon in March 2014, seeking Apursuant to the terms of [The Policy],@ $115,556.85, for defense of the Underlying Action, which included investigation, medical examination, discovery and trial, with interest from August 9, 2012. MMIP annexed to its motion papers The Policy, the letters sent to Gordon informing her of her rights under The Policy, the underlying complaint, and the litigation invoices, which MMIP paid.

In opposition, and in her cross motion, Gordon argues that the provision of The Policy relied upon by MMIP is vague, ambiguous, unconscionable and unenforceable. She seeks a declaratory judgment that section IV.G is unenforceable as against public policy. In her affidavit, Gordon argues that it was never her understanding that she would be responsible for defense costs as a prevailing party. According to Gordon, pursuant to the provisions of section IV.G, under The Policy, she is Acovered notwithstanding the fact that my employer opted not to purchase >tail coverage= if I am sued together with a hospital in which I provided professional services@ (Gordon aff, & 6). Gordon argues that this is precisely what happened here; she was sued together with Methodist Hospital of New York and others for alleged medical malpractice.She argues that The Policy language states that even if the policy expires and she fails to extend the coverage, and even if the claims were reported to MMIP after the 60th day following the end of The Policy period, the Aclaims will be handled as though [Gordon] had purchased or [was] entitled to [tail coverage]@ (Gordon=s Memorandum of Law in support of defendant=s motion to dismiss at 3, quoting Holke aff, exhibit 1 at 5).

Gordon argues that this language contradicts the subsequent language in The Policy that states: AIN BOTH CASES THE COMPANY WILL INSTITUTE A CLAIM AGAINST YOU PERSONALLY FOR ANY CLAIMS OR JUDGMENTS THE COMPANY ACTUALLY PAYS AND FOR ALL DEFENSE COSTS THE COMPANY INCURS UNDER THIS PROVISION@ (id. at 4, quoting Holke aff, exhibit 1 at 5).

Gordon further argues that the language of The Policy is unclear, because a reasonable inference from the language is that MMIP will institute a claim against Gordon for fees only in the event that they pay a claim or judgment on her behalf. Finally, Gordon argues that The Policy is not enforceable as it appears to require Gordon to agree to participate and cooperate in her defense and settlement of her claims in exchange for no consideration. This is so, according to Gordon, because The Policy requires her to cooperate with MMIP in its settlement of the claims against her, that she may not withhold consent to settlement, but that she must finance the litigation and pay for any judgment or claims that MMIP pays on her behalf.

In her cross motion, Gordon seeks, pursuant to CPLR 3001, a declaratory judgment that MMIP is not entitled to collect on the policy, since section IV.G is unenforceable as against public policy.

Discussion

Under CPLR 3212 (b), summary judgment Ashall be granted if, upon all papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party.@ To warrant a court=s directing judgment as a matter of law, it must clearly appear that no material issue of fact is presented for trial (Doize v Holiday Inn Ronkonkoma, 6 AD3d 573, 574 [2d Dept 2004]). When a party has made a prima facie showing to entitle it to summary judgment, Athe burden shifts to the opposing party to submit proof in admissible form sufficient to create a question of fact requiring a trial@ (Kershaw v Hospital for Special Surgery, 114 AD3d 75, 82 [1st Dept 2013]). Additionally, Ain determining a motion for summary judgment, facts alleged by the nonmoving party and inferences which may be drawn from them must be accepted as true@ (Doze, 6 AD3d at 574). Conclusory allegations or denials are insufficient to either warrant or defeat summary judgment (McGahee v Kennedy, 48 NY2d 832, 834 [1979]).

Contracts must be interpreted based upon the parties= intentions arising from the language of the agreement itself (Lopez v Fernandito=s Antique, 305 AD2d 218, 219 [1st Dept 2003]). A[A] contract is to be construed in accordance with the parties= intent, which is generally discerned from the four corners of the document itself. Consequently, >a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms=@ (MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640, 645 [2009], quoting Greenfield v Philles Records, 98 NY2d 562, 569 [2002]).

Here, the court finds that the language of The Policy is clear and the parties= intent can be discerned from the four corners of the document. The court does not accept Gordon=s argument that the language is ambiguous or contradictory. Instead, the court finds that the subject language is clear and that MMIP=s conduct is consistent with that language.

The one-year term of The Policy extended from November 2006 to November 2007. At the end of that time period, pursuant to the terms of The Policy, the period for reporting claims was automatically extended for 60 days. After the expiration of The Policy, and during the 60-day period, MMIP offered Gordon the option of purchasing tail insurance, which would have extended the coverage even further. This offer was made in two MMIP letters, sent to Gordon, explaining that her Amedical malpractice insurance policy was cancelled or non-renewed.@ Gordon did not purchase the tail coverage. Thus, after the 60-day extension, Gordon was entitled to the benefits as described in section IV.G. According to the plain language of this section, the parties agreed that in the event a claim was filed against Gordon and the hospital [*4]after the term of The Policy, MMIP would Ahandle@ claims made against Gordon, even if the claim was reported to MMIP after the 60th day following the expiration of The Policy — but at Gordon=s expense.

A plain reading of the language in Section IV.G does not support Gordon=s position that even though The Policy expired and she did not purchase optional extended reporting endorsement, or tail coverage, she would nonetheless receive the benefits of such coverage. There is no support in the language of The Policy for this position. Instead, The Policy states in several places that once the policy expires, the insured is not covered for claims, even if based on services provided during the policy period, unless the insured purchases tail coverage. Further, section IV.G states in capital letters that MMIP will seek from Gordon any defense costs it incurred. This information is repeated in the offer for tail insurance set forth in MMIP=s letters to Gordon of January 11, 2008 and February 12, 2008. Because the reading of The Policy is unambiguous, the Court finds there are no questions of fact necessitating a trial. The Court further finds that the provisions in the policy are not unconscionable.

The Court therefore denies Gordon=s cross motion and grants MMIP=s motion for summary judgment on the issue of liability, and the issue of reasonable attorneys= fees and costs is herein referred for a hearing. In accordance with the foregoing, it is, therefore,

ORDERED that the issue of reasonable attorneys= fees and costs is referred to a Special Referee to hear and report with recommendations, except that, in the event of and upon the filing of a stipulation of the parties, as permitted by CPLR 4317, the Special Referee, or another person designated by the parties to serve as referee, shall determine the aforesaid issue; and it is further

ORDERED that counsel for the party seeking the reference or, absent such party, counsel for the plaintiff shall, within 30 days from the date of this order, serve a copy of this order with notice of entry, together with a completed Information Sheet,[FN2] upon the Special Referee Clerk in the Motion Support Office in Rm. 119 at 60 Centre Street, who is directed to place this matter on the calendar of the Special Referee=s Part (Part 50 R) for the earliest convenient date.

Dated: August 12, 2015

ENTER:

_________________________

J.S.C. Footnotes

Footnote 1:The Policy automatically extended the reporting period for 60 days after the policy expiration date.

Footnote 2:Copies are available in Rm. 119 at 60 Centre Street, and on the Court=s website.