Auber v. Jellen
Annotate this CaseJanuary 1996 Term
___________
No. 22879
___________
LEWIS R. AUBER and JO-ANN AUBER,
Plaintiffs Below, Appellants,
v.
A. V. JELLEN, M.D. and A.V. JELLEN, M.D., P.C.,,
Defendants Below, Appellees
and
LEWIS R. AUBER and JO-ANN AUBER,
Appellants,
v.
INSURANCE CORPORATION OF AMERICA,
AKA ICA, A TEXAS CORPORATION,
Appellee
_______________________________________________________
Appeal from the Circuit Court of Ohio County
Honorable Ronald E. Wilson, Judge
Civil Action No. 89-C-707 W
AFFIRMED
_______________________________________________________
Submitted: January 9, 1996
Filed: March 1, 1996
Robert P. Fitzsimmons
Russell Jay Guthrie
Fitzsimmons Law Offices
Wheeling, West Virginia
and
G. Charles Hughes
G. Charles Hughes, L.C.
Moundsville, West Virginia
Attorneys for the Appellants
Landers P. Bonenberger
McDermott, Bonenberger, McDermott & Gallaway
Wheeling, West Virginia
Attorney for the Appellees,
A. V. Jellen, M.D. and
A. V. Jellen, M.D., P.C.
James F. Companion
Yolanda G. Lambert
Schrader, Byrd, Companion & Gurley
Wheeling, West Virginia
Attorneys for the Appellee,
Insurance Corporation of America
JUSTICE ALBRIGHT delivered the Opinion of the Court.
JUSTICE RECHT did not participate in the decision of this case.
SYLLABUS BY THE COURT
1. "'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.' Syllabus, Keffer v. Prudential Ins. Co., 153 W.Va.
813, 172 S.E.2d 714 (1970)." Syllabus point 1, Russell v. State Automobile Mutual
Insurance Co., 188 W.Va. 81, 422 S.E.2d 803 (1992).
2. "'Language in an insurance policy should be given its plain, ordinary
meaning.' Syl. Pt. 1, Soliva v. Shand, Morahan & Co., 176 W.Va. 430, 345 S.E.2d 33
(1986)." Syllabus point 2, Russell v. State Automobile Mutual Insurance Co., 188 W.Va. 81,
422 S.E.2d 803 (1992).
3. Ambiguous provisions in an insurance policy, especially those having the
qualities of a contract of adhesion, are to be construed against the insurer and in favor of the
insured.
4. In the absence of express language addressing the transition from
occurrences to claims-made insurance coverage, both policies are available to respond to
injuries that result from separate acts of negligence, one or more of which fairly fall within
the terms of the coverage expressly afforded by each policy. Where the insurer and insured
do not provide for the eventualities which might arise in the transition from one coverage to
the other, this Court will not read into either policy any language that would reduce the
coverage afforded by the policies by their express terms.
5. Anti-stacking language in a policy endorsement, limiting the coverage of
successive policies with respect to an additional insured professional corporation imposes
no such limitations with respect to a named insured in the same policy where the "other
stacking" language used in the endorsement does not clearly state the intentions of the parties
to apply the limitations to both the named insured and the additional insured.
6. Where the parties to a settlement agreement have, by the terms of their
agreement, fixed the time at which money is to be paid, any right to receive interest on that
money runs from the date set by the parties for payment.
7. When an insured or insurer, acting under a settlement agreement, simply authorizes a third party to the settlement to bring a declaratory judgment action against the insurer to determine the insurer's limits of liability insurance coverage, the party bringing the action is not a first-party insured and is therefore not entitled to attorney's fees.
Albright, Justice:
This is an appeal from a declaratory judgment entered by the Circuit Court of Ohio County. The principal question raised by the appeal is whether the medical malpractice insurance afforded by certain insurance policies issued to appellees, A.V. Jellen, M.D. and A.V. Jellen, M.D., P.C., a professional corporation through which Doctor Jellen apparently conducted his medical practice, provide a single policy limit or may be aggregated to provide a greater sum of coverage with respect to a series of five misdiagnoses made by Doctor Jellen with regard to appellant, Lewis R. Auber. Additional issues are whether appellants, Lewis R. Auber and Jo-Ann Auber, his wife, are entitled to prejudgment interest from the date of a settlement agreement giving rise to the declaratory judgment and whether they are entitled to an award of attorney fees incurred in obtaining the declaratory judgment.
The trial court found that coverage of $500,000 was afforded by one of the
policies with respect to the first misdiagnosis, that coverage was afforded by a second policy
with respect to the remaining four misdiagnoses, that the four misdiagnoses so covered
involved one "incident" under that policy, that the policy limit for one "incident" of
$1,000,000 applied under that policy and, in effect, that the applicable policy limits of the
two policies could be aggregated, resulting in coverage in the total sum of $1,500,000. The
trial court further concluded that prejudgment interest was not payable and that attorney fees
may not be awarded.
Appellants claim that, in addition to the policy limit provided by the first policy
for the first misdiagnosis, they are entitled to treat the four misdiagnoses covered by the
second policy as four separate "incidents", invoking a higher aggregate limit for multiple
"incidents" stated in that policy and that, as previously stated, they are entitled to
prejudgment interest and an award of attorney fees for having substantially prevailed in the
declaratory judgment. We disagree and, accordingly, we affirm the judgment of the Circuit
Court of Ohio County.
Doctor Jellen first saw Mr. Auber in 1983, but the matters relevant here
commenced in 1985. On December 2, 1985, appellant was examined and diagnosed with
pain in the entire lower abdomen. On December 5, 1986, appellant was examined and
diagnosed with acute anal fissure. On June 5, 1987, appellant was examined and diagnosed
with joint dysfunction, lumbar, or JDF lumbar plus SI joints with acute facet joint syndrome.
On August 12, 1987, appellant was examined and diagnosed with spastic colon with severe
chronic constipation. On August 23, 1987, appellant was examined and diagnosed with
febrile infection, possibly caused by diverticulitis.
In October, 1987, Doctor Jellen referred appellant to Ahmed H. Kalla, M.D.,
who is a colon and rectal surgeon. Doctor Kalla performed a pathology examination and
diagnosed appellant as having adenocarcinoma of the rectum, or rectal cancer. Appellant
underwent surgeries, treatments, and hospitalizations for the condition diagnosed by Doctor
Kalla. He is now disabled and unable to run his business, a retail tire store which he had
owned and operated for some years.
Appellants, Lewis R. Auber and Jo-Ann Auber, filed a civil action in the
Circuit Court of Ohio County on October 2, 1989, against A.V. Jellen, M.D. and A.V. Jellen,
M.D., P.C., the previously mentioned professional corporation. The complaint alleged that
Doctor Jellen injured appellants by reason of medical malpractice. Particularly, appellants'
complaint alleged that Doctor Jellen failed to properly diagnose rectal cancer on the occasion
of the five separate examinations previously detailed in this opinion.
In the course of that action, the parties agreed by stipulation that when Doctor
Kalla performed surgery in October, 1987, Doctor Kalla's opinion, to a reasonable degree
of medical certainty, based upon the size of the tumor and type of cancer, was that the tumor
and cancer had been present in Mr. Auber for more than two years, thus placing the onset
of the cancerous condition prior to Doctor Jellen's first examination of Mr. Auber on
December 2, 1985.
Also, during the pendency of the malpractice action, appellants asked appellees
how much insurance coverage was available. Doctor Jellen's insurance carrier, Insurance
Company of America (ICA), represented that the policy limit applicable to the malpractice
action was $500,000. Appellants disputed that representation. In April and May, 1992, the
parties negotiated a settlement of the malpractice action.
Under the negotiated settlement, ICA paid appellants $500,000 and appellants delivered to appellees an "Agreement of Release" dated May 28, 1992, which contained a general release of the defendants in the civil action, a release of any "bad faith" claim which appellants might have against the defendants' insurer and a section denominated "Settlement Terms". The release provided that appellants "will proceed to file a declaratory judgment action in the Circuit Court of Ohio County, West Virginia, the purpose of which is to determine if A. V. Jellen, M.D., and A. V. Jellen, M.D., P.C., possess any additional medical liability insurance coverage with Insurance Corporation of America applicable to this claim, aside from the Five Hundred Thousand Dollars and No/100 ($500,000.00)" paid incident to the settlement. The settlement further provided that:
At the conclusion of the declaratory judgment action and
after the exhaustion of any and all appeal rights following, if it
is determined that additional coverage is available, Insurance
Corporation of America, will pay that coverage amount so
determined, up to but not exceeding an additional One Million
Five Hundred Thousand and No/100 Dollars ($1,500,000.00).
(Emphasis added.)
Appellants filed the petition for a declaratory judgment, as provided for in the
settlement, on May 7, 1992, after the parties had at least verbally agreed to the settlement,
although the release reducing the settlement terms to writing bears the date of May 28, 1992.
ICA filed an answer to the petition for declaratory judgment in which it claimed that the limit
of its liability arising from the malpractice action was $500,000, the amount paid at
settlement. ICA admitted to that amount of liability by reason of a policy issued to Doctor
Jellen by ICA for the policy period from January 1, 1985 to January 1, 1986. Further, ICA
admitted that it had sold additional policies providing coverage to Doctor Jellen and that a
justiciable controversy existed as to the coverage provided by those policies to respond to
the settlement in the malpractice action but denied that those policies afforded any additional
coverage. In due course, appellants filed a motion for summary judgment on the declaratory
judgment petition. The trial court issued a letter opinion, stating its findings of fact and
conclusions of law supporting the grant of the summary judgment motion, and entered the
declaratory judgment order in conformity with that letter opinion, from which appellants
have taken this appeal.
During discovery incident to the declaratory judgment petition, ICA produced
five separate policies of insurance covering Doctor Jellen. In all of the policies Doctor Jellen
was the named insured and the professional corporation, "A.V. Jellen, Inc." was made an
"additional insured" by an endorsement included with each policy. The first policy stated
the admitted limit of $500,000 "per occurrence", with an aggregate limit of $1,000,000 for
all "occurrences" during "the term of the policy", January 1, 1985 through January 1, 1986.
That policy provided coverage with respect to "professional services rendered or which
should have been rendered . . . during the term of this Policy . . .".
The remaining four policies provided coverage for any "incident" occurring
after January 1, 1986, "the retroactive date" set forth in the policy, for which a claim was
made within the policy period. The policy period of each policy was for a calendar year,
being 1986, 1987, 1988, and 1989, respectively.
Since appellants made their claim against Doctor Jellen in 1989, the "claims-made" policy at issue in the case sub judice is the policy issued for calendar year 1989. Its coverage limits were $1,000,000 per claim, with a $3,000,000 aggregate. The policy defined the "'per claim' limit of liability" as "the total amount of all claims filed by all claimants for any one incident". The policy states that "[o]nly those incidents which occur subsequent to the retroactive date [January 1, 1986] from which a claim arises and are first reported to us during the Policy Period [calendar year 1989] are covered." Further, the policy says that "the following will be considered one incident":
a. all injury resulting from a series of acts or omissions in
providing medical services to one person and
b. all injury arising out of continuous or repeated exposure to
substantially the same general conditions and
c. all injury to a mother and her unborn child or children arising
out of acts or omissions in providing medical services.
Appellants contend that because "incident" in not defined in the 1989 policy
except by examples of what will be "considered" an incident, this Court should construe the
term by its common meaning and declare each of Doctor Jellen's examinations in 1986 and
1987 to be a separate "incident". Appellees respond that the plain meaning of the 1989
policy terms and the common construction of like policies mandates that all of Doctor
Jellen's examinations in 1986 and 1987 be treated as resulting in one injury, meaning one
incident. Appellees further contend that certain "anti-stacking" language found in the
professional corporation endorsement to the 1989 policy limits recovery under both the 1985
occurrences policy and the 1989 claims-made policy to the $1,000,000 per "incident" limit
in the 1989 policy.
First, we address the issue of whether, under the 1989 claims-made policy,
each examination and diagnosis made by Doctor Jellen in 1986 and 1987 is a separate
"incident", invoking the $3,000,000 aggregate limit rather than the $1,000,000 "incident"
limit. We conclude that the 1986 and 1987 examinations and diagnoses are one "incident"
under the policy. The l989 policy expressly provides that a claim includes the total amount
of all claims filed for any one incident. It further expressly provides that ". . . all injury
resulting from a series of acts or omissions in providing medical services to one person" will
be considered one incident. These provisions are clear and unambiguous and will be given
their plain, ordinary meaning. The 1989 policy clearly and unambiguously defines the four
examinations and diagnoses of Mr. Auber by Doctor Jellen in 1986 and 1987 as one
"incident" when the language employed in the policy is given its plain and ordinary meaning.
"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." Syllabus, Keffer v. Prudential Ins.
Co., 153 W.Va. 813, 172 S.E.2d 714 (1970).
Syl. pt. 1, Russell v. State Automobile Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803
(1992).
"'Language in an insurance policy should be given its plain, ordinary meaning.'
Syl. Pt. 1, Soliva v. Shand, Morahan & Co., 176 W.Va. 430, 345 S.E.2d 33 (1986)." Syl.
pt. 2, Russell v. State Automobile Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803
(1992).
Our application of these rules of construction is consistent with our treatment of multiple acts of negligence leading to a single injury in other situations. In Shamblin v. Nationwide Mutual Insurance Co., 175 W. Va. 337, 332 S.E.2d 639 (1985), we rejected the theory that two negligent acts covered by the same insurance policy and leading to a single injury constituted two "occurrences" under an "occurrences" type policy. And in Shamblin we said:
Any two antecedent negligent acts do not constitute two
"occurrences." The term "occurrence" in a limitation of liability
clause . . . refers unmistakably to the resulting event for which
the insured becomes liable and not to some antecedent cause(s)
of the injury.
Id. at 343, 332 S.E.2d at 644.
In Helmick v. Jones, 192 W.Va. 317, 452 S.E.2d 408 (1994), we construed a policy setting liability limits "per accident" and said regarding the claim that for each act of negligence leading to the injury of a person:
[T]he term "accident" can only be interpreted to mean the
resulting injury or damage sustained rather than the various
factors which may have contributed to the causation of that
ultimate resulting event.
Id. at 320, 452 S.E.2d at 411.
Next, we consider and reject appellees contention that Doctor Jellen's 1985
ICA "occurrence" liability insurance policy is not applicable in determining the extent of
ICA's liability. By its representation in the malpractice action that applicable policy limits
were $500,000 and its admission of that coverage in its answer to the declaratory judgment
petition, ICA clearly acknowledged that the 1985 "occurrences" policy covered Doctor
Jellen's alleged negligence. ICA paid those policy limits when the parties agreed to the
settlement terms and agreed that the Aubers might prosecute the declaratory judgment
petition before us to determine if additional coverage applied.
In reviewing this question, we note that the 1985 examination and misdiagnosis
is clearly one of the causes of the injury sustained by Mr. Auber. The parties have stipulated
that the cancerous tumor found by Doctor Kalla was already formed at the time of that
examination. Accordingly, the 1985 examination and misdiagnosis is itself a negligent act
for which recovery could have been had.
The court below addressed the question of whether the five examinations and
misdiagnoses constituted a "continuing tort". If it were concluded that the entire and only
cause of action fully accrued in December, 1985, then one might further conclude that the
1989 claims-made policy was wholly inapplicable to the case before us. The court below
concluded that the five separate examinations did not constitute a continuing tort. We agree.
In discussing the hallmarks of a continuing tort, we have said: "The Court
conceives a 'continuing cause of action' as being a situation where events, which for all
practical purposes are identical, occur repeatedly, at short intervals, in a consistent,
connected, rhythmic manner." DeRocchis v. Matlack, Inc., 194 W.Va. 417, ___ n.4, 460 S.E.2d 663, 669 n.4 (1995), discussing Handley v. Town of Shinnston, 169 W.Va. 617, 289 S.E.2d 201 (1982). In Handley, plaintiffs disregarded for a period in excess of the
applicable statute of limitations the readily observable, steady and more or less continual
leaking of water which, it was alleged, caused ever more serious injury to the plaintiffs.
Treating the tort alleged as a continuing one, this Court held that the cause of action accrued
outside the period of limitations and could not be maintained. In contrast, in DeRocchis we
considered the impact of a statute of limitations on a plaintiff's claim for damages involving
repeated and successive exposure to totulene diisocyanate fumes. It was asserted that the
several exposures resulted in progressive sensitivity to those fumes, causing injury to the
plaintiff. We characterized the various exposures as resulting in a number of "discrete
injuries" arising from exposure "on a number of different discrete occasions". We said: "In
effect, there were a number of separate personal injuries, and a number of actions for
personal injury, which occurred." DeRocchis v. Matlack, Inc., 194 W.Va. at ___, 460 S.E.2d
at 668. In that appeal, we allowed an action to proceed for any exposure that occurred within
the applicable period of limitations even though other exposures had occurred outside the
period of limitations.
The rationale of DeRocchis is applicable to the appeal before us. As was
pointed out by the court below, there was not a continuing course of treatment with respect
to each of the five examinations. Each examination produced a different misdiagnosis; each
examination commenced a new line of treatment; each examination was an occasion of delay
or further delay in the prompt and appropriate treatment of the rectal cancer. These discrete
examinations, misdiagnoses and disparate treatments were not, in the words of Handley,
identical, occurring repeatedly, at short intervals, in a consistent, connected, rhythmic
manner. Just as in DeRocchis, where several discrete exposures each contributed to a
worsening condition, each examination and misdiagnosis of Mr. Auber left Mr. Auber's
tumor undetected, which, with each delay, grew and worsened. On each occasion, with each
physical examination and misdiagnosis, a new course was set upon, being each time a
discrete negligent act or omission and occasion of injury to Mr. Auber.(1)
Next, we examine whether the switch from "occurrence" to "claims-made"
coverage limits the recovery permitted under the two policies. We find no policy language
in the claims-made policies expressly dealing with the changeover from occurrences
coverage to claims-made coverage. There is no language building a bridge between the two
types of coverage. We also have been unable to locate any cases in this or other jurisdictions
speaking to the issue created by the silence of both policies with respect to such a transition
in coverage. We turn to basic definitions. "An 'occurrence' policy protects a policyholder
from liability for any act done while the policy is in effect, whereas a 'claims-made' policy
protects the holder only against claims made during the life of the policy." 7A J. Appleman,
Insurance Law and Practice 4503 at 90 (Berdal ed. 1979; Supp. 1995). "Thus, an
occurrence policy would cover a claim where the alleged malpractice occurred during the
term of the policy even if the claim is not made or the malpractice not discovered until after
the policy has lapsed . . . ." PA. Osteopathic Medical Ass'n. v. Foster, 134 Pa. Cmwlth. 368,
372-373, 579 A.2d 989, 991 (1990). We conclude that both the 1985 "occurrences" policy
and the 1989 "claims-made" policy afford Doctor Jellen the coverage provided by the
respective provisions of those policies. Absent express language to the contrary, the 1985
policy affords Doctor Jellen indemnity with respect to the alleged act of negligence
occurring in 1985 which contributed to the Aubers' injury, and the 1989 policy affords
Doctor Jellen indemnity with respect to the claim made in 1989 regarding the alleged acts
of negligence occurring after the "retroactive date" of January 1, 1986. Accordingly, we
hold that, in the absence of express language addressing the transition from occurrence to
claims-made insurance coverage, both policies are available to respond to injuries that result
from separate acts of negligence, one or more of which fairly fall within the terms of the
coverage expressly afforded by each policy. Where the insurer and insured do not provide
for the eventualities which might arise in the transition from one coverage to the other, this
Court will not read into either policy any language that would reduce the coverage afforded
by the policies by their express terms.
ICA further contends that the so-called "anti-stacking" language found in the professional corporation endorsements entitles ICA at least to a credit under the 1989 policy for the money paid under the 1985 policy. The "anti-stacking" language ICA relies upon is found only in the endorsement and not in the policy to which the endorsement applies. We note that the endorsement employs curious language, which, at a minimum, creates an ambiguity requiring that we construe the force and effect of the language employed. The "anti-stacking" provisions of the endorsements apply only to the "COVERAGE EXTENDED UNDER THIS ENDORSEMENT". (Emphasis added.) The coverage extended under the endorsement is coverage for the professional corporation named in the endorsement as A. V. Jellen, Inc., a co-defendant with Doctor Jellen in this action, named in the pleadings as A. V. Jellen, M.D., P.C. The endorsements each provide that:
Nothing herein contained shall be held to vary, alter, waive or extend the amount of coverage or any of the terms, conditions, provisions, agreements or limitations of the above mentioned Policy, other than as expressly set forth herein.(2)
As we have consistently held, ambiguous provisions in an insurance policy,
especially those having the qualities of a contract of adhesion, are to be construed against
the insurer and in favor of the insured. Payne v. Weston and Allstate Insurance Co., No.
22644 (W.Va. December 8, 1995); Cannelton Industries, Inc. v. Aetna Casualty & Surety
Company of America, 194 W.Va. 186, 460 S.E.2d 1 (1994).(3) Applying this rule in
construing the endorsement, we hold that so-called anti-stacking language in a policy
endorsement, limiting the coverage of successive policies with respect to an additional
insured, imposes no such limitations with respect to a named insured in the same policy
where the "anti-stacking" language used in the endorsement does not clearly state the
intentions of the parties to apply the limitations to both the named insured and the additional
insured. We conclude that Doctor Jellen, in his individual capacity, is entitled to the full
limit of the indemnity provided by the policy without regard to ICA's effort to limit its
liability in relation to Doctor Jellen's professional corporation. The endorsements before us,
by their express terms, do not "vary, alter, waive or extend" the coverage provided Doctor
Jellen, in his individual capacity. It is for ICA, not this Court, to deal with the disparate
result that ICA's choice of language compels in this particular situation.
Since we have found no limitations on the coverage afforded by the two
policies that would defeat their application to the settlement agreed upon by the parties, we
find that both the 1985 and the 1986 policies are available to respond to the settlement
agreement of the parties. In lieu of taking the case to judgment, the parties agreed in their
settlement, in effect, that the damages sustained by reason of the Auber injury were at least
$2,000,000 and that ICA might be required to pay up to that sum if its coverage extended to
or beyond that limit. The total payment of $1,500,000 under the 1985 and 1989 policies
does not exceed the total amount of damages which the parties have agreed Mr. Auber
sustained by reason of the negligence of Doctor Jellen.
Appellants also assign as error the circuit court's denial of prejudgment interest.
They maintain they are entitled to prejudgment interest beginning May 28, 1992, the date of
the release by which the parties agreed to liquidate tort damages in the settlement agreement.
They base this claim on W.Va. Code 56-6-31 (1981), which provides for an award of
prejudgment interest on an award of special damages or liquidated damages.(4) Appellants
contend that this Court interpreted the statute as mandatory in Grove by and through Grove
v. Myers, 181 W.Va. 342, 382 S.E.2d 536 (1989). There the Court stated, "prejudgment
interest is recoverable, not as a matter of discretion, but as a matter of right, that is, as a
matter of law, in personal injury and wrongful death actions, unless the statute or court rule
in question provides otherwise." Id. at 346, 382 S.E.2d at 540.
Appellants have not considered the express provisions of their settlement agreement which fix the date upon which the right of further payment as a result of the declaratory judgment accrues. The parties provided in their settlement:
At the conclusion of the declaratory judgment action and
after the exhaustion of any and all appeal rights following, if it
is determined that additional coverage is available, Insurance
Corporation of America, will pay that coverage amount so
determined, up to but not exceeding an additional One Million
Five Hundred Thousand and No/100 Dollars ($1,500,000.00).
Where the parties to a settlement agreement have, by the terms of their
agreement, fixed the time at which money is to be paid, any right to receive interest on that
money runs from the date set by the parties for payment. In this case, the settlement
agreement, not the cited statute imposing prejudgment interest, controls the date upon which
interest begins to accrue, that is to say, at the exhaustion of the appeal rights which we are
here deciding.
Finally, appellants contend that the trial court also erred in failing to assess
appellees for appellants' attorney's fees. They claim that under the terms of the settlement
agreement, Doctor Jellen assigned his right to bring a declaratory judgment action against
ICA to determine the amount of coverage, thereby making the appellants first-party insureds.
Further, they claim they substantially prevailed and are therefore entitled to attorney's fees.
The pertinent language of the settlement agreement states:
Lewis R. Auber and Jo-Ann Auber, his wife, will
proceed to file a declaratory judgment action in the Circuit
Court of Ohio County, West Virginia, the purpose of which is
to determine if A. V. Jellen, M.D., and A. V. Jellen, M.D., P.C.,
possess any additional medical liability insurance coverage with
Insurance Corporation of America applicable to this claim, aside
from the Five Hundred Thousand and No/100 Dollars
($500,000.00) which has been paid . . . .
Note: It is the position of Insurance Corporation of
America that the total applicable medical liability insurance
coverage available in this matter is Five Hundred Thousand and
No/100 Dollars ($500,000.00) while Lewis R. Auber and Jo-Ann Auber, his wife, contend that additional coverage may
exist.
Appellants contend this settlement provision clearly assigned to them Doctor
Jellen's first-party rights against his insurance carrier and that in the declaratory judgment
action, they were at all times acting for Doctor Jellen, albeit as assignees. They claim to be
first-party claimants under the policy of insurance between Doctor Jellen and ICA. They
assert that because ICA contended there was $500,000 of insurance available in this matter
and the trial court found there was $1,500,000 of available insurance coverage, appellants
substantially prevailed. Appellants cite Aetna Casualty and Surety Company v. Pitrolo, 176
W.Va. 190, 342 S.E.2d 156 (1986), and Hayseeds, Inc. v. State Farm Fire and Casualty, 177
W.Va. 323, 352 S.E.2d 73 (1986), in support of their claim to attorney's fees.
Appellees argue Doctor Jellen did not assign his right in the policy to
appellants, but rather merely authorized appellants, under the settlement agreement, to bring
a declaratory judgment action against ICA to determine the limits of liability. Doctor Jellen
claims he manifested no intention to assign his rights under the 1989 policy to appellants.
We agree.
We find no words of assignment in the agreement authorizing appellants, rather
than Doctor Jellen, to proceed with the declaratory judgment petition. We note also that the
1989 policy expressly states that Doctor Jellen cannot assign or transfer his rights under the
policy. Appellants are not first-party insureds but rather are third parties who were merely
authorized to bring in their own names a declaratory judgment action against another's
insurer to determine the amount of available coverage. The cases appellants cite involve
actions brought by a policyholder against his own insurer. That is not the situation in the
case at bar. Here, we have third parties bringing an action against the insurance carrier of
another. Those third parties have expressly waived any claim of bad faith against the carrier.
In the circumstances before us, we decline to expand our prior holdings regarding attorney
fees to situations where third parties bring action against the insurance carrier of another.
We hold that when an insured or insurer, acting under a settlement agreement, simply
authorizes a third party to the settlement to bring a declaratory judgment action against the
insurer to determine the insurer's limits of liability insurance coverage, the party bringing the
action is not a first-party insured and is therefore not entitled to attorney's fees.
For the reasons stated, we affirm the judgment of the Circuit Court of Ohio
County.
Affirmed.
1. 1The contractual description of four of such examinations as one "incident" for purposes of insurance coverage under the 1989 claims-made insurance policy in no way determines whether the case before us involves one "continuing" tort or a series of discrete events, each giving rise to a cause of action. In specifying that "all injury resulting from a series of acts or omissions in providing medical services to one person . . ." would be considered one "incident" for policy limit purposes, it is obvious that the language is inclusive of multiple injuries, for instance to different parts of the body, whether occurring at one time or in a "series" of connected or separate, discrete events.
2. 2The 1985 endorsement providing coverage to the professional corporation contained the
following additional language:
COVERAGE IS HEREBY EXTENDED TO THE
PROFESSIONAL CORPORATION NAMES BELOW TO
INCLUDE ANY LIABILITY ARISING OUT OF THE
RENDERING OF HEALTH CARE SERVICES BY SAID
CORPORATION -
A. V. JELLEN INC.
COVERAGE EXTENDED UNDER THIS ENDORSEMENT
IS SUBJECT TO A ONE-TIME LIMIT AND SHALL NOT
SERVE TO HAVE A CUMULATIVE "STACKING" EFFECT
WITH ENDORSEMENTS ISSUED TO ANY OTHER
INSURANCE CORPORATION OF AMERICA POLICIES
WHEREIN THE PROFESSIONAL ASSOCIATION,
CORPORATION OR PARTNERSHIP NAMED HEREIN
APPEARS AGAIN AS AN ADDITIONAL NAMED
INSURED.
Nothing herein contained shall be held to vary, alter, waive or extend the amount of coverage or any of the terms, conditions, provisions, agreements or limitations of the above mentioned
Policy, other than as expressly set forth above.
The 1989 endorsement contained the following additional language:
COVERAGE IS EXTENDED TO THE PROFESSIONAL
ASSOCIATION, CORPORATION OR PARTNERSHIP
NAMES BELOW TO INCLUDE ANY
ASSOCIATION/CORPORATION OR PARTNERSHIP
LIABILITY BUT ONLY IF ARISING OUT OF THE
RENDERING OF HEALTH CARE SERVICES BY YOU.
A. V. JELLEN INC.
COVERAGE EXTENDED UNDER THIS ENDORSEMENT
IS SUBJECT TO A ONE-TIME LIMIT AND WILL NOT
SERVE TO HAVE A CUMULATIVE "STACKING" EFFECT
WITH ENDORSEMENTS TO ANY OTHER POLICIES
ISSUED BY US [ICA] WHERE THE PROFESSIONAL
ASSOCIATION/CORPORATION/PARTNERSHIP NAMES
ABOVE APPEARS AGAIN AS AN ADDITIONAL NAMED
INSURED.
Nothing herein contained shall be held to vary, alter, waive or extend the amount of coverage or any of the terms, conditions, provisions, agreements or limitations of the above mentioned Policy, other than as expressly set forth above.
3. 3Additional cases adopting this rule include: State v. Janicki, 188 W.Va. 100, 422 S.E.2d 822 (1992); D'Annunzio v. Security-Connecticut Life Ins. Co., 186 W.Va. 39, 410 S.E.2d 275 (1991); Horace Mann Insurance Company v. Leeber, 180 W.Va. 375, 376 S.E.2d 581 (1988); Burr v. Nationwide Mutual Insurance Co., 178 W.Va. 398, 359 S.E.2d 626 (1987); Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986); Huggins v. Tri-County Bonding Co., 175 W.Va. 643, 337 S.E.2d 12 (1985); Shamblin v. Nationwide Mutual Insurance Co., 175 W.Va. 337, 332 S.E.2d 639 (1985), quoting syl. pt. 2, Surbaugh v. Stonewall Casualty Co., 168 W.Va. 208, 283 S.E.2d 859 (1981); Prete v. Merchants Property Insurance Company of Indiana, 159 W.Va. 508, 223 S.E.2d 441 (1976); Marson Coal Company, Inc. v. Insurance Company of the State of Pennsylvania, 158 W.Va. 146, 210 S.E.2d 747 (1974); Keffer v. Prudential Insurance Company of America, 153 W.Va. 813, 172 S.E.2d 714 (1970).
4. 4West Virginia Code 56-6-31 provides:
Except where it is otherwise provided by law, every judgment or decree for the payment of money entered by any court of this State shall bear interest from the date thereof, whether it be so stated in the judgment or decree or not: Provided, that if the judgment or decree, or any part thereof, is for special damages, as defined below, or for liquidated damages, the amount of such special or liquidated damages shall
bear interest from the date the right to bring the same shall have accrued, as determined by the court. Special damages includes lost wages and income, medical expenses, damages to tangible personal property, and similar out-of-pocket expenditures, as determined by the court. The rate of interest shall be ten dollars upon one hundred dollars per annum, and proportionately for a greater or lesser sum, or for a longer or shorter time, notwithstanding any other provisions of law.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.