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ProAssurance Specialty Insurance Company, Inc. v. McCullough

United States District Court, D. Rhode Island

September 12, 2019




         Filed as a declaratory judgment action pursuant to 28 U.S.C. § 2201, this case is an insurance coverage dispute pitting a provider of professional services insurance to physicians, ProAssurance Specialty Insurance Company, Inc. (“ProAssurance”), against its insured, Ricky W. McCullough, M.D., and a certified nurse assistant/mental healthcare worker (“CNA”) employed by Roger Williams Medical Center (“RWMC”), Barbara Valletta. The case arises out of an incident that occurred on May 21, 2012, when Dr. McCullough was treating an intoxicated patient in the emergency room, assisted by Ms. Valletta in her capacity as a CNA. When Ms. Valletta repeatedly raised her voice at, grabbed, pushed and shook the patient, Dr. McCullough believed she had “kind of crossed over the line” and restrained her by grabbing her by the arm. Ms. Valletta claimed that this action amounted to negligence, assault and battery and negligent infliction of emotional distress and sued Dr. McCullough in Rhode Island Superior Court for lost wages, medical expenses and pain and suffering, among other damages. Claiming that Ms. Valletta's Superior Court complaint alleged a “professional incident” covered by the ProAssurance policy, Dr. McCullough demanded that it defend the action. ProAssurance responded by invoking the definitions of “professional incident” and “professional services, ” as well as the exclusion for “any obligation . . . for which any carrier as insurer may be held liable under any workers' compensation . . . law, ” among others, and took the position that it had no duty to defend or to indemnify Dr. McCullough. It nevertheless agreed to provide a defense as a courtesy under a full reservation of rights. To clarify its obligations, it initiated this declaratory judgment action properly based on diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).

         ProAssurance's motion for summary judgment asks the Court to construe the plain meaning of the words used in its Health Care Professional Liability Policy (the “Policy”) and to declare that it has no duty to defend or to indemnify Dr. McCullough in connection with Ms. Valletta's claim. Dr. McCullough's cross motion asks the Court to declare the opposite. Ms. Valletta asks the Court to deny ProAssurance's motion for summary judgment because she agrees with Dr. McCullough's argument that the incident is covered by the Policy; she also asserts that ProAssurance delayed in initiating this declaratory judgment action and that her rights are not limited by the exclusions in the Policy because she is not a party to it.

         The cross motions of ProAssurance and Dr. McCullough have been referred to me for report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). While Dr. McCullough and Ms. Valletta apparently continue to contest vigorously the facts arising from the incident, including whether his conduct gives rise to liability and whether and to what extent his conduct caused any injury, the facts that are material to this declaratory judgment action are undisputed and the matter is ripe for determination. For the reasons that follow, I find the Policy to be clear and unambiguous and recommend that the Court declare that that ProAssurance has a duty to defend and indemnify because the incident arose out of the rendering of professional services. Nevertheless, I also recommend that the Court declare that ProAssurance's duty to defend and indemnify is cabined by the unambiguous language of Exclusion G, which eliminates Policy coverage for any obligations based on Ms. Valletta's expenses for reasonable and necessary medical treatment, lost wages and/or lost earning capacity, all of which are potential liabilities of the insurer that was liable to pay, and did pay, workers' compensation coverage to Ms. Valletta in connection with the incident under Rhode Island workers' compensation law. See generally R.I. Gen. Laws § 28-33-1, et seq.


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

         On December 17, 2013, Ms. Valletta filed a Complaint suing Dr. McCullough in the Rhode Island Superior Court. PSUF ¶ 11; PSUF Ex., ECF No. 12-1[2] (“Valletta Compl.”). It alleges that Dr. McCullough committed an assault on her while she was working in the course of her employment at RWMC. Valletta Compl. ¶¶ 4, 7, 10, 11, 14, 17. The pleading has three Counts - first, negligence in breach of the duty to provide a safe and secure atmosphere; second, assault and battery in intentionally causing bodily contact; and third, negligent infliction of emotional distress by causing severe emotional distress accompanied by physical symptoms. Id. ¶¶ 4-19. The Valletta Complaint seeks damages for “severe personal injuries, great pain and suffering, . . . tremendous medical expenses, . . . loss of enjoyment of life, . . . lost wages and/or lost earning capacity, and . . . other great damage, ” as well as for “severe emotional distress.” Id. ¶¶ 8, 12, 19.

         On December 31, 2013, Dr. McCullough sought defense coverage from ProAssurance as to the Valletta Complaint. PSUF ¶ 12; PSUF Ex., ECF No. 12-12. Several weeks later, Dr. Keri Gardner of NES, on behalf of ProAssurance, advised Dr. McCullough that the Policy does not provide defense or indemnity coverage as to the Valletta Complaint, as the Policy does not provide coverage for claims of injury to non-patients; nevertheless ProAssurance agreed that it would provide a courtesy defense to Dr. McCullough under a full reservation of its rights. PSUF ¶¶ 5, 13; PSUF Ex., ECF No. 12-13. Since that time, ProAssurance has provided a defense to Dr. McCullough in connection with the Valletta Complaint, at all times under a full reservation of rights. PSUF ¶¶ 15, 16, 18. The Valletta Complaint remains pending.

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


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

         The Policy terms applicable to these arguments are below.

         A. Definitions

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

PSUF Ex., ECF No. 12-3 at 4-5 (emphasis in original) (“Policy”).

         B. ...

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