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State Automobile Mutual Insurance Co. v. Allegheny Medical Services

United States District Court, S.D. West Virginia, Beckley Division

April 17, 2018




         The Court has reviewed State Automobile Mutual Insurance Company's Motion for Summary Judgment (Document 26), the Memorandum of Law in Support (Document 27), Responsible Pain and Aesthetic Management PLLC and J. Jorge A. Gordinho's Memorandum in Opposition to Plaintiff's Motion for Summary Judgment (Document 31), the Response on Behalf of A.W., N.C., and C.N. to Plaintiff's Motion for Summary Judgment (Document 32), and the Reply in Support of Statue Automobile Insurance Company's Motion for Summary Judgment (Document 33). In addition, the Court has reviewed all exhibits, as well as State Automobile Mutual Insurance Company's Amended Complaint for Declaratory Relief (Document 23). For the reasons stated herein, the Court finds that the motion for summary judgment should be granted.


         The Plaintiff, State Automobile Mutual Insurance Company (State Auto) filed its initial complaint seeking declaratory relief on April 10, 2017, and filed an amended complaint on August 22, 2017. The named Defendants are Allegheny Medical Services, doing business as Responsible Pain and Aesthetic Management PLLC (Responsible Pain), J. Jorge A. Gordinho, A.W., N.C., C.N., Danielle Mathis, and Florence Harris. Responsible Pain and Mr. Gordinho[1] operated a medical office, and obtained business owners' insurance policies, effective December 17, 2010 through December 17, 2016, from State Auto. A.W., N.C., C.N., Ms. Mathis, and Ms. Harris (State Plaintiffs) are former patients who have brought suit in state court, with various claims arising from allegations that Mr. Gordinho and/or other staff at Responsible Pain engaged in inappropriate sexual conduct toward them. State Auto filed this suit seeking a declaration that the Policy does not provide coverage related to the state court suits and that it has no duty to provide a defense in that litigation.

         Responsible Pain was a medical office specializing in pain management and addiction treatment. Mr. Gordinho was the sole organizer, member, and officer. He founded the practice in March 2010, and maintained a 100% ownership interest until February 2015, when another doctor gained a 1% interest. That doctor resigned and returned the 1% interest in September 2015.

         State Auto provided insurance coverage to Allegheny Medical Services, d/b/a Responsible Pain. New policies were issued for each coverage period, but the policies contain the same relevant language. As relevant herein, the policies provided coverage for “bodily injury” caused by an “occurrence.” (Policy at 84, att'd as Pl.'s Ex. A to Pl.'s Reply) (Document 33-1).[2] “Bodily injury” is defined as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” (Id. at 94.) An “occurrence” is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Id. at 95.) The Policies exclude bodily injury “expected or intended from the standpoint of the insured.” (Id. at 84.) Where the Policy covers a limited liability company (LLC), the LLC is an insured, and “members are also insured, but only with respect to the conduct of [the] business, ” as are managers “with respect to their duties as…managers.” (Id. at 90.)

         The State Plaintiffs' underlying complaints include allegations that Mr. Gordinho groped their breasts, made sexual comments during treatment, made sexual overtures seeking to meet elsewhere, and otherwise sexually harassed them. Their legal causes of action[3] include claims of battery, assault, negligence, negligent hiring, supervision, or retention, intentional and negligent infliction of emotional distress, invasion of privacy and gender discrimination. A.W., C.N., and N.C. assert damages including severe emotional distress, emotional, psychological, and mental harm, anxiety, humiliation, annoyance and inconvenience, invasion of privacy, emotional distress, pain and suffering, mental anguish, loss of ability to enjoy life, future medical expenses, and other damages. (A.W. Complaint, Document 23-3; C.N. Complaint, Document 23-4; N.C. Complaint, Document 23-5.) Ms. Mathis and Ms. Harris assert damages including past and future medical expenses, pain and suffering, humiliation, annoyance, inconvenience, emotional distress, permanent impairment, embarrassment, and loss of enjoyment of life. (Mathis Complaint, Document 23-6; Harris Complaint, Document 23-7.) The state claims remain pending with ongoing discovery.


         The well-established standard in consideration of a motion for summary judgment is that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a)-(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ'g Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News & Observer, 597 F.3d at 576.

         The moving party bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp., 477 U.S. at 322-23. When determining whether summary judgment is appropriate, a court must view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving party must offer some “concrete evidence from which a reasonable juror could return a verdict in his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party must come forward with more than ‘mere speculation or the building of one inference upon another' to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at *3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)).

         In considering a motion for summary judgment, the court will not “weigh the evidence and determine the truth of the matter, ” Anderson, 477 U.S. at 249, nor will it make determinations of credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W.Va. Mar. 31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If disputes over a material fact exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party, ” summary judgment is inappropriate. Anderson, 477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, ” then summary judgment should be granted because “a complete failure of proof concerning an essential element . . . necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 322-23.


         State Auto argues that it is entitled to summary judgment, and an accompanying declaratory judgment, because the Policies do not provide coverage for the allegations against Responsible Pain and Mr. Gordinho. It argues that there was no “occurrence” as defined by the Policies, that the State Plaintiffs do not allege that they suffered “bodily injury, ” that the “intentional acts” exclusion applies to any otherwise covered claims, and that the Policies exclude injuries sustained during medical treatment. The Defendants[4] argue that the State Claims are not limited to intentional conduct, but include claims sounding in negligence for which coverage is available. In addition, they contend that the underlying damage claims include physical, as well as psychological, harm. They further argue that the motion for summary judgment is premature, as the State Plaintiffs continue to amend their pleadings as discovery progresses.[5] The Defendants stress that an insurer's obligation to defend is broader than the obligation to provide coverage, and State Auto must provide a defense for Responsible Pain and Mr. Gordinho if any of the underlying claims are susceptible to an interpretation for which the Policies provide coverage.

         In West Virginia, courts “accord the language of an insurance policy its common and customary meaning.” Boggs v. Camden-Clark Mem'l Hosp. Corp., 693 S.E.2d 53, 57-58 (2010). If, after giving the language its customary meaning, the provisions in an insurance policy “are plain and unambiguous and where such provisions are not contrary to a statute, regulation, or public policy, the provisions will be applied and not construed.” Syl. pt. 1, Kelly v. Painter, 504 S.E.2d 171, 172 (1998). Courts are to determine whether a contract is ambiguous as a question of law. Syl. pt. 4, Blake v. State Farm Mut. Auto. Ins. Co., 685 S.E.2d 895, 897 (2009) (noting that “[t]he mere fact that parties do not agree to the construction of a contract does not render it ambiguous”). Courts must give full effect to the plain meaning of clear and unambiguous insurance policy contract provisions. Id., Syl. pt. 2. If, however, a provision is ambiguous, courts are to construe it “against the drafter, especially when dealing with exceptions and words of limitation.” Boggs, 693 S.E.2d at 58 (internal quotation marks and citations omitted). Regardless of whether the language is ambiguous or unambiguous, ...

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