United States District Court, S.D. West Virginia, Charleston
MEMORANDUM OPINION AND ORDER
T. COPENHAVER, JR., SENIOR UNITED STATES DISTRICT JUDGE
is plaintiff Westfield Insurance Company's
(“Westfield”) motion for summary judgment, filed
November 30, 2017.
filed this declaratory judgment action on February 14, 2017,
pursuant to 28 U.S.C. § 2201 and the West Virginia
Uniform Declaratory Judgments Act, W.Va. Code 55-13-1 et
seq. See Compl., ECF No. 1 (“Westfield
Compl.”). The court has diversity jurisdiction over
this matter pursuant to 28 U.S.C. § 1332. Defendants Dr.
Steven Matulis and his former employer, Charleston
Gastroenterology Associates, PLLC (“Charleston
Gastroenterology”), have been sued in the Circuit Court
of Kanawha County, West Virginia by several former female
patients. Ten patients are joined here as claimant
defendants (“claimants”): T.W., K.H., T.F., J.L.,
A.G., B.D., A.H., A.M., C.S. and J.W. See id.
¶¶ 4-13, 16. These claimants are identified by
their initials for privacy reasons.
state court lawsuits arise from medical procedures (e.g.,
colonoscopies) that Dr. Matulis performed on the claimants
while each of them was anesthetized. See id. ¶
17. The lawsuits allege that Dr. Matulis sexually assaulted
the claimants while they were under anesthesia and
incapacitated, and/or that Dr. Matulis performed the
colonoscopies while distracted or impaired due to his alleged
proclivity for sexually assaulting unconscious female
patients, such that the colonoscopies were not medically
reliable or failed to meet the standard of care owed by a
doctor to a patient. See id.
facts giving rise to each alleged instance of misconduct vary
from claimant to claimant. One or more of the claimants
allege that an employee or employees of the Charleston Area
Medical Center, Memorial Division, where their medical
procedures were performed, witnessed the sexual assault by
Dr. Matulis. See id. ¶ 18. One or more of the
claimants also allege that the employee or employees who
witnessed the sexual assault reported the incident to the
hospital administration. See id. ¶ 19.
specific claims against Dr. Matulis include battery, tort of
outrage, intentional and negligent infliction of emotional
distress, false detention, invasion of privacy, and medical
negligence. See, e.g., Pl.'s Mot. Summ. J., ECF
No. 113-1 to ECF No. 113-11, Exs. A to K. The claims against
Charleston Gastroenterology include negligent and reckless
retention, intentional and negligent infliction of emotional
distress, negligent supervision, invasion of privacy, and
vicarious liability for Dr. Matulis's acts. See,
e.g., id. In addition, certain claimants assert
class claims on behalf of other female patients of Dr.
Matulis who may not know whether they were sexually assaulted
or otherwise physically injured during a medical procedure
performed by Dr. Matulis. See, e.g., T.F.'s
Compl., ECF No. 113-10, Ex. J, ¶¶ 36-49. Several
claimants have not yet initiated lawsuits in state court but
have filed a “Notice of Claim” to notify Dr.
Matulis and Charleston Gastroenterology of a potential
medical malpractice suit, as required by West Virginia Code
§ 55-7B-6(f). See, e.g., Pl.'s Mot. Summ.
J., ECF 113-5 to ECF 113-8, Exs. E to H. These Notices of
Claim contain similar factual allegations found in the
complaints filed in state court.
provided a general commercial liability insurance policy,
Policy Number BOP 3157951 (“the Policy”), to
Charleston Gastroenterology for coverage from March 21, 2015
through March 21, 2016. Westfield Compl., at 4-5. All the
relevant incidents occurred during the time period of the
Policy. See id. The Policy provides
liability coverage to “pay those sums that the insured
becomes legally obligated to pay as damages because of”
the following: (1) “bodily injury, ” (2)
“property damage, ” or (3) “personal and
advertising injury.” Pl.'s Mot. Summ. J., ECF
113-12, Ex. L (“Policy”), at 71 (Section
II.A.1.a). The Policy also provides that Westfield has
“the right and duty to defend the insured against any
‘suit' seeking those damages.” Id.
The Policy covers both Charleston Gastroenterology and Dr.
Matulis as an employee of Charleston Gastroenterology
“for acts within the scope of [his] employment by
[Charleston Gastroenterology] or while performing duties
related to the conduct of [Charleston Gastroenterology's]
business.” See id. at 82 (Section
Policy applies to “bodily injury” and
“property damage” only if three requirements are
satisfied, two of which are particularly pertinent here: (1)
the “bodily injury” or “property
damage” is “caused by an ‘occurrence'
that takes place in the ‘coverage territory,
'” and (2) the “bodily injury” or
“property damage” “occurs during the policy
period.” Id. at 71 (Section II.A.1.b(1).
“Bodily injury” is defined as “bodily
injury, sickness or disease sustained by a person, including
death.” Id. at 85 (Section II.F.3).
“Occurrence” is defined as “an accident,
including continuous or repeated exposure to substantially
the same general harmful conditions.” Id. at
86 (Section II.F.13). The claimants did not allege property
damage claims in the state court lawsuits or the Notices of
Claim, so the court does not review further the relevant
sections of the Policy on “property damage.”
Policy also covers “‘personal and advertising
injury' caused by an offense” arising out of
Charleston Gastroenterology's business only if the
offense was committed in the “coverage territory”
during the Policy period. Id. at 72 (Section
II.A.1.b(2)). “Personal and advertising injury”
is defined as “injury, including consequential
‘bodily injury'” arising out of one or more
enumerated offenses, including, inter alia:
“[f]alse arrest, detention or
imprisonment, ” “[o]ral or written publication,
in any manner, of material that slanders or libels a
person, ” and “[o]ral or written publication, in
any manner, of material that violates a person's
right of privacy.” See id. at 87
(Section II.F.14) (emphasis added).
Policy limits coverage based on three relevant exclusions.
First, the “Expected or Intended Injury”
exclusion applies to “‘[b]odily injury' or
‘property damage' expected or intended from the
standpoint of the insured.” Id. at 74
II.B.1.a). Second, the “Professional Services”
exclusion applies to “‘[b]odily injury',
‘property damage' or ‘personal and
advertising injury' caused by the rendering or failure to
render any professional service.” Id. at 76
(Section II.B.1.j). “Professional services”
include, inter alia, “[m]edical, surgical,
dental, X-ray or nursing services treatment, advice or
instruction, ” and “[a]ny health or therapeutic
service treatment, advice or instruction.” Id.
(Section II.B.1.j(4)-(5)). The exclusion notably states that:
This exclusion applies even if the claims allege
negligence or other wrongdoing in the
supervision, hiring, employment, training or
monitoring of others by an insured, if the
“occurrence” which caused the “bodily
injury” or “property damage”, or the
offense which caused the “personal and advertising
injury”, involved the rendering or failure to
render of any professional service.
Id. at 78 (Section II.B.1.j) (emphasis added). Third
and final, the “Personal and Advertising Injury”
exclusion applies, inter alia, to any such injury
“[c]aused by or at the direction of the insured with
the knowledge that the act would violate the rights of
another and would inflict ‘personal and advertising
injury.'” Id. at 79 (Section II.B.1.p(1)).
Pursuant to the Policy, Westfield will not pay medical
expenses for “bodily injury” excluded from
coverage. See id. at 79 (Section II.B.2.g).
on the Policy, Westfield filed this case seeking a
declaratory judgment that the Policy does not provide
coverage for the defense or indemnification of any of the
claims asserted by the claimants in state court in connection
with the alleged sexual assault and/or the provision of
inadequate medical care by Dr. Matulis. See
Westfield Compl., at 15. Westfield also asserts that the
Policy does not provide coverage for the defense or
indemnification of any future related claims that might be
filed against Dr. Matulis or Charleston Gastroenterology,
including any class actions that may be certified in any of
the underlying state civil actions. See Id. Finally,
based on the lack of coverage, Westfield asserts that it does
not have a duty to defend or indemnify Dr. Matulis or
Charleston Gastroenterology in the existing state civil
actions or in related actions that might be brought. See
id. at 16.
filed the motion for summary judgment and a memorandum of law
in support on November 30, 2017. See Pl.'s Mot.
Summ. J., ECF 113 (“Motion”); Pl.'s Memo.
Supp. Mot. Summ. J., ECF 114 (“Memo”). Four
claimants -- J.L., K.H., J.W., and A.G. -- filed opposition
briefs between December 14, 2017 and December 20, 2017.
See J.L.'s Resp., ECF No. 120 (“J.L.'s
Resp.”); K.H.'s Memo. Oppos., ECF No. 121
(“K.H.'s Resp.”); J.W.'s Resp., ECF No.
122 (“J.W.'s Resp.”); A.G.'s Resp., ECF
No. 123 (“A.G.'s Resp.”). Westfield filed a
combined reply on December 21, 2017 to address the opposition
briefs collectively. See Pl.'s Combined Reply,
ECF No. 124 (“Combined Reply”).
undisputed that both Dr. Matulis and Charleston
Gastroenterology are insured under the Policy and that the
claims arose from the coverage territory during the Policy
period. However, neither Dr. Matulis nor Charleston
Gastroenterology has appeared in this action to oppose
Westfield's position. Pursuant to Rule 55(a) of the
Federal Rules of Civil Procedure, Westfield filed a motion
for the entry of default judgment against Dr. Matulis and
Charleston Gastroenterology on October 26, 2017. See
Pl.'s Mot. Default J., ECF No. 95. The court granted the
motion and entered default judgment against Dr. Matulis and
Charleston Gastroenterology on February 14, 2018.
See Order, ECF No. 128.
after, claimant J.W. filed a civil action in the Circuit
Court of Kanawha County on March 1, 2018 (civil case no.
18-c-205). See J.W.'s Compl., ECF No. 134-1, Ex.
1. On March 8, 2018, J.W. filed a motion for leave to amend
her answer in this case to assert a counterclaim for
declaratory judgment against Westfield, pursuant to Rule
15(a)(2) of the Federal Fules of Civil Procedure and Rule
16.1(f)(1) of the Local Rules of Civil Procedure for the
United States District Court for the Southern District of
West Virginia. See Def. J.W.'s Mot. Leave Am.
Answer, ECF No. 134. J.W.'s motion seeks a declaratory
judgment finding that the Policy “provides coverage for
some claims asserted by J.W.” against Dr. Matulis and
Charleston Gastroenterology in her state court lawsuit. Def.
J.W.'s Am. Answer, ECF No. 134-2, Ex. 2, at 10.
is entitled to summary judgment “if the pleadings, the
discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as
a matter of law.” Fed.R.Civ.P. 56(c). Material facts
are those necessary to establish the elements of a
party's cause of action. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).
Leave to amend answer.
Rule 15(a) of the Federal Rules of Civil Procedure, the court
“should freely give leave [to amend] when justice so
requires.” Alternatively, under Rule 15(d) of the
Federal Rules of Civil Procedure, the court “may, on
just terms, permit a party to serve a supplemental pleading
setting out any transaction, occurrence, or event that
happened after the date of the pleading to be
supplemented.” Rule 16(b) of the Federal Rules of Civil
Procedure directs that “a schedule may be modified only
for good cause.” Similarly, Rule 16(f)(1) of the Local
Rules of Civil Procedure for the Southern District of West
Virginia permits amendments to pleadings “for good
motion for leave to amend her answer to assert a counterclaim
for declaratory judgment against Westfield is based on
J.W.'s filed complaint in the Circuit Court of Kanawha
County, which she filed well after briefings had completed on
Westfield's motion for summary judgment. See
J.W.'s Compl., ECF No. 134-1, Ex. 1. The court takes
notice of A.G.'s filed complaint in state court. The
claims that J.W. alleges in her complaint are fully
considered by the court in this opinion as they are identical
to claims alleged by other claimants, including violation of
the right of privacy; false detention; medical negligence;
negligent hiring, retention, and supervision; negligent
infliction of emotional distress; and battery. See
id. ¶¶ 14-31. Inasmuch as these claims are
already considered, leave to amend on this basis is futile
and the court does not find good cause to allow the
complaint also raises an additional claim from J.W.'s
husband, alleging that the husband “has been deprived
of the consortium, society and comfort of his wife”
such that he has suffered and will continue to suffer mental
anguish. Id. ¶ 33. J.W. listed her husband as a
potential claimant in her Notice of Claims against Dr.
Matulis and Charleston Gastroenterology. See
J.W.'s Notice of Claim, ECF 115-1, Ex. M (against Dr.
Matulis); J.W.'s Notice of Claim, ECF 115-2, Ex. N
(against Charleston Gastroenterology). However, the listing
of this additional “claimant” does not change the
court's analysis or conclusion regarding summary judgment
because the husband's claim arises from the same conduct
as J.W.'s claim.
cases grounded in diversity jurisdiction, “federal
courts are to apply the substantive law the State in which
they are sitting would apply if the case had originated in a
State court.” Stonehocker v. Gen. Motors
Corp., 587 F.2d 151, 154 (4th Cir. 1978) (citing
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)).
Under West Virginia law, “[d]etermination of the proper
coverage of an insurance contract when the facts are not in
dispute is a question of law.” Syl. Pt. 1, Tennant
v. Smallwood, 568 S.E.2d 10, 11 ( W.Va. 2002).
in an insurance policy should be given its “plain,
ordinary meaning.” Syl. Pt. 8, Cherrington v. Erie
Ins. Prop. & Cas. Co., 745 S.E.2d 508, 511 ( W.Va.
2013) (citation omitted). “The interpretation of an
insurance contract, including the question of whether the
contract is ambiguous, is a legal determination . . .
.” Syl. Pt. 2, Riffe v. Home Finders Assocs.,
Inc., 517 S.E.2d 313, 314 ( W.Va. 1999); see
also Syl. Pt. 4, W. Virginia Fire & Cas. Co. v.
Stanley, 602 S.E.2d 483, 486 ( W.Va. 2004) (“The
question as to whether a contract is ambiguous is a question
of law to be determined by the court.”). “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.” Syl. Pt. 1, Christopher v. U.S.
Life Ins. Co. in City of New York, 116 S.E.2d 864, 864 (
W.Va. 1960); see also Glen Falls Ins. Co v. Smith,
617 S.E.2d 760, 767-68 ( W.Va. 2005). However, an insurance
contract is ambiguous if “reasonable people can differ
about the meaning.” Syl. Pt. 1, D'Annunzio v.
Sec.-Connecticut Life Ins. Co., 410 S.E.2d 275, 276 (
W.Va. 1991). All ambiguities are construed in favor of the
insured. Id.; see also Horace Mann Ins. Co. v.
Leeber, 376 S.E.2d 581, 584 ( W.Va. 1988) (“. . .
any ambiguity in the language of an insurance policy is to be
construed liberally in favor of the insured.”).
“An insurance policy should never be interpreted so as
to create an absurd result, but instead should receive a
reasonable interpretation, consistent with the intent of the
parties.” Syl. Pt. 2, D'Annunzio, 410
S.E.2d at 276.
insurance under West Virginia law creates two duties for the
insurer: a duty to defend and a duty to provide coverage
(i.e., to indemnify). See Aetna Cas. & Sur. Co. v.
Pitrolo, 342 S.E.2d 156, 160 ( W.Va. 1986). Generally,
an insurer's duty to defend is broader than the duty to
indemnify. Leeber, 376 S.E.2d at 584; Donnelly
v. Transportation Ins. Co., 589 F.2d 761, 765 (4th Cir.
1978). An insurer must defend its insured “if the claim
stated in the underlying complaint could, without amendment,
impose liability for risks the policy covers.”
Bowyer v. Hi-Lad, Inc., 609 S.E.2d 895, 912 ( W.Va.
2004); see also Pitrolo, 342 S.E.2d at 160
(“As a general rule, an insurer's duty to defend is
tested by whether the allegations in the plaintiff's
complaint are reasonably susceptible of an interpretation
that the claim may be covered by the terms of the insurance
policy.”). An insurer must look beyond the bare
allegations contained in the pleadings and “conduct a
reasonable inquiry into the facts in order to ascertain
whether the claims asserted may come within the scope of the
coverage that the insurer is obligated to provide.”
Syl. Pt. 6, Farmers & Mechs. Mut. Ins. Co. v.
Cook, 557 S.E.2d 801, 803 ( W.Va. 2001) (citation
omitted). For the duty to defend to arise, “[t]here is
no requirement that the facts alleged in the complaint
specifically and unequivocally make out a claim within the
coverage.” Pitrolo, 342 S.E.2d at 160
(citation omitted); see also Leeber, 376 S.E.2d at
584. An insurer must defend all the claims “[i]f part
of the claims against an insured fall within the coverage of
a liability insurance policy and part do not.”
Leeber, 376 S.E.2d at 584 (citing Donnelly,
589 F.2d at 765). However, the insurer is not required to
defend a case against the insured “if the alleged
conduct is entirely foreign to the risk insured
must liberally construe any questions regarding an
insurer's duty to defend in favor of the insured. See
Pitrolo, 342 S.E.2d at 160. Furthermore, “[w]here
the policy language involved is exclusionary, it will be
strictly construed against the insurer in order that the
purpose of providing indemnity not be defeated.” Syl.
Pt. 4, Cook, 557 S.E.2d at 803 (citation omitted).
Claims for the intentional sexual misconduct of Dr.
claimants allege the intentional tort of battery for having
suffered bodily injury as a result of being sexually
assaulted by Dr. Matulis during their respective medical
procedures. See, e.g., T.W.'s Am. Compl.,
ECF No. 113-2, Ex. B, ¶¶ 5-12; J.L.'s Compl.,
ECF No. 113-3, Ex. C, ¶¶ 19- 23; K.H.'s Compl.,
ECF No. 113-4, Ex. D, ¶ 8; B.D.'s Notice of Claim,
ECF No. 113-6, Ex. F, at 2. For these claims to be covered
under the Policy, the claims of bodily injury must have been
caused by an “occurrence” that took place in the
“coverage territory, ” during the period of the
Policy coverage, and was not known to have occurred before
the Policy period. See Policy, at 71 (Section
II.A.1.b(1)). It is undisputed that the claims of bodily
injury took place in the “coverage territory”
during the Policy period and were not known before the Policy
period. The court therefore considers whether the conduct
giving rise to the claims is an “occurrence.”
Policy defines an “occurrence” as “an
accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”
Id. at 86 (Section II.F.13). The Policy does not
define “accident.” In another case in which the
insurance policy at issue had the same definition of
“occurrence, ” the Supreme Court of Appeals of
West Virginia noted the following definition for
[a]n ‘accident' generally means an unusual,
unexpected and unforeseen event.... An accident is never
present when a deliberate act is performed unless some
additional unexpected, independent and unforeseen happening
occurs which produces the damage.... To be an accident, both
the means and the result must be unforeseen, involuntary,
unexpected, and unusual.
State Bancorp, Inc. v. U.S. Fid. & Guar. Ins.
Co., 483 S.E.2d 228, 234 ( W.Va. 1997) (per curiam)
(citations omitted) (alteration in original); see also
Columbia Cas. Co. v. Westfield Ins. Co., 617 S.E.2d 797,
800 ( W.Va. 2005) (applying this definition of
“accident”). “[T]he definition of an
‘occurrence' does not include actions which are
intended by the insured.” State
Bancorp, 483 S.E.2d at 235 (emphasis in original). Based
on these definitions, the court in StateBancorp found that the intentional acts of the
insured -- tort of outrage, tort of civil conspiracy, and