Hood v. Cotter

• Decision Date: 02 December 2008
• Docket Number: No. 2008-C-0215.,No. 2008-C-0237.,2008-C-0215.,2008-C-0237.
• Parties: Carl HOOD v. Mark M. COTTER, M.D.
• Court: Louisiana Supreme Court

5 So.3d 819

Carl HOOD v. Mark M. COTTER, M.D.

No. 2008-C-0215.

No. 2008-C-0237.

Supreme Court of Louisiana.

December 2, 2008.

Rehearing Denied January 30, 2009.

Milling, Benson, Woodward, Normand Francis Pizza, New Orleans, for applicant in 2008-C-0215.

Roedel, Parsons, Koch, Blanche, Balhoff & McCollister, David Alva Woolridge, Jr., Larry Michael Roedel, Baton Rouge; Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Vance A. Gibbs, Deborah Johnson Juneau; Sumpter B. Davis, III, East Baton Rouge, for respondent in 2008-C-0215.

Joel Edward Gooch, Lafayette, for amicus curiae, NCMIC Insurance Company.

Roedel, Parsons, Koch, Blanche, Balhoff & McCollister, David Alva Woolridge, Jr., Larry Michael Roedel, Baton Rouge, for applicant in 2008-C-0237.

Milling, Benson, Woodward, Normand Francis Pizza, New Orleans; Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Vance A. Gibbs, Deborah Johnson Juneau; Sumpter B. Davis, III, East Baton Rouge, for respondent in 2008-C-0237.

KIMBALL, Justice.

We granted certiorari in this case to determine whether the coverage provision in a claims-made medical malpractice liability insurance policy, which denies coverage for medical malpractice that occurred during the policy period but was first made and reported after the policy period, violates La. R.S. 22:629. That statute prohibits any condition, stipulation or agreement in an insurance contract from limiting a right of action against the insurer to a period of less than one year from the time when the cause of action accrues in connection with all insurances unless otherwise specifically provided in the Insurance Code. We find the claims-made policy at issue denies coverage for plaintiff's claim, but does not limit plaintiff's right of action against the insurer in violation of La. R.S. 22:629. Additionally, we find that because defendant's qualification under the Medical Malpractice Act takes effect and follows the same form as the underlying medical malpractice insurance, and because defendant did not pay the applicable surcharge by purchasing the relevant tail coverage, he is not a qualified health care provider. Summary judgment is therefore appropriate in this case.

Facts and Procedural History

In April 2003, Carl Hood, plaintiff, sought treatment from Dr. Mark Cotter, defendant, for lower back pain, sleeping difficulties, and anxiety. The petition in this matter alleges that Defendant prescribed a regimen of narcotic drugs with no physical examination or diagnostic testing from April 2003 until August 2003. On September 5, 2003, defendant discharged plaintiff from his care. On April 29, 2004, plaintiff filed suit against defendant alleging that the cause of his symptoms was left undiagnosed and untreated, and that he is addicted to the narcotic drugs prescribed by defendant.¹ On February 15, 2005, defendant amended his petition to name defendant's medical malpractice insurer, Louisiana Medical Mutual Insurance Company ("LAMMICO"), as a defendant. On July 5, 2005, the Louisiana Patient's Compensation Fund Oversight Board ("Board") intervened in the suit seeking a decision as to whether defendant is covered by the Medical Malpractice Act ("MMA"), La. R.S. 40:1299.41 et seq. for plaintiffs claim.

LAMMICO issued a professional liability policy of insurance to defendant from January 1, 2003, to January 1, 2004, covering "[a]ll sums which the insured shall become legally obligated to pay as damages because of injury, to which this insurance applies, from a medical incident resulting from a negligent act, error, or omission in the rendering or failure to render professional services, which occurs subsequent to the retroactive date [of January 1, 1997], and for which claim is first made against the insured and reported to the Company during the policy period." (Emphasis added.) This so-called claims-made policy lapsed because of nonrenewal on January 1, 2004.² Prior to the expiration of defendant's coverage under this policy, LAMMICO offered to provide defendant with a reporting endorsement ("tail coverage") that would have insured him against claims that arose from medical incidents occurring during the policy period, but were first made and reported after that period; however, defendant did not purchase tail coverage.

On January 3, 2006, LAMMICO filed a motion for summary judgment asserting that its insurance policy did not provide coverage for plaintiff's claim. LAMMICO pointed out that its policy was a claimsmade policy that expressly limited coverage to claims first made and reported to LAMMICO while the policy was in force. LAMMICO argued that although the tortious conduct alleged by plaintiff against defendant occurred while the policy was in force, the complaint was not made to defendant, LAMMICO, or the Patient's Compensation Fund ("PCF") during the policy period. Further, LAMMICO asserted that defendant was not a qualified health care provider under the MMA since his qualification was effective only for "the same period and following the same form" as his filed policy of professional liability insurance. La. R.S. 40:1299.42.

In opposition to LAMMICO's motion for summary judgment, plaintiff argued that LAMMICO's claims-made provision is void as it violates La. R.S. 22:629, which provides that "[n]o insurance contract shall contain any condition, stipulation or agreement limiting right of action against the insurer to a period of less than one year from the time when the cause of action accrues in connection with all other insurances unless otherwise specifically provided in this [Insurance] Code."³ Plaintiff also cited the first circuit's decision in Hedgepeth v. Guerin, 96-1044 (La.App. 1 Cir. 3/27/97), 691 So.2d 1355, writ denied, 97-1377 (La.9/26/97), 701 So.2d 983, as support for its position that the provision violates the statute and is unenforceable. Defendant also opposed LAMMICO's motion for summary judgment on the same grounds as plaintiff.

Subsequently, the Board filed a motion for summary judgment. The Board, citing La. R.S. 40:1299.42(A), stated that to be qualified under the MMA, a healthcare provider must pay the proper surcharge and cause to be filed with the Board proof of financial responsibility (here the underlying insurance coverage). The Board argued there was no PCF coverage for plaintiff's claim because the LAMMICO policy provides no underlying coverage for the claim and defendant failed to purchase a PCF extended reporting endorsement or pay the tail coverage surcharge.

Plaintiff opposed the Board's motion for summary judgment by again arguing that LAMMICO's claims-made provision violates La. R.S. 22:629 and is therefore void. Plaintiff asserted the statute "basically extends the LAMMICO coverage to one year from the date of the tort" and this extension applies to qualification under the MMA as well. Defendant opposed the Board's motion on similar grounds.

A hearing on both motions for summary judgment was held on March 27, 2006. In oral reasons for judgment, the district court indicated it felt constrained by the first circuit's decisions in Hedgepeth v. Guerin, 96-1044 (La.App. 1 Cir. 3/27/97), 691 So.2d 1355, writ denied, 97-1377 (La.9/26/97), 701 So.2d 983, and Bennett v. Krupkin, 99-2702 (La.App. 1 Cir. 12/22/00), 779 So.2d 923, writ denied, 01-0193 (La.3/30/01), 788 So.2d 1190, to find the LAMMICO policy provided coverage for plaintiff's claim. Consequently, it denied LAMMICO's motion for summary judgment. Regarding the Board's motion for summary judgment, the district court determined that although it found the LAMMICO policy provided underlying coverage for the claim, defendant did not pay the applicable surcharge to the PCF. Therefore, the district court found defendant did not have PCF coverage for the claim and granted the Board's motion, dismissing it with prejudice.

Subsequently, LAMMICO sought supervisory review of the denial of its motion for summary judgment, which was denied. Hood v. Cotter, 06-1086 (La.App. 1 Cir. 9/5/06) (unpub'd writ action). LAMMICO also appealed the granting of the Board's motion for summary judgment to the court of appeal. Hood v. Cotter, 06-1390 (La. App. 1 Cir. 12/28/07), 978 So.2d 988. In its appeal, LAMMICO argued that the district court erred in determining its policy provided coverage for plaintiff's claims. Thus, LAMMICO's appeal included complaints against the district court's denial of its motion for summary judgment. Before reaching the merits of the appeal, the court, en banc, noted, "Arguably, the present appeal is restricted to the issue of PCF's coverage for the claims filed by [plaintiff]." Hood v. Cotter, 06-1390, at p. 4, 978 So.2d at 992. Nonetheless, the court stated, it has allowed review of the denial of a motion for summary judgment filed by the appellant in conjunction with its review of the granting of a motion for summary judgment against the appellant when the issues involved were "identical." The court concluded that in this case, the issues involved in the granting of summary judgment in favor of the Board "are directly related" to the issues involved in LAMMICO's motion for summary judgment. Consequently, the court found that a review of the issue of LAMMICO's coverage in the appeal before it was appropriate.

Turning to the merits, the court of appeal reversed the grant of summary judgment in favor of the Board and affirmed the denial of LAMMICO's motion for summary judgment. Citing its prior decision in Hedgepeth, the court determined that "[b]ecause the policy provision at issue in this case effectively reduced the prescriptive period for making a claim against LAMMICO to less than the statutorilymandated period, the policy provision is in violation of the statutory law that prohibits the limiting of a right of action against an insurer to less than one year." Hood, 06-1390 at p. 8, 978 So.2d at 994. Thus, finding the policy violated La. R.S. 22:629, the court of appeal declared that portion of...