American Cas. Co. v. Health Care Indem., Inc.

• Decision Date: 29 April 2009
• Docket Number: Case No. 8:07-cv-421-T-33EAJ.
• Parties: AMERICAN CASUALTY COMPANY OF READING PENNSYLVANIA, Plaintiff, v. HEALTH CARE INDEMNITY, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

613 F.Supp.2d 1310

AMERICAN CASUALTY COMPANY OF READING PENNSYLVANIA, Plaintiff, v. HEALTH CARE INDEMNITY, INC., Defendant.

Case No. 8:07-cv-421-T-33EAJ.

United States District Court, M.D. Florida, Tampa Division.

April 29, 2009.

Linda C. Bell, Colliau Elenius Murphy Carluccio Keener & Morrow, Chicago, IL, Wayne T. Gill, Walton Lantaff Schroeder & Carson, LLP, West Palm Beach, FL, for Plaintiff.

Dinah Stein, Jean Kneale, John R. Anderson, Hicks, Porter, Ebenfeld & Stein, PA, Miami, FL, Michael A. Petruccelli, Fann, Petruccelli, PA, Ft. Lauderdale, FL, for Defendant.

ORDER

VIRGINIA M. HERNANDEZ COVINGTON, District Judge.

This matter comes before the Court upon consideration of Defendant HCI's motion for summary judgment (Doc. # 103) and Plaintiff ACC's motion for summary judgment (Doc. # 105), both filed on November 17, 2008. The cross motions for summary judgment are ripe for this Court's review. (Doc. ## 116, 118). Also before this Court is ACC's motion to strike, in whole or in part, the affidavit of Philip J. Spengler, II, Esq. filed in support of HCI's motion for summary judgment (Doc. # 117), which was filed on December 5, 2008. HCI filed a response in opposition to the motion to strike on December 16, 2008. (Doc. # 122).

Upon due consideration and for the reasons that follow, this Court grants HCI's motion for summary judgment. This Court denies ACC's motion for summary judgment and denies ACC's motion to strike.

I. Background

ACC and HCI are both insurance companies that provided insurance coverage to Dorothy Butler, a speech pathologist who is not a party to the present suit.

ACC's policy of insurance covered Butler's actions regardless of where she performed such services. HCI, on the other hand, provided insurance to Edward White Hospital and hospital employees (including Butler) to the extent that the employees were performing services at the Hospital.

The purpose of this suit is to determine the liability as between ACC and HCI with respect to a sizeable jury verdict returned against Butler after a wrongful death/tort trial in state court as well as the $373,783.77 total defense costs incurred by ACC in defending Butler in the litigation. (Doc. # 133 at 6).¹ On April 21, 2009, the parties filed their pretrial statement, which contains undisputed facts. (Id. at 8-12). This Court adopts the parties' statement of the undisputed facts and expounds upon the facts from its independent review of the record.

A. The Underlying Litigation

In the underlying state court case, the plaintiff was the Estate of Linda O'Dell. (Doc. # 1-5). Linda O'Dell died under the care of Butler as well as other doctors and nurses. (Id.) The operative complaint governing the O'Dell litigation was the Fifth Amended Complaint. (Id.) The named defendants in the O'Dell litigation included Butler, Dr. Pagan, Edward White Hospital, Greenbrook Nursing Home, Palm Rehab Services, L.L.C., Grand Management Group, L.L.C., and others. (Id.)

In general, the Fifth Amended Complaint alleged that Butler instructed Dr. Pagan to install a valve on O'Dell's tracheotomy tube to allow O'Dell to swallow food, among other things. (Id.) Complications arose, and O'Dell died. (Id.) This Court draws from the following factual allegations as stated in the Fifth Amended Complaint, filed in the O'Dell litigation, to describe the nature of O'Dell's condition and Butler's role in her demise:

Defendant Dorothy Butler was a speech pathologist who was working as an agent, employee, servant, and/or contractor or consultant at multiple hospitals and nursing home facilities throughout Pinellas County, Florida.... On April 26, 2001, Linda O'Dell was admitted to Bayfront Medical Center after suffering bodily injuries when she was struck by a drunk driver in a motor vehicle collision. Ms. O'Dell remained hospitalized for approximately one month, at which time her condition stabilized and her treating physicians recommended placement in a nursing home facility for continued skilled care. On or about May 30, 2001, Linda O'Dell was discharged from the hospital and was accepted for placement at Greenbrook NH. When she was admitted to Greenbrook NH, Linda O'Dell was on antibiotics with a tube feed and had a tracheotomy in place, thus requiring continued respiratory and supportive care. Additionally, Ms. O'Dell was a bed-bound resident who was totally dependent upon the nursing home facility ... for skilled nursing, tracheotomy, respiratory and supportive care. While a resident at Greenbrook NH, Linda O'Dell was under the care of ... Defendant Butler and Defendant Pagan. On July 18, 2001, while working at Greenbrook NH, Defendant Butler recommended a video swallow study to be performed on Linda O'Dell to determine if she could tolerate oral dietary intake. On July 23, 2001, Ms. O'Dell was admitted to the Edward White Hospital where an evaluation was completed by Defendant Butler and a fluoroscopy study was subsequently performed. According to the "Edward White Hospital Department of Speech Language Pathology Videofluoroscopy Swallow Report" completed by [Defendant] Butler, Ms. O'Dell was positive for aspiration of thin liquid barium but not of thick liquid or puree. In her subsequent report Defendant Butler recommended that Linda O'Dell be placed on a regular diet, with thin liquids, and wear a Passy Muir valve for assistance while eating. Defendant Butler did not outline and/or provide any specific instruction or training as to the institution, placement or use of the Passy Muir device or make any recommendations that Ms. O'Dell be monitored for any specific timeframe to determine if she could tolerate the device without experiencing respiratory distress. Further, Defendant Butler did not outline and/or provide any specific instruction or training as to the tracheotomy cuff use, cuff deflation and the application of oxygen when instituting a Passy Muir valve.... Following placement of the Passy Muir valve and institution of said diet, Ms. O'Dell was left unattended in her room by the facility staff. Shortly thereafter, she experienced respiratory distress, suffocated and died on July 24, 2001, at the age of 46.

(Id. at ¶¶ 3-26).

Thus, the O'Dell Estate accused Butler of negligence in her professional capacity while performing services at both Greenbrook Nursing Home and Edward White Hospital.

Butler, through counsel, requested that HCI contribute to her defense and indemnification. (Doc. # 105-27). HCI admits that it ignored Butler's requests for insurance coverage. (Doc. # 105-21). Prior to the trial of the case, several of the defendants settled with the O'Dell Estate. Notably, in June 2005, the O'Dell Estate, Edward White Hospital, and HCI entered into a settlement agreement where HCI paid $75,000 to release Edward White Hospital. (Doc. # 62-2). Edward White Hospital was dismissed from the underlying suit with prejudice on July 29, 2005. (Doc. # 105-21). In the first paragraph of the release, it appears that both Edward White Hospital and Butler were released by the O'Dell Estate:

In and for consideration of the payment to the Plaintiff, Vinita Register, as Personal Representative of the Estate of Linda O'Dell, Deceased, (Releasor) by and on behalf of the Defendant, Edward White Hospital, Inc. and Health Care Indemnity, Inc. (Releasees) of the sum of Seventy-Five thousand Dollars and 00/100 ($75,000), ... the Releasor hereby ... discharges the Edward White Hospital and its insurer from liability for the actions of their agents, employees, and servants, including Defendant Dorothy Butler, on July 23, 2001, while Linda O'Dell was a patent [sic] at its hospital facility undergoing a video swallow study from 1:31 p.m. to 2:51 p.m. only.

(Doc. # 62-2 at 1).

However, in the second paragraph of the release, the O'Dell Estate specifically retains a cause of action against Butler for her actions prior to and after her activities at Edward White Hospital:

By executing this settlement, agreement, the parties do not intend to release any other persons, firms, corporations or any other named Defendant, including Defendant Dorothy Butler or her personal insurance carrier, from any and all causes of action in any way relate[d] to the allegations set forth in Plaintiff's complaint, and there has been no consideration paid by the Releasees or ... the remaining Defendants, including Defendant Dorothy Butler and/or her personal insurance carrier to the Releasor to release any other persons, firms, or corporations or the remaining Defendant for acts of negligence occurring prior to or subsequent to her hospitalization at Edward White Hospital on July 23, 2001 from 1:31 p.m. to 2:51 p.m.

(Doc. # 62-2).

On January 17, 2006, at the close of the O'Dell Estate's case, and prior to closing arguments, counsel for Butler moved for a directed verdict in favor of Butler on the basis that the O'Dell Estate released Butler from liability. (Doc. # 56-13 at 12). The trial court, Hon. Amy Williams, denied the motion, holding that the release only released Edward White Hospital. (Id.) Notwithstanding the trial court's ruling, HCI continues to advance the theory that the release covered Butler's negligence at Edward White Hospital. ACC, on the other hand, contends that the release applied only to Edward White Hospital and that the O'Dell Estate retained its right to sue Butler for her actions at Edward White Hospital and elsewhere. Accordingly, there is a dispute between the parties as to whether the release applied to Butler in her capacity as employee of Edward White Hospital.²

On January 24, 2006, the jury in the O'Dell litigation rendered its verdict in favor of the O'Dell Estate in the amount of $2,577,980. (Doc. # 1 at ¶ 35). However, immediately prior to the return of the jury's verdict, Butler and the O'Dell Estate entered into a "high-low agreement" and the agreement capped Butler's liability at $1,000,000. (Doc. # 1 at ¶ 31-35, Doc. # 103-7).

As to Butler's...