Daniels-Recio v. Hospital Del Maestro, Inc.

• Decision Date: 04 November 1996
• Docket Number: DANIELS-RECI,P,96-1686,Nos. 96-1429,s. 96-1429
• Citation: 109 F.3d 88
• Parties: Linda M.laintiff--Appellee, v. HOSPITAL DEL MAESTRO, INC., et al., Defendants--Appellants. Linda M.laintiff--Appellant, v. HOSPITAL DEL MAESTRO, INC., et al., Defendants--Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 88

109 F.3d 88

Linda M. DANIELS-RECIO, Plaintiff--Appellee, v. HOSPITAL DEL MAESTRO, INC., et al., Defendants--Appellants.

Linda M. DANIELS-RECIO, Plaintiff--Appellant, v. HOSPITAL DEL MAESTRO, INC., et al., Defendants--Appellees.

Nos. 96-1429, 96-1686.

United States Court of Appeals First Circuit.

Heard Nov. 4, 1996.

Decided March 28, 1997.

Mario Pabn-Rosario, Hato Rey, PR, with whom Jose Luis Gonzalez- Castaner, San Juan, PR, and Law Offices of Jose Luis Gonzalez-Castaner were on brief for appellant SIMED.

Kevin G. Little, Fresno, CA, with whom Law Offices of David Efrn was on brief, for Linda Daniels-Recio.

Edgardo A. Vega-Lpez, Bayamon, PR, with whom Jimenez, Graffam & Lausell was on brief, for Asociacin Hospital del Maestro and Evanston Insurance Company.

Before TORRUELLA, Chief Judge, COFFIN and CAMPBELL, Senior Circuit Judges.

TORRUELLA, Chief Judge.

On June 24, 1992, Linda Daniels Recio ("Daniels") filed a medical malpractice suit against Dr. Rafael Sanchez-Monserrat ("Sanchez") and Asociacin Hospital del Maestro ("AHDM"), a hospital in San Juan, Puerto Rico. On November 2, 1992, Daniels amended her complaint to add Dr. Sanchez' insurer, Sindicato de Aseguradores Para la Suscripcin Conjunta de Seguros de Responsibilidad Profesional Medico Hospitalaria ("SIMED"), and AHDM's insurer, Evanston Insurance Company ("Evanston"), as defendants. On January 17, 1995, AHDM and Evanston filed a motion for summary judgment. On March 30, 1995, the district court granted AHDM and Evanston's motion for summary judgment.

In the meantime, on February 3, 1995, Daniels filed a motion in limine seeking determination of coverage under Dr. Sanchez' insurance policy with SIMED. On February 28, 1996, the district court determined that Daniels' claim was covered by Dr. Sanchez' policy, which had a stated limit of $500,000. The case was scheduled for trial. On March 15, 1996, following a settlement conference, Daniels, Dr. Sanchez and SIMED entered into a Stipulation Agreement whereby they agreed that the district court would enter final judgment for Daniels in the amount of $500,000 in order for SIMED to appeal the district court's determination of policy coverage.

We have before us SIMED's appeal from the final judgment, based on the district court's allegedly erroneous determination regarding policy coverage, as well as Daniels' appeal from the district court's entry of summary judgment in favor of AHDM and Evanston. We affirm.

BACKGROUND

As our review of the district court's grant of summary judgment is de novo, we present the background facts in the light most favorable to the nonmovant, drawing all reasonable inferences in her favor. Dubois v. United States Dep't of Agriculture, 102 F.3d 1273, 1283-84 (1st Cir.1996).

In May 1989, after being admitted to AHDM's emergency room, Daniels was referred by AHDM staff to Dr. Regis-Bonilla, a pneumologist at Clnica Las Americas. Daniels received treatment from Dr. Regis-Bonilla for approximately nine months, before he moved his practice to another city. After Dr. Regis-Bonilla left his San Juan practice, Dr. Sanchez joined Clnica Las Americas and began treating Daniels. In early 1990, Dr. Sanchez diagnosed Daniels' condition as "silent asthma."

On August 31, 1990, Daniels was again admitted to AHDM on an emergency basis. She was hospitalized until September 17, 1990. During this hospitalization, Dr. Sanchez prescribed Medrol, an adrenocortical steroid, for the first time. Extended use of this medication can cause a number of adverse reactions, including hypertension, muscle weakness, steroid myopathy, osteoporosis, spinal compression fractures, abdominal distention, development of a Cushingoid state, ¹ and manifestations of latent diabetes mellitus.

Daniels was again admitted to AHDM on an emergency basis on October 5, 1990. After a consultation, Dr. Sanchez took over as Daniels' primary attending physician. Hospital records showed that Daniels had been taking Medrol since her August 31 admission and that she had steroid myopathy as a complication of the steroid treatment. Daniels was discharged on November 1, 1990.

On December 17, 1990, Daniels yet again was admitted to AHDM. Daniels had been taking Medrol since her last hospitalization and continued to take it throughout this stay. Steroid complications, specifically steroid-induced diabetes, were noted in her records. Daniels was discharged on December 31, 1990, with records showing that her "asthma" continued to be active and that she was taking Medrol upon her discharge.

On May 30, 1991, Daniels was admitted to AHDM for a fifth time. She was still taking During each hospitalization, a series of respiratory function tests were run on Daniels. None of these tests indicated that she was having respiratory difficulty.

Medrol at the time of her admission and was continued on the medication during the course of her hospitalization. Several steroid related complications, including Cushing's syndrome, osteoporosis, spinal compression fractures, hypertension, and a decrease in height, were noted at the time of her admission. She was discharged on June 28, 1991.

Upon her last discharge, on June 28, 1991, Daniels was referred by Dr. Sanchez to the National Jewish Center for Immunology and Respiratory Medicine ("National Jewish Center") in Denver, Colorado. Dr. Sanchez' referral letter indicates that Daniels had been prescribed Medrol for the previous twelve months and that she was suffering from complications related to extended corticosteroid usage. On August 26, 1991, Daniels had her first appointment at National Jewish Center. At the time of this first visit, the staff at National Jewish Center questioned both Dr. Sanchez' diagnosis of "silent asthma" and his treatment with Medrol for at least a year. The staff at National Jewish Center tapered Daniels' Medrol dosage and gave her a final dose on September 3, 1991, the day she was admitted to National Jewish Center. Doctors there discovered that her osteoporosis had developed to such an extent that her bone mass was approximately 70% of the normal level. The National Jewish Center staff diagnosed Daniels as suffering from breathing difficulties secondary to an anxiety disorder. Daniels was discharged from National Jewish Center on September 21, 1991.

Daniels' experts indicated that the diagnosis of "silent asthma" was, at least ultimately, incorrect based on the objective respiratory test results. They further stated that a course of Medrol treatment extending beyond two weeks would certainly result in the severe complications experienced by Daniels.

DISCUSSION

In this diversity case, we apply Puerto Rico substantive law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 92, 58 S.Ct. 817, 828, 82 L.Ed. 1188 (1938); Carota v. Johns Manville Corp., 893 F.2d 448, 450 (1st Cir.1990).

I. Policy Coverage

SIMED issued to Dr. Sanchez a "claims made" medical malpractice insurance policy effective from July 7, 1991, to July 7, 1992. This policy limited liability to $500,000 per "medical incident" that occurred during the period of coverage, up to an aggregate of $1,000,000. The policy also had a retroactive component, which provided coverage to Dr. Sanchez from July 2, 1986 to July 7, 1991. The retroactive portion of the policy provided coverage of $100,000 per "medical incident" that occurred during the retroactive period of coverage, up to an aggregate of $300,000. The question presented below and on appeal is when Daniels' "medical incident" occurred, which would determine which policy, and coverage limit, applied.

SIMED claims the district court erred by determining that Daniels' "medical incident" spanned the coverage period of both policies ² and, thus, that Daniels' claim is covered by the subsequent policy, whose liability limit is The policy language, including the language of the amendment, as set out in the margin, ties policy coverage to the timing of medical incidents. ³ The district court properly framed the issue as follows:

$500,000. We find no error in the district court's determination.

if the incident transcended the period of the lower policy coverage, that is, if Dr. SNCHEZ MONSERRAT'S rendering of, or failure to render professional services extended beyond the July 7, 1991 date, then the higher coverage would apply because all his acts or omissions, when taken together, comprise one medical incident pursuant to the policy definitions.

Amended Order Granting Plaintiff's Motion in Limine and Setting Trial and Pretrial Settlement Conference, Feb. 28, 1996, at 2-3.

Title 26, section 1114, of the Puerto Rico Civil Code governs the contents of insurance policies. In accordance with this provision, language in an insurance policy is to be construed according to the "most common and usual meaning, ... paying ... attention ... to the general use and popular meaning of the idioms." Morales Garay v. Roldan Coss, 110 P.R.R. 909, 916 (1981). ⁴ Moreover, "insurance contracts, being contracts of adhesion, are to be liberally construed in favor of the insured." Rivera v. Insurance Co. of Puerto Rico, 103 P.R.R. 128, 131 (1974); see also P.R. Laws Ann. tit. 26, § 1114(2) (Supp.1996) ("In the interpretation of said policies, the text that is of most benefit to the insured shall prevail.").

The district court relied on the following facts in reaching its determination that the medical incident spanned both policies and, therefore, triggered coverage of the subsequent policy:

1. Insurance Company Progressive Report

In the Progressive Report submitted to the Caribbean American Life Assurance Company, Dr. SNCHEZ MONSERRAT marked the box indicating "YES" to the question posed on the report which asked "Is patient still under your care for this condition?". He further informed that she had received a consultation from his office on August 4, 1991 and that she was at the time in Colorado for "treatment." Significantly, the report is dated September 3, 1991, and is...