Jones v. Lexington Manor Nursing Center, L.L.C.

• Decision Date: 07 December 2006
• Docket Number: Civil Action No. 3:05CV679TSL-JCS.
• Citation: Jones v. Lexington Manor Nursing Center, L.L.C., 480 F.Supp.2d 865 (S.D. Miss. 2006)
• Parties: Bobbie JONES, Individually and on Behalf of the Estate and Wrongful Death Beneficiaries of Jesse James Parks, Deceased, Plaintiff v. LEXINGTON MANOR NURSING CENTER, L.L.C., Lexington Insurance Company, and John Does 1-20, Defendants.
• Court: U.S. District Court — Southern District of Mississippi

480 F.Supp.2d 865

Bobbie JONES, Individually and on Behalf of the Estate and Wrongful DeathBeneficiaries of Jesse James Parks, Deceased, Plaintiff v.LEXINGTON MANOR NURSING CENTER, L.L.C., Lexington Insurance Company, and John Does 1-20, Defendants.

Civil Action No. 3:05CV679TSL-JCS.

United States District Court, S.D. Mississippi, Jackson Division.

December 7, 2006.

Alex Barlow, Tomblin Carnes & McCormack, L.L.P., Austin, TX, Dion J. Shanley, Hickman, Goza & Spragins, PLLC, Madison, MS, for Plaintiff.

Robert M. Tyner, Jr., Luckett Tyner Law Firm, PA, Clarksdale, MS, Mary Leslie Davis, Attorney, Greenwood, MS, for Defendants.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on cross-motions for summary judgment filed by plaintiffBobbie Jones, individually and on behalf of the estate and wrongful death beneficiaries of Jesse James Parks, deceased, and defendantLexington Insurance Company for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure.Each party has responded to the motion of the other, and the court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes that plaintiffs motion should be granted and defendant's motion should be denied.

This case involves the question whether claims asserted in a lawsuit filed against Lexington Manor Nursing Home are covered under a certain policy of liability insurance issued by Lexington Insurance Company to Lexington Manor.The material facts are undisputed.

Lexington Insurance Company issued a liability policy to Lexington Manor with a policy period of October 30, 2001 to October 30, 2002.The policy is a "claims made" policy, which states, in pertinent part, as follows:

HEALTHCARE PROFESSIONAL LIABILITY CLAIMS MADE COVERAGE PART FOR LONG TERM CARE FACILITIES

. . .

This coverage part provides claims made coverage only.Coverage is limited to liability for claims first made against an Insured during the policy period or any extended reporting period, if applicable ....

Section 1, INSURING AGREEMENT, states:

We will pay those amounts ... as damages resulting from a medical incident arising out of professional services provided by any insured.The medical incident must take place on or after the retroactive date and before the end of the policy period.A claim for a medical incident must be first made against an insured during the policy period or the extended reporting period, if applicable.

VI.CONDITIONS

In addition to the GENERAL POLICY PROVISIONS AND CONDITIONS — Section III.CONDITIONS APPLICABLE TO ALL COVERAGE PARTS, the following Conditions apply to this Coverage Part:

A.Duties in the Event Of A Claim, Suit, or Medical Incident

1.If during the policy period, the First Named Insured shall become aware of any medical incident which may reasonably be expected to give rise to a claim being made against any Insured, the First Named Insured must notify us in writing as soon as practicable.To the extent possible, notice should include:

a. How, when, and where the medical incident took place;

b. The names and addresses of any injured persons and witnesses; and

c. The nature and location of any injury or damage arising out of the medical incident.

Any claim arising out of such medical incident which is subsequently made against any Insured and reported to us, shall be considered first made at the time such notice was given to us.

. . .

D.Automatic Extended Reporting Period

1.If this Coverage Part is canceled or not renewed for any reason other than nonpayment of premium, and if the Optional Extended Reporting Period is not purchased, then we will provide an automatic extended reporting period of sixty (60) days, starting with the end of the policy period, during which claims arising out of medical incidents which take place on or after the retroactive date but before the end of the policy period may be first made.

2.The automatic extended reporting period does not extend the policy period or change the scope of coverage provided.We will consider any claim first made during the automatic extended reporting period to have been made on the last day of the policy period.

On December 27, 2002, two days prior to expiration of the extended reporting period, plaintiff filed suit against Lexington Manor in Circuit Court of Holmes County, Mississippi, for the alleged wrongful death of Jesse James Parks.Plaintiff alleged that while a resident of Lexington Manor, Parks had developed decubitus ulcers, became dehydrated and was hospitalized, following which he died on September 1, 2002 due to complications from severe dehydration.

Lexington Manor was served with the complaint and summons on April 17, 2003, following which it notified Lexington Insurance of the suit on May 9, 2003.Upon receiving notice of the suit, Lexington Insurance promptly informed Lexington Manor that coverage was denied because the claim was made after expiration of the policy and extended reporting period.Lexington Manor assigned to plaintiff its potential cause of action against Lexington Insurance for denial of coverage in the underlying action, following which plaintiff filed a second amended complaint on September 15, 2005 adding Lexington Insurance as a defendant, and seeking a declaratory judgment that Lexington Insurance wrongly denied coverage and had a duty to defend and indemnify in connection with the underlying action.The case was removed to this court, where the parties filed their present cross-motions for summary judgment.

In her motion, plaintiff maintains that she is entitled to summary judgment because her suit constituted a "claim[] first made against an insured during the policy period or any extended reporting period."Defendant, on the other hand, argues that there was no claim made during the policy period or extended reporting period because no notice of plaintiffs claim was given to the insurer during the policy period or extended reporting period, and that there is consequently no coverage for plaintiffs claim.¹In the court's opinion, defendant's position is not supported by the policy.

The policy at issue describes itself as a "claims made" policy.According to defendant, in the insurance vernacular, this refers to a policy which covers claims against an insured which are reported to the insurer during the policy period.SeeCulver v. Continental Ins. Co.,11 Fed. Appx. 42, 44, 1999 WL 503527, *1(4th Cir.1999).However, the only true mark of a "claims made" is that it provides coverage for any claim first asserted against the insured during the policy period, regardless of when the incident giving rise to the claim occurred.Whether reporting to the insurer as also a condition of coverage depends on the terms of the specific policy.

In this regard, there is a distinction between a "claims made" policy and a "claims made and reported" policy: "Whereas the former requires only that a claim be made within the policy period, the latter also requires that the claim be reported to the insurance company within the policy period."Chicago Ins. Co. v. Western World Ins. Co.,1998 WL 51363, *3(N.D.Tex.1998).See alsoPension Trust Fund for Operating...