Medical Protective Co. v. Schrein
| Citation | 255 Neb. 24,582 N.W.2d 286 |
| Decision Date | 17 July 1998 |
| Docket Number | No. S-95-687,S-95-687 |
| Parties | The MEDICAL PROTECTIVE COMPANY, Appellee, v. Daniel D. SCHREIN, Appellee, and Rochelle B. et al., Appellants. |
| Court | Supreme Court of Nebraska |
Syllabus by the Court
1. Judgments: Appeal and Error. When reviewing a question of law, an appellate court has an obligation to reach its conclusion independent of the determination of the court below.
2. Declaratory Judgments. The function of a declaratory judgment is to determine justiciable controversies which either are not ripe for adjudication by conventional forms of remedy or, for other reasons, are not conveniently amenable to the usual remedies.
3. Declaratory Judgments. A declaratory judgment action cannot be used to determine the legal effects of a set of facts which are future, contingent, or uncertain.
4. Declaratory Judgments. At the time that a declaratory judgment is sought, there must be an actual justiciable issue from which the court can declare law as it applies to a given set of facts.
5. Insurance: Tort-feasors: Liability. As a general rule, there is no privity between an injured person and the tort-feasor's liability insurer.
6. Actions: Insurance: Liability: Negligence. Direct actions against liability insurance carriers based on the negligence of the insured are not permitted in Nebraska.
7. Actions: Insurance: Tort-feasors: Liability. A tort-feasor's liability insurer is not permitted to seek in a direct action a declaration of noncoverage that is binding against an injured person in a later action.
8. Declaratory Judgments. Declaratory judgment does not lie where another equally serviceable remedy is available.
James E. Harris and Timothy K. Kelso, of Harris, Feldman, Stumpf Law Offices, Omaha, for appellants.
Mark A. Christensen and Gregory S. Heier, of Cline, Williams, Wright, Johnson & Oldfather, Lincoln, for appellee Medical Protective Co.
The Medical Protective Company (Medical Protective) brought this declaratory judgment action against former medical doctor Daniel D. Schrein (Schrein) and five of his former patients (the claimants). Medical Protective sought a declaration that under the professional liability policies issued to Schrein, there was no duty to defend or to indemnify Schrein with respect to the claimants. Both Medical Protective and the claimants moved for summary judgment. The district court granted Medical Protective's motion for summary judgment and denied the claimants' motion, finding that Schrein's conduct did not constitute "professional services" within the meaning of the professional liability policies issued by Medical Protective. The claimants appealed from this determination, and we removed the case to our docket pursuant to our power to regulate the caseloads of the Nebraska Court of Appeals and this court.
Schrein was a medical doctor who practiced as a pediatrician in Omaha at all relevant times. Medical Protective provided Schrein with professional liability coverage during the periods of time at issue. In each of the relevant professional liability policies, the insurer agreed to defend and pay damages for claims "based on professional services rendered or which should have been rendered" by Schrein. Each policy also contained exceptions to coverage for particular conduct. The policies which were in effect from September 7, 1965, through September 10, 1977, excluded coverage for damages resulting from the performance of a "criminal act." The policies which were in effect from November 1, 1986, through November 1, 1990, excluded coverage for damages resulting from the performance of a "criminal act, willful tort or sexual act." However, each policy provided that Medical Protective would defend Schrein even if coverage was precluded under these exclusions.
On August 1, 1990, the State of Nebraska filed a petition for disciplinary action against Schrein based on allegations that Schrein had engaged in improper sexual contact with his minor patients. On January 8, 1991, the Department of Health found that Schrein had committed grossly immoral and dishonorable conduct, in violation of Neb.Rev.Stat. § 71-147(2) (Reissue 1990), and unprofessional conduct, in violation of § 71-147(10), and revoked Schrein's license to practice medicine. In addition, on May 15, Schrein was convicted in the district court for Douglas County of five felony counts of sexual assault of a child. The conviction was affirmed. State v. Schrein, 244 Neb. 136, 504 N.W.2d 827 (1993).
The underlying facts related to each of the claimants in the instant case are, briefly, as follows:
Claimant No. 1 (male): Claimant No. 1 saw Schrein from 1986 through 1990. In 1989, claimant No. 1 saw Schrein for a junior-high physical. He reported that Schrein made him sit on the doctor's lap in the nude while Schrein rubbed his legs and his testicles.
Claimant No. 2 (female): Claimant No. 2 saw Schrein from 1986 until June 1990. Claimant No. 2 reported that Schrein digitally penetrated her vagina during examinations, watched her dress and undress, and made her "turn around" in front of him when she was nude.
Claimant No. 3 (male): Claimant No. 3 saw Schrein from 1972 through 1990. In January 1987, claimant No. 3 developed an antibiotic-induced scrotal infection which Schrein called excoriation of the scrotum. Schrein was also treating claimant No. 3 for recurring meatitis (an inflammation of the meatus, the tip of the urethra). During this Claimant No. 4 (female): Claimant No. 4 saw Schrein from 1979 through 1990. In July 1989, claimant No. 4 saw Schrein for a school physical, including her first pelvic exam. Claimant No. 4 reported that Schrein fondled her breasts, inserted fingers into her vagina, and manipulated her vulva area. Before claimant No. 4 dressed, Schrein had her sit on his lap and tickled her thighs. Schrein asked her whether she had any boyfriends and whether she was sexually active.
examination, Schrein applied ointment to claimant No. 3's penis and twice manipulated his penis to the point of ejaculation. Schrein then invited claimant No. 3 to his home that evening to play video games at which time they would take another sperm sample.
Claimant No. 5 (female): Claimant No. 5 saw Schrein from 1969 to 1975. Claimant No. 5 claims that Schrein repeatedly would have her sit on his lap nude while he stroked her body and discussed sexual behavior. Schrein performed an inordinate number of pelvic examinations for a girl of her age, digitally penetrating her vagina or using foreign objects such as a glass test tube and a penlight.
Schrein claims that the treatments given to the claimants were legitimately required medical services. However, Drs. Harlan C. Shriner and Douglas Ebers each testified that in his opinion, Schrein's conduct was unprofessional and bore no relation to the medical treatment of the claimants.
Claimant No. 5 filed a lawsuit against Schrein in the district court for Douglas County on August 8, 1991. Schrein requested that Medical Protective defend and indemnify him in this lawsuit. The other claimants have each made claims against Schrein. Schrein has requested that Medical Protective defend and indemnify him in connection with each of these claims.
Medical Protective filed a declaratory judgment action against Schrein and each of the above claimants. Medical Protective asked the district court to determine whether it had a duty to defend or indemnify Schrein against these claims under the terms of the policies. Both Medical Protective and the claimants filed motions for summary judgment.
The district court granted Medical Protective's motion for summary judgment and overruled the claimants' motion. The district court found that because Schrein admitted to the conduct alleged in the claims, there was no material issue of fact, and that the characterization of Schrein's conduct was a matter of law. The district court concluded that Schrein's conduct was not within the scope of professional services as intended by the insurance policy. The claimants appealed from this ruling. Schrein did not cross-appeal.
The dispositive issue in this appeal presents a question of law, in connection with which an appellate court has an obligation to reach its conclusion independent of the determination made by the court below. See Schram Enters. v. L & H Properties, 254 Neb. 717, 578 N.W.2d 865 (1998).
Summarized and restated, the assertions of the claimants are that the district court erred in (1) entering a declaratory judgment in this action, (2) determining that Schrein's professional liability policies did not cover the alleged misconduct, (3) failing to find that Medical Protective was collaterally estopped from asserting its interpretation of the policy, (4) refusing to admit Schrein's medical records, and (5) refusing to admit the affidavit of the claimants' expert.
The claimants contend that the district court erred in failing to determine that it lacked subject matter jurisdiction to enter a declaratory judgment against them in the instant cause.
Neb.Rev.Stat. § 25-21,149 (Reissue 1995) provides that the courts
shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The In addition, Neb.Rev.Stat. § 25-21,151 (Reissue 1995) permits a contract to be construed either before or after there has been a breach thereof.
declaration may be either affirmative or negative in form and effect, and such declarations shall have the force and effect of a final judgment or decree.
Our initial task is to determine whether a declaratory judgment action may or should be used as a means by which a tort-feasor's liability...
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