Northern v. Physicians Defense Ass'n, 24704.

• Decision Date: 16 September 2002
• Docket Number: No. 24706.,No. 24704.,24704.,24706.
• Citation: Northern v. Physicians Defense Ass'n, 88 S.W.3d 130 (Mo. App. 2002)
• Parties: Dr. Allen E. NORTHERN, D.O., Rolla Medical Group and Women's Clinic, Inc., Plaintiffs, and Jerry Jacob McClain, by and through his mother and next friend, Lori Rutledge, Plaintiff-Respondent, v. PHYSICIANS DEFENSE ASSOCIATION and Continental Casualty Company, Defendants-Appellants.
• Court: Missouri Court of Appeals

88 S.W.3d 130

Dr. Allen E. NORTHERN, D.O., Rolla Medical Group and Women's Clinic, Inc., Plaintiffs, and Jerry Jacob McClain, by and through his mother and next friend, Lori Rutledge, Plaintiff-Respondent, v.PHYSICIANS DEFENSE ASSOCIATION and Continental Casualty Company, Defendants-Appellants.

No. 24704.

No. 24706.

Missouri Court of Appeals, Southern District, Division Two.

September 16, 2002.

Petition for Rehearing and Transfer Denied October 7, 2002.

Application for Transfer Denied November 26, 2002.

Jonathan L. Downard, Union, MO, for AppellantPhysicians Defense Association.

Christopher P. Rackers, Hendren & Andrae, L.L.C., Jefferson City, MO, Sean M. Hanifin, Ross, Dixon & Bell, L.L.P., Washington, D.C., for AppellantContinental Casualty Co.

Matthew J. Padberg and Mark A. Keersemaker, Jr., The Padberg Law Firm, St. Louis, MO, for Plaintiff-Respondent.

JAMES K. PREWITT, Presiding Judge.

This consolidated appeal follows the grant of summary judgment against Physicians Defense Association("PDA") and Continental Casualty Company("Continental") finding both provided professional liability coverage for Dr. Allen Northern ("Northern") and Rolla Medical Group and Women's Clinic, Inc.("the Clinic") for a claim made by Jerry Jacob McClain("McClain"), by and through his mother and next friend, Linda Rutledge, against Northern and the Clinic.In their points relied on, PDA and Continental each argue that the claim made on behalf of McClain was excluded from coverage under its claims made policies that provided professional liability insurance to Northern and the Clinic.With respect to Continental, we agree.

On May 2, 1995, McClain was born with brain damage and suffered other birth complications.Northern and the Clinic purchased a claims made professional liability insurance policy from PDA, which provided coverage for claims made during the policy period of January 1, 1997 through December 31, 1997, with a retroactive date of January 1, 1995 to cover medical occurrences that happened subsequent to that date.On January 2, 1997, a medical malpractice action was filed on behalf of McClain against Northern and the Clinic.The lawsuit was reported to PDA, which then proceeded to defend Northern and the Clinic.

In May 1997, Northern completed an application for insurance coverage through Continental on which he referred to the May 1995 incident and January 1997 filing as an open claim that involved PDA, his then current liability insurer.In June 1997, Northern and the Clinic changed insurance carriers, canceling their coverage under the PDA policy and switching to coverage under a claims made professional liability insurance policy provided by Continental.June 1, 1997 was the effective date for both the cancellation of the PDA policy and initiation of the Continental policy.The latter was renewed through June 1, 2000, with a retroactive, or prior acts, date subsequent to the May 1995 incident; therefore, it would provide coverage for incidents that occurred after May 1995, assuming claims were made according to policy provisions.

The cause of action filed on behalf of McClain was dismissed without prejudice for failure to prosecute on or about June 13, 1999.PDA continued to provide a defense for the lawsuit until that time.The claim was railed on August 16, 1999.Continental was notified of the lawsuit on August 17, 1999 on a claim form that indicated that May 2, 1995 was the event date.PDA was notified of the refiling on August 20, 1999, and provided representation of Northern and the Clinic after that time under a reservation of rights.

On July 24, 2000, a judgment was entered against Northern and the Clinic in the amount of $14,425,916.Under the terms of the settlement agreement, McClain agreed to attempt to enforce the judgment only against the insurance carriers.

Subsequent to that judgment, Northern, the Clinic, and McClain filed an amended petition for declaratory judgment and damages against PDA and Continental.Count I of the amended petition included allegations that the claim referenced in the lawsuit filed in August 1999 was covered under the PDA policy, since it was the same cause of action as that filed in January 1997, which was a claim made during PDA's policy period.The amended petition also alleged in count I that the claim referenced in the August 1999 lawsuit was covered under the Continental policy, since the claim was made to Continental during its policy period.

Count II claimed breach of contract against PDA and Continental for their alleged failure to defend Northern and the Clinic and refusal "to perform in accordance with the terms and provisions of the contract[s] of insurance."Count III alleged that both PDA and Continental insured Northern and the Clinic for the actions of negligence that were the basis of the $14 million judgment against Northern and the Clinic, and that neither PDA nor Continental had satisfied the July 2000 judgment.Within count III it was also alleged that PDA and Continental further claimed that they did not insure Northern and the Clinic for the claim referenced in the August 1999 lawsuit and, therefore, refused to indemnify Northern and the Clinic for the judgment.

On March 13, 2001, the trial court denied a motion for summary judgment filed by PDA, determining that the claim was first made to PDA within the effective policy period for an alleged medical incident that occurred within the retroactive period of the policy.The trial court further found that the action filed in August 1999 was not a new or different claim from the one made in January 1997.

On July 2, 2001, McClain filed a motion for summary judgment against PDA.Continental filed a motion for summary judgment on August 2, 2001, and on August 31, 2001, McClain filed a motion for summary judgment against Continental.

On November 20, 2001, the trial court ruled on the above three motions and entered an amended judgment and order.The trial court granted McClain's motions for summary judgment against PDA and Continental, respectively, and denied Continental's motion for summary judgment against McClain.The trial court reiterated its finding that a claim regarding the May 1995 incident was made to PDA within its policy period, and that the lawsuit filed in August 1999 was not a new or different claim.

Judgment was entered against PDA and Continental, and in favor of Northern, the Clinic, and McClain on counts I and III of the amended petition.The trial court designated the judgment as final on those two counts, determining there was "no just reason for delay," but held count II in abeyance until the issues relating to counts I and III were resolved on appeal.The trial court determined that both of the PDA and Continental policies provided coverage for the claim.

The trial court also determined that the limits under Continental's policy for the underlying case against Northern and the Clinic were $1 million for each medical occurrence and $3 million for the annual aggregate for the policy period.The maximum policy limits of the PDA policy were not at issue and were $200,000 and $600,000, respectively.

It is a prerequisite for our review that there be a final judgment.First American Title Ins. Co. v. Birdsong,31 S.W.3d 531, 536(Mo.App.2000).For a judgment to be final and appealable, it usually must dispose of all the issues in the case and leave nothing for final determination.Id.Here, count II was not resolved, but the trial court found no just reason for delay, designated the judgment and order as a final judgment for purposes of appeal, and held count II in abeyance until the issues on appeal relating to counts I and III were resolved.Under such circumstances, we may review and consider the order from which PDA and Continental appeal.Seeid.

"Reviewing summary judgment on appeal is a question of law reviewed de novo on the record."American Family Mut. Ins. Co. v. Crites,973 S.W.2d 137, 138(Mo.App.1998).Our analysis is based primarily on the interpretation of the coverage and provisions of the two claims made insurance policies, and the interpretation of the meaning of an insurance policy is a question of law.Goza v. Hartford Underwriters Ins. Co.,972 S.W.2d 371, 373(Mo.App.1998...