SavaSeniorCare, LLC v. Starr Indem. & Liab. Co., Civil Action 1:18-cv-01991-SDG

CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
Writing for the CourtSteven D. Grimberg, United States District Court Judge.
PartiesSAVASENIORCARE, LLC, Plaintiff/ Counterclaim Defendant, v. STARR INDEMNITY AND LIABILITY COMPANY and ASPEN AMERICAN INSURANCE COMPANY, Defendants/Counterclaim Plaintiffs.
Docket NumberCivil Action 1:18-cv-01991-SDG
Decision Date27 September 2021

SAVASENIORCARE, LLC, Plaintiff/ Counterclaim Defendant,


Civil Action No. 1:18-cv-01991-SDG

United States District Court, N.D. Georgia, Atlanta Division

September 27, 2021


Steven D. Grimberg, United States District Court Judge.

This matter is before the Court on the following:

• Defendant/Counterclaim Plaintiff Starr Indemnity and Liability Company's motion for summary judgment [ECF 207]
• Plaintiff/Counterclaim Defendant SavaSeniorCare LLC's motion for partial summary judgment [ECF 243]
• Starr's motion for leave to file a First Amended Counterclaim [ECF 318]
• Defendant/Counterclaim Plaintiff Aspen American Insurance Company's motion for leave to file a First Amended Counterclaim [ECF 326];
• Aspen's motion for summary judgment [ECF 332];
• Sava's motion for sanctions against Starr [ECF 347];
• Starr's motion to continue adjudication of its motion for summary judgment and Sava's motion for partial summary judgment [ECF 369];


• Starr's motion for the Court to disregard Sava's opposition to Starr's motion to continue [ECF 377];
• Starr's "first notice" of supplemental persuasive authority [ECF 390];
• Sava's motion to disregard the notice and in further support of its motion for sanctions [ECF 392]; and,
• various motions to seal or redact [ECF 360; ECF 363; ECF 374; ECF 383; ECF 385; ECF 388; ECF 391].

Having reviewed the record, and with the benefit of argument, the Court rules as follows:[1]


A. The Starr Policy

In January 2013, Starr issued Policy No. SISIFNL20060613 to Sava (the Starr Policy).[2] Pursuant to a Mid-Term Run-Off Endorsement, the policy provided coverage for any Claim made during the Discovery Period (October 11,


2013 through October 11, 2019) for any Wrongful Act allegedly committed prior to October 11, 2013.[3] The policy has an aggregate limit of liability of $15 million.[4]

1. Definitions and Exclusions

The Starr Policy contained a provision entitled the Directors & Officers Liability Coverage Section.[5] It defined a Claim to mean (among other things) any:

(1) written demand for monetary, non-monetary or injunctive relief made against any Insured, including, but not limited to, any demand for mediation, arbitration or any other alternative dispute resolution process;
(2) judicial, administrative or regulatory proceeding, whether civil or criminal, for monetary, nonmonetary or injunctive relief commenced against an Insured, including any appeal therefrom, which is commenced by:
(i) service of a complaint or similar pleading . . .
(3) formal civil, criminal, administrative or regulatory investigation of an Insured Person, which is commenced by the filing or issuance of a notice of charges, formal investigative order or similar document... .[6]


The Starr Policy also defined a Wrongful Act to mean "with respect to the Company, any actual or alleged breach of duty, neglect, error, misstatement, misleading statement, omission or act by the Company/'[7]

i. Government Funding Sublimit

Endorsement 50 amended the Directors & Officers Liability Coverage Section as follows:

b.) Government Funding - Defense Costs Coverage
1. Loss shall not include the return of any funds received from any federal, state or local governmental agency and any interest, fines or penalties arising out of the return of such funds. However, solely in the event of a Claim(s) for Wrongful Acts arising out of the return, or request to return such funds, this policy shall pay Defense Costs up to an amount not to exceed $1, 000, 000 ("Government Funding Sublimit of Liability"). The Government Funding Sublimit of Liability shall be part of, and not in addition to, the Limit of Liability applicable to the Directors & Officers and Employment Practices Liability Coverage Section as set forth in Item 4 of the Declarations.[8]

This section is the Government Funding Sublimit.


ii. Conditions

Endorsement 8 amended the General Terms & Conditions Liability Coverage Section of the Starr Policy.[9] It contained three conditions relevant here. First, it stated that" [t]he Insurer does not assume any duty to defend any Claim under this policy. However, the Insurer shall have the right to fully and effectively associate with the Insured in the control, investigation, defense and settlement of any Claim."[10] This is the association condition.

Second, Endorsement 8 provided that:

The Insured(s) shall defend and contest any Claim made against them. The Insured shall obtain the Insurer's written consent in the selection of defense counsel to represent the Insured as respects any Claim, such consent shall not be unreasonably withheld.
The Insured(s) shall not admit or assume any liability, incur any Defense Costs, enter into any settlement agreement or stipulate to any judgment without the prior written consent of the Insurer. Any Loss incurred by the Insured(s) and/ or any settlements or judgments agreed to by the Insured(s) without such consent shall not be covered by this policy.[11]

This is the consent condition.


Finally, Endorsement 8 read that:

Each and every Insured shall give the Insurer full cooperation and such information as it may reasonably require relating to the defense and settlement of any Claim and the prosecution of any counterclaim, cross-claim or third-party claim, including without limitation the assertion of an Insured's indemnification or contribution rights.[12]

This is the cooperation condition. According to a "no action" clause, "[n]o action may be taken against [Starr] unless, as a condition precedent thereto, there shall have been full compliance with all material terms of this policy."[13]

B. The Aspen Excess Policy

Sava purchased an additional $10 million in excess insurance from Aspen, Policy Number MCA9J6V13 (the Aspen Policy), effective for the period from January 31, 2013 to January 31, 2014.[14] This policy generally follows form to the Starr Policy, meaning it provides "insurance excess of the Underlying Limits in accordance with the same terms, conditions, definitions, exclusions and limitations of the [Starr Policy] as they existed on the inception date of this


Policy."[15] According to its express terms, the Aspen Policy only provided excess insurance and would not:

[D]rop down for any reason including, but not limited to: (1) non-payment to any extent of the Underlying Limits; (2) the existence of a sub-limit of liability in any Underlying Policies (unless specifically endorsed hereon); or (3) any Underlying Policies containing terms and conditions different from the Followed Policy.[16]

C. The FCA Actions

Between August 26, 2011 and November 20, 2013, three sealed qui tarn lawsuits alleging violations of the False Claims Act (the FCA) were filed against Sava by former employees (the FCA Actions).[17] On June 26, 2012, the United States issued a subpoena to Sava.[18] After a series of communications, representatives of Sava met with the Department of Justice (the DOJ) on September 25, 2014.[19] During this meeting, the DOJ gave a presentation to Sava demonstrating the government's claimed total loss due to Sava's alleged FCA violations.[20] On December 9, Sava gave


its own presentation to the DOJ.[21] During the following months, Sava and the DOJ engaged in discussions about mediating and settling the FCA Actions.[22]

On July 21, 2015, the United States filed a notice to intervene in the FCA Actions.[23] Sava notified the Insurers about the cases on October 20, 2015.[24] The following day, the FCA Actions were consolidated and the DOJ filed a consolidated complaint against Sava in the Middle District of Tennessee.[25]

D. Starr's Coverage Position

On January 19, 2016, Starr sent Sava its initial coverage letter, agreeing to provide defense costs to Sava up to $1 million, but denying any other coverage based on the Government Funding Sublimit.[26] In March 2016 and June 2017, Starr sent letters affirming its coverage position.[27] Sava ultimately initiated this action for coverage on May 7, 2018.[28]



A. Motions for Summary Judgment

Each party has moved for summary judgment. Although the facts overlap and legal issues are intertwined, the Court addresses each motion separately.

1. Legal Standard

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The Court must "view the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmoving party." Tesoriero v. Carnival Corp., 965 F.3d 1170, 1177 (11th Cir. 2020) (quoting Hornsby-Culpepper v. Ware, 906 F.3d 1302, 1311 (11th Cir. 2018)). If the non-movant relies on evidence that is "'merely colorable' or 'not significantly probative,' then summary judgment is appropriate." Deal v. Tugalo Gas Co., Inc., 991 F.3d 1313, 1325 (11th Cir. 2021) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (cleaned up)). However, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions." Strickland v. Norfolk S. Ry. Co., 692 F.3d 1151, 1154 (11th Cir. 2012) (quoting Anderson, 477 U.S. at 255). Put another way, to defeat summary judgment, the nonmovant "need only present evidence from which a jury might


return a verdict in [its] favor." Samples ex rel. Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988) (quoting Anderson, 477 U.S. at 257) (cleaned up).

2. Sava's Motion for Partial Summary Judgment

On February 22, 2021,...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT