The Med. Assurance Co. Inc. v. Miller

• Decision Date: 15 March 2011
• Docket Number: Case No. 4:08–CV–00029 JD.
• Citation: 779 F.Supp.2d 902
• Parties: The MEDICAL ASSURANCE CO., INC., Plaintiff,v.Alexander C. MILLER, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

779 F.Supp.2d 902

The MEDICAL ASSURANCE CO., INC., Plaintiff,

v.Alexander C. MILLER, et al., Defendants.

Case No. 4:08–CV–00029 JD.

United States District Court, N.D. Indiana, Hammond Division.

March 15, 2011.

John David Hoover, Michael A. Dorelli, Patrick J. Olmstead, Jr., Hoover Hull LLP, Indianapolis, IN, for Plaintiff.Barry D. Rooth, Holly S. C. Wojcik, Kelly A. Sheets, Theodoros & Rooth PC, Merrillville, IN, A. Richard M. Blaiklock, Lewis S. Wooton, Richard K. Shoultz, Lewis Wagner LLP, Indianapolis, IN, for Defendants.

MEMORANDUM OPINION AND ORDER

JON E. DeGUILIO, District Judge.

Now before the Court is Plaintiff's Motion for Summary Judgment [DE 47], filed on December 3, 2009. Defendants the Indiana Patients Compensation Fund and the Indiana Department of Insurance responded on August 20, 2010 [DE 67], and Plaintiff replied on September 17, 2010 [DE 68]. Defendants then filed a surreply on October 22, 2010. [DE 72]. For the following reasons, Plaintiff's motion for summary judgment is GRANTED.

I. Background

On December 1, 2003, Mary and Nolan Knight (“the Knights”) filed a proposed complaint for medical malpractice with the Indiana Department of Insurance under the provisions of the Indiana Medical Malpractice Act, against Dr. Alexander C. Miller (“Miller”). [DE 48–1]. Pursuant to the terms of Miller's malpractice insurance policy, Miller's insurer, The Medical Assurance Company, Inc. (“Medical Assurance”), retained the law firm of Eichhorn & Eichhorn to defend Miller in the medical review panel proceedings. [DE 49–15]. The parties agree that Miller participated with counsel throughout the panel review process. [DE 48 at 4; DE 49–3 at 3, 6–9; DE 67 at 5]. The panel rendered its opinions on October 25, 2005. [DE 49–20]. On November 18, 2005, the Knights filed a lawsuit against Miller [DE 49–2]. Five days later, on November 23, 2005, Miller was fired from the Illiana Surgery & Medical Center [DE 49–25; DE 49–26]. Medical Assurance again appointed Eichhorn & Eichhorn to defend Miller in the Knight suit. [DE 49–24].

Miller's malpractice policy includes a cooperation clause, which states, in relevant part,

Each insured shall cooperate with us and, upon our request, assist in making settlements, in the conduct of suits, and in enforcing any right of contribution or indemnity against any person or organization who may be liable to such insured because of injury with respect to which insurance is afforded under the policy, and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses.... If any Insured fails to comply with his obligations under the policy, our obligations to such insured under the policy shall terminate, including any liability or obligation to defend, prosecute or continue any litigation.

[DE 1–2 at 72].

Miller ceased complying with these obligations in 2006. The parties do not dispute that Miller ceased communicating with his defense counsel at some point in the spring of 2006. [DE 48 at 6; DE 67 at 6–9]. During the summer of 2006, Miller moved to live with his parents at their house in Gary, Indiana. [DE 67–4]. Miller did not contact Eichhorn & Eichhorn to update them on his new address. Also during that summer, Miller reported experiencing severe sinus pain that prevented him from sleeping. Id. Miller's sister, Sarita Stevens, noted changes in Miller's behavior during this period, which she attributed to sleep deprivation. Id.

On September 18, 2006, Miller's attorneys mailed a letter to his last known address in Merrillville, Indiana, advising him of the need to resume communicating with his counsel and cooperating in his defense of the Knight suit (as well as other suits pending against him). [DE 49–29]. The same day, Miller left an apparent suicide note to his family, stating, “I'm sorry but the sinus symptoms and nasal obstruction became unbeatable. I have been living with these symptoms since Jan. or Feb. of this year and it has become increasingly difficult to function.” [DE 67–4]. Miller did not act upon the note, but disappeared and was found several days later in a rented car with broken windows in Cook County, Illinois. Id. Miller's family then brought him back to Gary, Indiana. Id. There is no evidence before the Court that Miller was ever examined for, diagnosed with, or treated for any mental illness of any kind.

On October 26, 2006, Medical Assurance hired a trace company to locate Miller and secure his cooperation in the Knight suit. A company agent located Miller at his parents' house, and spoke briefly with Miller by phone. [DE 49–30]. Despite this contact, Miller failed to resume communicating with his attorneys. At some point thereafter, during the fall of 2006, Miller traveled with family members to Memphis, Tennessee for surgery to resolve his sinus problems. [DE 67–4]. The surgery was apparently successful. Id. However, Miller then disappeared again and has not been definitively located since. Id.; [DE 49–31 at 5].

On April 2, 2007, Medical Assurance mailed a letter to Miller at his parents' house, noting Miller's failure to contact his attorneys or otherwise cooperate in his defense and advising him that these failures were in violation of the cooperation clause in his malpractice policy and were resulting in prejudice to Medical Assurance. [DE 49–32]. On August 10, 2007, the Knights filed a motion to compel Miller's deposition in the Knight suit. [DE 49–35]. On August 17, 2007, Medical Assurance sent Miller another letter at his parents' address informing him that his deposition in the Knight case had been scheduled for August 21, and urging him to cooperate in his own defense. [DE 49–36]. On September 28, 2007, the trial court ordered Miller to submit to a deposition within 60 days, and noted that it would consider sanctions if Miller failed to comply. [DE 49–37]. Miller did not appear for this deposition.

In the fall of 2007, Medical Assurance hired a private investigator to locate Miller. The investigator reported that Miller has been living around the area of Tunica, Mississippi, had been renting hotel rooms and cars, and had been living off the savings he amounted while in private practice. [DE 49–31 at 5]. Upon protestations of Miller's family that Miller would harm himself or flee if contacted, the investigator did not hire an additional investigator in Tunica to track Miller down further. [DE 67–5]. In November 2007, Miller's family formally requested that Medical Assurance's investigator cease contacting them regarding Miller's whereabouts. [DE 49–39].

Based on Miller's failure to comply with discovery, the trial court ultimately entered a default judgment for the Knights on January 25, 2008. [DE 49–40]. On June 17, 2008, the trial court ruled that proximate cause was no longer an issue for trial, and that a trial would be held on the issue of damages only. [DE 49–41].

II. Discussion

A. Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56(c), summary judgment is appropriate “if 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). “In other words, the record must reveal that no reasonable jury could find for the non-moving party.” Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir.1994) (citations and quotation marks omitted).

The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying” the evidence which “demonstrate[s] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “Substantive law determines which facts are material; that is, which facts might affect the outcome of the suit under the governing law.” Brown v. City of Lafayette, No. 4:08–CV–69, 2010 WL 1570805, at *2 (N.D.Ind. Apr. 16, 2010) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

Once the moving party has met this burden, the nonmoving party may not rely merely on allegations or denials in its own pleading; rather, its response must set out specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(c)(1); Beard v. Whitley Cnty. REMC, 840 F.2d 405, 410 (7th Cir.1988). To establish a genuine issue of fact, the nonmoving party must come forward with specific facts showing that there is a genuine issue necessitating trial, not “simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); First Nat'l Bank of Cicero v. Lewco Secs. Corp., 860 F.2d 1407, 1411 (7th Cir.1988).

If the nonmoving party fails to establish the existence of an essential element on which it bears the burden of proof at trial, summary judgment is proper—even mandated. Massey v. Johnson, 457 F.3d 711, 716 (7th Cir.2006) (citing Celotex, 477 U.S. at 322–23, 106 S.Ct. 2548) (holding that a failure to prove one essential element “necessarily renders all other facts immaterial”). In ruling on a motion for summary judgment, a court must view all facts in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir.1999); NUCOR Corp. v. Aceros Y Maquilas de Occidente, 28 F.3d 572, 583 (7th Cir.1994).

The Court may only consider admissible evidence in ruling on a motion for summary judgment. Fed.R.Civ.P. 56(c). But if only portions of an affidavit are inadmissible, “courts will only strike and disregard the improper portions of the affidavit and allow all appropriate recitations of fact to stand.” Hogue v. City of Fort Wayne, 599 F.Supp.2d 1009, 1016 (N.D.Ind.2009).

B. Policy Coverage1. Relevant Law

“Under Indiana law, the interpretation of an insurance...