Is the aggregate limit of a claims-made medical professional liability policy calculated based on the year in which the claim is filed or the year the covered medical incident occurs?
What is the limit of insurance coverage available for the medical practice entity for trans-vaginal mesh claimants who settled their claims with a former, employed physician of the practice entity?
Twenty-three medical malpractice victims filed a declaratory judgment action to resolve a dispute regarding the limits of coverage under an insurance policy issued by West Virginia Mutual Insurance Company (“WVMIC”). The plaintiffs are all former patients of a doctor who surgically implanted trans-vaginal mesh in 2006 and 2007 to treat pelvic organ prolapse. The plaintiffs filed medical malpractice claims against the doctor and vicarious liability claims against his employer, United Health Professionals, Inc. (“UHP”). Both the doctor and UHP were insured under the policy issued by WVMIC. The incidents occurred over the span of two (2) different policy periods.
The Plaintiffs, the doctor, UHP and WVMIC reached a global settlement agreement to end the malpractice litigation and to resolve a dispute regarding insurance policy limits, involving a policy issued by WVMIC, through a declaratory judgment action. The Plaintiffs and WVMIC agreed to submit the coverage dispute to the Kanawha County Circuit Court. The Circuit Court determined there was $6 million in coverage for UHP under the policy issued by WVMIC. WVMIC challenged the Circuit Court's finding regarding the amount of coverage.
The Petitioner, WVMIC, argues that the Mesh Plaintiffs stand in the shoes of UHP as an assignee. As such, they are prohibited from arguing for a rigid interpretation of the Policy which would provide $6 million in coverage. WVMIC argues that the Circuit Court erred by finding there was $6 million in coverage when the face of the policy indicates there was only $3 million in aggregate limits of insurance. WVMIC contends the Circuit Court erroneously determined that the 2006 and 2007 policies supplied aggregate limits of insurance (under a 2010 policy that was in effect at the time the underlying litigation was instituted) and converted the 2006 and 2007 claims-made policies into occurrence policies in contravention of the plain language of the 2010 policy. In the alternative, WVMIC urges the Supreme Court to apply the doctrine of mutual mistake to equitably reform the policy to conform to the clear and incontrovertible intent of the parties.
The Respondents, the medical malpractice victims, argue that the policy is unambiguous and, as such, not subject to judicial construction or interpretation under longstanding West Virginia precedent. The Respondent asserts that the Circuit Court correctly applied West Virginia law to resolve the coverage dispute, setting forth undisputed findings of fact that dictate fundamental conclusions of law.
This case could have significant implications regarding the interpretation and application of insurance contracts generally in West Virginia, and the law to be applied when it is argued that a contract’s integration is at odds with the parties’ intent.