Case Title: ProSelect Insurance Co. v. Levy

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2011-09-13T00:00:00Z

Document:
ProSelect Insurance Co. v. Levy (2010-438)
 
2011 VT 109
 
[Filed 13-Sep-2011]
 
ENTRY
  ORDER
 
2011 VT 109
 
SUPREME COURT
  DOCKET NO. 2010-438
 
MARCH TERM, 2011 
 
ProSelect Insurance Company
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APPEALED FROM:
 
}
 
    v.
}
Superior Court, Chittenden Unit,
 
}
Civil Division
 
}
 
Robyn Levy
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DOCKET NO. S1292-08
  CnC
 
 
 
 
 
Trial Judge: Helen M. Toor
 
In the above-entitled
cause, the Clerk will enter:
 
¶ 1.            
Plaintiff ProSelect Insurance Company filed this declaratory relief
action to determine its duty to indemnify its insured in a lawsuit alleging
medical malpractice and sexual assault.  The trial court construed a
policy exclusion to bar coverage and entered judgment
in favor of ProSelect.  Robyn Levy, plaintiff in the underlying suit,
appeals from the judgment, asserting that: (1) the malpractice claims are
covered under the concurrent causation doctrine; and (2) the policy exclusion
as interpreted by the trial court contravenes public policy.  We affirm.
¶ 2.            
The material undisputed facts may be summarized as follows.  Levy's
complaint alleged that she began psychiatric counseling with the insured, Dr.
Peter J. McKenna, in July 2003 and that treatment continued until early 2005.[1]  During that time, she alleged that
Dr. McKenna negligently failed to properly diagnose her psychological disorder,
prescribed harmful medications, encouraged her to pursue "unhealthy lifestyle
choices," failed to refer her to a community-based mental health program, and
engaged in treatment "at variance with accepted professional protocols." 
In a separate count, Levy alleged that, "[i]n the course of . . . 
treatment," Dr. McKenna had committed sexual assault and
battery.    
¶ 3.            
The sexual assault allegations came to light when Levy informed her
treating physician, who contacted law enforcement officials.[2]  In a subsequent interview with
investigators, Levy recounted her history of psychiatric illness, including
anorexia nervosa and bipolar disorder that began in adolescence, and multiple
resulting hospitalizations.  In July 2003, Levy began treatment with Dr.
McKenna at his office, which was located at his home in Essex Junction. 
She recalled that, during their first session, she informed Dr. McKenna that
she had engaged in a sexual relationship with a former psychiatrist. 
During sessions Dr. McKenna focused on that relationship, and would often
stroke her hair and embrace her.  In December 2003, some six months after
the start of their counseling, Dr. McKenna showed up at Levy's
 apartment, and they engaged in sexual intercourse. 
Thereafter, Levy recalled, the sexual relationship continued and intensified;
Dr. McKenna would regularly visit her apartment several times a week, they went
on camping trips together, and she occasionally stayed at Dr. McKenna's house
when his wife was away.  The relationship ended in February 2005. 
¶ 4.            
In her statement to the investigators and in response to discovery, Levy
claimed  that Dr. McKenna had attempted to
isolate her by refusing to refer her to other health care providers, recalling
that he stated, "You don't need them, you have me," and by prescribing pain
medications to keep her dependent.  Levy's expert, Dr. Goldstein, observed
that Dr. McKenna's pain prescriptions "created a psychological climate that
played into her pathology" and noted that "at Dr. McKenna's instigation [Levy]
even cut off her contracts with the nutritionist," which exacerbated her eating
disorder and led to further health problems.  Dr. Goldstein found in Dr.
McKenna's course of treatment an "overall pattern to distance [Levy] and isolate
her from everybody in her outside life who was interested in her welfare and
potentially could help her."  As he explained, "it appeared that . . . in
terms of providing treatment, [Dr. McKenna was] monopolizing her all for
himself."  In addition to exacerbating her eating disorder and related
physical problems, Dr. McKenna's behavior had the further resultaccording to
Dr. Goldsteinof deepening Levy's "mistrust" of the medical profession, of
making it more difficult for her to find another treating physician, and of
impairing her ability to hold a job and otherwise function normally.  At
Dr. McKenna's sentencing on the criminal charges, Levy summarized the alleged
misconduct in her victim-impact statement as follows: "He was my lover, my
psychiatrist, my therapist, my every source of human contact . . . . I was
alone in agony, totally isolated . . . . He realized how vulnerable . . . I was
and he played that card . . . for all it was worth."  
¶ 5.            
In September 2008, ProSelect filed this declaratory relief action,
seeking a declaration that its professional liability policy excluded coverage
of the underlying suit.[3] 
The parties filed cross-motions for summary judgment, and the trial court
issued a written ruling in June 2010 in favor of ProSelect, declaring that it
had no obligation under the policy to indemnify Dr. McKenna's estate for any of
the claims asserted in the underlying suit.  The trial court relied on a
policy exclusion that provides:
This
policy does not apply to any liability of an insured or to any damages,
incidents, claims or suits . . . [w]hich, in whole or in part, arise out of or
contain any allegations of any of the following by any person: . . . (a) Sexual
intimacy, . . . exploitation, assault or undue
familiarity; (b) Mishandling of transference or countertransference. . . . (d)
The abandonment of a patient with whom an insured has had an intimate or sexual
relationship, or the failure to refer such patient to an appropriate healthcare
provider.  
¶ 6.            
The trial court reasoned that the underlying action was indisputably a
"suit" that contains an allegation of sexual assault.  Therefore, by its
plain terms the policy barred coverage of the complaint in its entirety,
"[e]ven assuming" that the medical malpractice count wasas Levy
claimed"totally unrelated" to the sexual assault and therefore otherwise
covered.  The trial court thus granted ProSelect's motion and entered
judgment in its favor.  This appeal followed.   
¶ 7.            
Levy contends the trial court misapplied the policy exclusion and
governing case law because her malpractice claims are "wholly independent" of
the sexual assault allegation.   She relies on the "concurrent
causation" doctrine which we adopted in State Farm Mutual Automobile
Insurance Co. v. Roberts, 166 Vt. 452, 459, 697 A.2d 667, 671 (1997). 
Under this doctrine, if an insured's liability arises from concurrent but
separate acts, and one of them is covered by the policy, "coverage may not be
denied merely because a separate excluded risk was an additional cause of the
accident."  Id. at 456, 697 A.2d  at 669. 
We stressed, however, that the conduct "on which coverage is premised must
somehow be independent of the conduct excluded from the policy."  Id.
at 463, 697 A.2d  at 673-74.  
¶ 8.            
The short answer to Levy's reliance on the concurrent causation doctrine
is that it is misplaced.  As noted, the trial court here concluded that,
even if the malpractice claims were, as Levy claimed, "totally unrelated to the
sexual assault," the unambiguous policy language plainly excludes coverage
where, as here, the claimant's suit contains an allegation of sexual
misconduct.  The record also makes clear, however, that the malpractice
and assault counts are inextricably intertwined, so that the concurrent
causation would be unavailing in this case in any event.  As summarized
above, Levy's malpractice claims derive from the theory that Dr. McKenna was
intent on isolating her from other health care providers in order to preserve
their improper sexual relationship, and that the allegedly improper pain
prescriptions, refusal to refer her to other health care providers, and other
deviations from accepted medical norms were all designed to accomplish this end.
 Thus, the malpractice and assault claims can not be viewed as separate or
independent causes, and coverage can not be grounded on the concurrent
causation doctrine.  See Mailhiot v. Nationwide Mut. Fire Ins. Co.,
169 Vt. 498, 504, 740 A.2d 360, 364 (1999) (holding that where allegedly
covered "act of negligence . . . is inseparable from the excluded conduct . . .
the concurrent causation doctrine does not apply"). 
¶ 9.            
This conclusion resolves Levy's additional assertion that the trial
court's decision violates public policy by excluding covered as well as
noncovered claims.  To be sure, one state court has held that a policy
provision limiting the amount of professional liability coverage of "all
claims, whether related to sexual misconduct or not, once sexual misconduct is
alleged," contravenes public policy.  Am. Home Assurance Co. v. Cohen,
881 P.2d 1001, 1009 (Wash. 1994); see also Am. Home Assurance Co. v.
Stephens, 130 F.3d 123, 127 (5th Cir. 1997) (invalidating coverage
limitation based on "[t]he unique public policy concerns implicated when both
sexual and non-sexual misconduct claims independently exist").[4]  As noted, however, we are not
dealing here with independent and unrelated claims of non-sexual misconduct
otherwise covered under the policy, but rather with a case where all of the
claims essentially derive from the noncovered allegation of sexual
misconduct.  Accordingly, we find no public policy violation arising from
the decision to exclude coverage in this case.  
           
Affirmed.
           
 
 
 
BY THE COURT:
 
 
 
 
 
 
 
Paul L. Reiber, Chief
  Justice
 
 
 
 
 
John A. Dooley, Associate
  Justice
 
 
 
 
 
Denise R. Johnson, Associate
  Justice
 
 
 
 
 
Marilyn S. Skoglund,
  Associate Justice
 
 
 
 
 
Brian L. Burgess, Associate
  Justice
 
 
 
 
Note:  Justice Dooley was not present for oral
argument, but reviewed the briefs, listened to oral argument and participated
in the decision.
 

[1]  The named defendants in the complaint
were the Estate of Peter J. McKenna, who died since the events in question, and
Linda McKenna, Dr. McKenna's wife and administrative assistant.  The trial
court dismissed the claims against Linda McKenna, and this Court
affirmed.  Levy v. Estate of Peter J. McKenna and
Linda McKenna, No. 2009-431 (Vt. May 21, 2010) (unpub. mem.), available at
http://www.vermontjudiciary.org/d-upeo/upeo.aspx.   
 
[2] The revelations led to a professional
misconduct complaint and Dr. McKenna's suspension from practice, as well as
criminal charges and a no contest plea to two counts of engaging in sexual
relations with a vulnerable adult.  
 
[3]  The complaint also raised issues
relating to ProSelect's obligation to pay defense costs incurred in the
underlying disciplinary proceeding and civil suit, but neither party has
appealed the trial court's rulings in this
area.        
[4]  The decision in Stephens was
ultimately withdrawn after the Supreme Court of Texas, in responding to a
certified question, ruled that the policy exclusion did not violate public
policy.  See Am. Home Assurance Co. v. Stephens, 164 F.3d 956 (5th
Cir. 1999); Am. Home Assurance Co. v. Stephens, 982 S.W.2d 370 (Tex.
1999) (per curiam).