Case Title: Physicians Insurance Co. v. Williams

Citation: 128 Nev. Adv. Op. No. 30

Docket Number: 

State: nevada

Court: Nevada Supreme Court

Date: 2012-06-28T00:00:00Z

Document:
428Nev, Advance Opinion 2

IN THE SUPREME COURT OF THE STATE OF NEVADA

PHYSICIANS INSURANCE COMPANY No, 54126

WISCONSIN, : FILED

Ye JUN 28 202

oe

   

 

Appeal from a district court summary judgment for
ldeclaratory relief in an insurance action. Eighth Judicial District Court,
JClark County; Douglas W. Herndon, Judge.

Reversed and remanded.

Lewis & Roca LLP and Daniel F. Polsenberg, Joel D. Henriod, and

jacqueline A. Gilbert, Las Vegas,
for Appellant.

fHlutchison & Steffen, LLC, and Michael K. Wall and Todd L. Moody, Las

egas,
for Respondent.

 

BEFORE CHERRY, C.J., GIBBONS and PICKERING, JJ,

OPINION
By the Court, PICKERING, d.

‘This appeal involves the interpretation of a claims-made
jprofessional liability insurance policy that appellant Physicians Insurance
Company of Wisconsin, Inc., dba. PIC Wisconsin (PIC). issued to
lnonparty dentist Hamid Ahmadi, D.D.S. ‘The policy covers dental

12- 20300

 
malpractice claims made against Dr. Ahmadi and reported to PIC during
ithe policy period. On cross-motions for summary judgment, the district
court determined that PIC received constructive notice of respondent
Glenn Williams's malpractice claim against Dr. Ahmadi while the policy
Jwas in force and held that this was enough to trigger coverage. Our
review is de novo, Powell v. Liberty Mutual Fire Ins. Co., 127 Nev. _.
|__, 252 P.8d 668, 672 (2011) (citing F. Neal, 119 Nev.
62, 64, 64 P.3d 472, 473 (2008) (insurance policy interpretation presents a
Jquestion of law); Wood v, Safeway, Inc,, 121 Nev. 724, 729, 121 P.3d 1026,
1029 (2005) (summary judgment review is de novo)), and we reverse.
1, BACTS
Williams recovered a $480,260 default judgment against Dr.

‘mers Ins, Exch.

   

Ahmadi. His complaint alleged that, without his knowledge or consent,
Dr, Ahmadi used street cocaine to anesthetize Williams's gums during a
12002 root canal. A short time later, Williams sideswiped a residential gas
Imoter while driving a cement truck for work. His employer subjected him
to a mandatory drug test, which came back positive for cocaine. Williams
Jhad never used cocaine, and he asked Dr. Ahmadi if the root canal
Imedications might have caused a false-positive test result, Dr. Ahmadi
Jacknowledged the possibility and wrote Williams's employer to suggest
|this explanation for the positive drug test result, but the employer was

Junconvinced. As a result, Williams lost his job and his 20-year career as a

junion truck driver.

The PIC policy had a retroactive date of April 13, 1998, and,
through renewals, its coverage extended to April 14, 2004. Williams filed
Jsuit against Dr. Ahmadi on April 15, 2004, the day after the PIC policy

xpired. Earlier, on February 6, 2004, while the policy was still in force
Williams sent Dr. Ahmadi a demand letter by certified mail. Dr. Ahmadi

 

 
jncither responded to Williams nor alerted PIC to the demand or the suit
|that followed. Five months after the policy expired, Williams, through his
fawyer, made demand directly on PIC.

Meanwhile, Dr. Ahmadi’s personal and professional life had

 

Ispun out of control. In December 2003, California authorities arrested
Ihim for possession of 57.8 grams (roughly two ounces) of cocaine and
charged him with drug trafficking. A month later, the Nevada State
Board of Dental Examiners obtained a stipulated order suspending his
Jdentistry license. And on April 13, 2004, Washington authorities arrested
Dr. Ahmadi for prescribing painkillers to himself in phony patient names.
PIC learned about Dr. Ahmadi’s meltdown anecdotally. An
lentry in its file log dated January 20, 2004, notes: “Joanie heard on news
ast nite that (Dr. Ahmadi] has been charged w/ giving patients cocaine,
JAround the same time, Dr. Ahmadi reported an office burglary in which
lexpensive equipment was stolen (PIC also insured this risk), Because
hore were no signs of forced entry, PIC became suspicious and hired an
investigator. The investigation turned up, among other things, two brief
Inewspaper accounts of Dr. Ahmadi’s drug-trafficking arrest. One article
reported that Dr. Ahmadi told the arresting officers that he did not sell
Jcocaine but kept it for personal use and for use in his dental practice and
that the Nevada State Board of Dental Examiners was “investigating the
allegations that Ahmadi used cocaine himself and if he used it on his
patients." The second article reported that Dr. Ahmadi’s dental license
jhad been suspended. PIC received fax copies of the articles in March

‘The Nevada State Board of Dental Examiners interviewed Dr.
| Ahmadis staff early on. One saw Dr, Ahmadi cook and smoke cocaine at
work, while others reported weight loss and bizarre mood swings.

 

 
12004; a few days later, PIC obtained a copy of the stipulated order
suspending Dr. Ahmadis license.

Dr. Ahmadi's license suspension gave PIC grounds to cancel
the policy and/or to assess an additional premium for continued coverage.*
[On April 2, 2004, PIC gave Dr. Ahmadi written notice of cancellation “due
to the change in the status of your dental license as ordered by the Nevada
IState Board of Dental Examiners.” It offered Dr. Ahmadi renewal
coverage through June 2, 2004, and an extended reporting endorsement or
“tail” coverage beyond that, contingent on Dr. Ahmadi paying additional
premiums of $199 and $2,862, respectively. Dr. Ahmadi paid neither, and
the policy expired on April 14, 2004.

When Williams later made direct demand on PIC. the
company took the position that coverage did not exist because the claim
lhad not been made and reported during the policy period. Williams
responded by filing the suit underlying this appeal. After discovery. the
[district court granted in part and denied in part the parties’ cross-motions
for summary judgment, The district court held that Williams did not have
Ja direct right of action against PIC to enforce his default judgment against,
Dr, Ahmadi, Nonetheless, it granted Williams declaratory relief, holding
[that Williams's claim had been made and reported during the policy
period:

In consideration of the language used in the policy
in place, the totality of the information in the
possession of [PIC], coupled with the nature of the

 

2Section H.1. of the policy states that “any [official] inquiry or action
Jaffecting your liconse to provide professional health care services .. . may
Jresult in our need to assess an additional premium charge or to restrict, or
Jcancel all, coverages provided by this policy.”

 

 
os

 

information and the manner in which it was
received, constitutes a timely claim having been
made on behalf of Mr. Williams pursuant to the
terms of the claims-made professional dental
liability insurance policy.

IPIC appeals?
II, DISCUSSION

‘The PIC policy is a claims-made-and-reported malpractice
policy. For coverage, a claim must be made and reported within the policy
period. In granting Williams declaratory relief, the district court focused
mm the policy's definition of “claim” without considering its insuring
lagreement clause and related provisions. This was error, in that the
lecision interpreted “claim” more broadly than the policy's language
reasonably allows and effectively recast the policy from a claims-notice
wlicy to an occurrence-notice policy. A court may not rewrite a policy
lunder the guise of construing it. See Griffin v. Old Republic Ins, Co., 122
Nev. 479, 483, 133 P.3d 251, 254 (2006).

A. Occurrence versus claims'made coverage
An occurrence-based policy provides broader coverage but at

jereater cost to the insured than a claims-made policy. Under an

 

‘currence policy, “it is irrelevant whether the resulting claim is brought

Jagainst the insured during or after the policy period, as long as the injury

Although Williams did not cross-appeal the order denying him
|standing to directly enforce the Ahmadi default judgment against PIC,
IPIC does not argue that this disables Williams from defending his
lécclaratory judgment as to timeliness. Also, neither side argued in the

istrict court that issues of fact precluded summary judgment as to
lkimeliness, See Schuck v, Signature Flight Support, 126 Nev. _. _. 245
IP.3d 542, 544 (2010) (a party opposing summary judgment on the grounds

iat disputed issues of fact exist must identify them in the district court)

 
ne

   
  
 
 
   
    
   
   
   
   
  
   
   
  
 
 

Jcausing event happens during the policy period.” 1 Barry R. Ostrager &
[Thomas R. Newman, Handbook on Insurance Coverage Disputes § 8.03la],

Jat 638 (15th ed. Supp. 2011). “By contrast, the event that invokes

 

lcoverage under a ‘claims made’ policy is transmittal of notice of the claim
during the policy period] to the insurance carrier.” Zzickerman_v, Nat.
[Union Fire Ins,, 495 A.2d 395, 406 (N.J. 1985),

Claims-made policies come in several varicties. “The most
restrictive type of claims-made policy is one that requires not only that the
‘aim be both made and reported to the insurer during the policy period,
nut also that the claim arise out of wrongful acts that take place after the
inception of the policy and during the policy period.” Ostrager & Newman,
. §4.02[b], at 165. Some claims-made-and-reported policies contain
‘awareness” or “discovery” provisions. Such provisions “allow the insured
0 report potential claims or events, acts or circumstances that the insured
-asonably believes may give rise to a claim against it in the future.” Id.
t 166, This affords an insured “additional protection for a claim or suit
hat may not be brought until years after the policy has expired, as long as
he insured provided notice to the insurer, during the policy period. of the

facts, circumstances, or events out of which the claim or suit arises.” Id,

 

‘The limited-coverage drawback of claims-made insurance “
jot without a corresponding benefit to the insured: in claims made
licies, risk exposure is terminated at a fixed point and, as a result,
junderwriters may more accurately predict an insurer's potential liability
jis decreased risk allows insure:s to supply claims made policies at a
lower price, thereby benefitting insureds.” Simpson & Creasy, P.C. v.
continental Cas. Co., 770 F. Supp. 2d 1351, 1355 (S.D. Ga. 2011) (quoting

 
os

 

Gerald P. Dwyer, Jr, Appleman on Insurance Law and Practice §
.o4Lalfal{a) 2010).

The knowledge that after a certain date the
insurer is no longer liable for newly reported
claims under a claims-‘made policy enables the
insurer to fix its reserves more accurately for
future liabilities and to compute premiums with
greater certainty. By limiting the maximum “tail”
exposure period, the insurer also avoids the
increased risks associated with future inflation.
the prospect of increasing jury awards, and
unanticipated changes in the substantive law.
‘Thus, the premiums on claims-made policies can
be set at lower rates than comparable coverage
under an occurrence form,

JOstrager & Newman, supra, § 4.02[b], at 162°63 (citations omitted)
|(internal quotation marks omitted); see American Cas. Co. v, Continisio,
17 F.3d 62, 68 (3d Cir. 1994) (“Claims-made policies are less expensive
Joecause underwriters can calculate risks more precisely since exposure
Jends at a fixed point.”).

‘The Nevada Legislature has recognized that claims-made
jinsurance plays an important role in meeting health care provider demand
for affordable malpractice insurance. Thus, NRS 690B.210 defines
| Icllaims-made policy” as “professional liability insurance [for health care
[providers] that provides coverage only for claims that arise from incidents
jor events which occur while the policy is in force and which are reported to
ithe insurer while the policy is in force.” Such coverage is valid subject to
ithe insurer complying with NRS 690B.200 through NRS 690B.370.
|Williams makes no argument that PIC or its policy violated Nevada law or

yublie policy.

 
B. The insuring agreement

As this is a coverage dispute, our analysis starts with the

policy’s insuring agreement clause, In the PIC policy this clause is
ntitled “Coverage Agreement” and states!
This is a claims-made policy. .

We will pay on your behalf damages that you are
legally obligated to pay because of any
professional health care incident that: (i) began on
or after the Retroactive Date, and (ii) arose from
professional health care services provided by
you..., and (ii) resulted in a claim that is first
received by you and reported to us during the
policy period pursuant to Section H.2. What To Do
If You Have A Claim of this policy.

Section H.2., “What To Do If You Have A Claim...” spells
yut the specific information the insured must provide in order to report @

 

aim:

a, In the Event Claim is Made Against You, you
must give us written notice, as soon as
practicable, but in no event more than fifteen
(15) days after the expiration of the policy
period. In your written notice, you must
include the ‘date, time and place of the
professional health care incident’ a description
of the professional health care services you
provided: a description of the professional
health care incident: the name, address and age
of the claimant or plaintiff; the names of
witnesses, including other treating health care
providers.

Williams sent his demand letter to Dr. Ahmadi by certified
imail on February 6, 2004. By its terms, the policy required Dr. Ahmadi to
jgive PIC written notice of the Williams demand, including in the notice a

lescription of the health care incident: its “date, time and place’

 

 

8

mn ae

 

 
on

 

description of the health care services provided; and the name and contact
information of the claimant and any witnesses. But Dr. Ahmadi did not
notify PIC of Williams's demand, and Williams did not redirect it to PIC

luntil months

 

iter the policy expired. By the express terms of its insuring
Jagreement clause, the policy thus does not cover the Williams claim,
Jbecause it was not reported to PIC during the policy period. See Nat'l
|Union Fire Ins. Co. v, Baker & McKenzie, 997 F.2d 805, 307-08 (7th Cir.
11993) (upholding judgment for the insurer on a claims-made-and-reported
[professional liability policy where the claim was made against the insured
Jduring one policy period but not reported to the insurer until later):
IE.D.LC. v, Barham, 995 F.2d 600, 605 n.9 (Sth Cir, 1993) (declining to
read-out” of the claims-made-and-reported policy its explicit notice
requirements).
An extended reporting endorsement was available to Dr.
‘hadi that, had he purchased it, would have covered the Williams claim.
whus, when PIC wrote Dr. Ahmadi on April 2, 2004, to cancel the policy
because his license had been suspended, it offered him extended reporting
“tail” coverage under Section C.2. of the policy, which states:

Extended Reporting Coverage (This is an Optional
Coverage).

a. Extended Reporting Coverage —_for
Cancellation or Non-Renewal
If your policy is canceled or non-renewed for
any reason, you have the right to purchase
extended reporting coverage. If you do not
purchase extended reporting coverage, you
will not have coverage for claims that you
first report to us after the end of the policy
period, except for those claims that were
first received by you during the policy period

 
and reported to us pursuant to Section H.2.

What To Do If You Have A Claim of the

policy.
[But the cost of this coverage was $2,862, and Dr. Ahmadi did not purchase
jit. Thus, the second sentence of Section C.2.. applies: “If you do not
jpurchase extended reporting coverage’—Dr. Ahmadi did not—"you will

jnot have coverage for claims that you first report to us after the end of the

 

policy period’—e.g., the Williams claim—“except for those claims that

Jvere first received by you during the policy period and reported to us
pursuant to Section H.2.”—none were.‘

“We will not rewrite contract provisions that are otherwise
[unambiguous [or] ‘attempt to increase the legal obligations of the parties
where the parties intentionally limited such obligations.” Griffin, 122
INev. at 483, 133 P.3d at 254 (quoting Senteney v, Fire Ins. Exchange, 101
INov. 654, 656, 707 P.2d 1149, 1150°51 (1985), Dr. Ahmadi did not pay for
the extended reporting endorsement that would have covered the Williams

Jaim, and it is unfair to conscript such coverage judicially. See

, 17 F.8d at 68 (“an extension of the notice period in a “claims

‘Neither side raised a notice prejudice argument in the district court
does so on appeal. See LVMPD v. Coregis Insurance Co., 127 Nev.

. 256 P.3d 958, 963-65 (2011); compare Ostrager & Newman, supra, §
.02{c}, at 200 ([MJany courts have declined to extend the notice-prejudice
‘ule to claims-made policies.”), and id. § 4.02[b], at 168 (“Because the
porting of a claim to the insurer during the policy period is one of the
sential terms of a claims‘made policy, a failure to give timely notice
hhould be lesa excusable under a claims-made policy than it would be
\der an occurrence policy.”), with Pension Trust Fund v. Federal Ins. Co.,
17 F.3d 944, 956-57 (9th Cir. 2002) (holding that the notice-prejudice rule
joes not apply to claims-made-and-reported policies because, in that
nntext, “notice is the event that actually triggers coverage’). We do not

 

 

 

 
made” policy constitutes an unbargained-for expansion of coverage, gratis,
resulting in the insurance company’s exposure to a risk substantially
Jbroader than that expressly insured against in the policy” (empha:

jomitted) (quoting Zuckerman v, Nat, Union Fire Ins, 495 A.2d 395, 406

 

C. Definitions section: actual and potential claims

Williams concedes that PIC did not receive actual notice of his
Jdemand for damages against Dr. Ahmadi while the policy was in force.
Nonetheless, he persuaded the district court that the news accounts of Dr.

|Ahmadi's disintegration, combined with Dr. Ahmadi's license suspension,

 

Jzave PIC constructive notice of a potential claim during the policy period
jand that this was enough to trigger coverage under the third alternative
definition of “claim” that appears in the PIC policy's definitions section.
pat section states
Claim—means:

(the receipt by you of a demand for damages
arising from a professional health care
incident, including service of suit, demand for
arbitration or any other notice of legal action
for damagesi or

(2)your transmittal to us of an oral or written
report from you regarding a professional health
care incident that is reasonably likely to give
rise to a demand for damages; or

(8) the receipt by us of an oral or written report
from someone other than you regarding a
professional health care incident that is
reasonably likely to give rise to a demand for
damages.

NOTE: A claim received by you must be reported
to us pursuant to Section H.2. What To Do If You
Have A Claim,

 

 
He

 

lin Williams's view, a newscast or other public report of an insured’s
professional misconduct—as a dentist using street cocaine to anesthetize
his root canal patients would be—qualifies as a “claim” under
subparagraph 3 above.® Going further, he maintains that the requirement
that the insured report actual claims in compliance with Section H.2.a. of
[the policy inherently does not apply to third-party reports of potential

[claims which, by definition, come from “someone other than” the insured.

 

But the “claim” definition is not self-contained. Its key terms,
professional health care incident” and “damages,” also carry specific
dofinitio

 

, which convey a requirement that, for an insured’s or a third
party's “report” of a potential “demand for damages” to qualify as a
claim,” it must include specific information about a specific wrongful act
land consequent injury to a patient. Thus, the policy defines “professional
Hhealth care incident” to mean “any act or omission in the furnishing of
professional health care services to any one person” and “damages” as “all
Jamounts of money that are payable because of physical or mental injury,
sickness or disease sustained by any person.” The references are singular
land specific, not generalized. And the word “report” that is used in

SPIC argues that issues of fact as to causation and whether
Williams's claim is excluded by its policy's “intentional, criminal or
malicious act or omission” exclusion remain, if this case is not resolved on
the basis of timeliness.

Professional health care services” is also a defined term. It is
|defined as “any services rendered in your health care practice, as defined
iin the Practice Endorsement attached to this policy, provided the person
rendering health care services has all licenses required to render the
services, and each license is current and valid.”

12

 
subparagraphs 2 and 3 of the “claim” definition, while not defined, is also
ised in the insuring agreement clause and the extended reporting clause
jin the context of a claim “reported to us during the policy period pursuant
‘0 Section H.2." (Emphasis added) The repeated references to “report”
Jand “reporting” denote more in the way of formal contact between the
jinsurer and the insured or the reporting third party than generalized
Jnowspaper notice, Compare Continisio, 17 F.3d at 69 (“[blecause notice of

ja claim or potential claim defines coverage under a claims-made

 

wlicy...the notice must be given through formal claims channel:
joining “a growing line of cases prohibiting an insured from insisting that
its insurer's underwriting department sift through a renewal application
ind decide what should be forwarded to the claims department on the
insured’s behalf” (internal quotation marks omitted)), with XIII Oxford
lEnglish Dictionary 651 (2d ed. 1989) (defining “report” as “Itlo give in or
inder a formal account or statement of or concerning (some matter or
thing); to make a formal report ons to state (something) in such a report’)
The parties do not cite, and our research has not turned up, @
wublished decision interpreting the precise “claim” definition used in the
IC policy. In allowing an insured’s or a third party's report of a potential
jemand for damages to qualify as a “claim,” the PIC policy's second and
hird alternative definitions of “claim” represent a type of “awareness” or
discovery” clause, for they “affordl] coverage for claims made after the
icy expires if, during the policy period ... the insurer [is put] on notice

acts/omissions/circumstances that might lead to a future claim” or, as

re, demand for damages. 3 Allan D. Windt, Insurance Claims &

 

 
com ae

  
   
   
 
  
  
  
   
  
  
   
  
   
    
  
  

§ 116
(sth ed. Supp. 2012). Because “{tJhe notice requirement in a discovery

Jota

 

serves to actually trigger the coverage,” it is generally held that the

insurer must receive “actual, as opposed to constructive,

 

jnoticeli]... absent poliey language leading to a different result, a
Jdiscovery clause should not be [deemed] satisfied unless the insurer was
Jput on notice of specifics.” Id, (footnote omitted).

The brief news accounts of Dr. Ahmadi’s bizarre (and self:
|serving) explanation to the California Highway Patrol of his reason for
possessing two ounces of street cocaine (if they bought his story, he would
face mere possession, as opposed to trafficking, charges) did not constitute
Ja “report” to PIC of an “act or omission in the furnishing of professional
lhealth care services to any one person” that is “reasonably likely to give
iso to a demand for damages.” ‘The news accounts mentioned a practice
hat. if actually engaged in, was illegal and wrong. However, they did not
identify when the practice occurred, whether patients suffered injury as a
fresult, and if s0, who the injured patient(s) were and what their
inticipated injuries might be. Compare City_of Harrisburg v, Intern,
596 F. Supp. 954, 959°60 (M.D. Pa. 1984) (“A
lewspaper article written and published [about an event], intended to be
fread by the general public, does not” provide adequate specifics to give
notice of a claim under a claims-made policy: without more, “the insurer
‘ould have no way of knowing that a claim for coverage was being made”
br was expected), aff'd, 770 F.2d 1067 (3d Cir. 1985), with Owatonna
‘linie—Mayo Health v. Medical Protective, 639 F.3d 806, 811 (8th Cir.

2011) (affirming judgment imposing liability on a claimsmade malpractice

uM

 
insurer who received notice during the policy period that its insured was
boing investigated by the Minnesota Board of Medical Practice: in contrast
to the notice in this case, the notice in Owatonna identified the five
Jpatients whose care the medical board was investigating and specified in
Jiair detail the specific deviations from the standard of care and the
jinjuries suffered by the patient secking to impose liability on the insured
[docton).

Without specifics, the news accounts of Dr. Ahmadi’s
Jdisintogration differ little, analytically, from the omnibus notice the
trustee of a bankrupt law firm attempted to give the firm's claims-made
malpractice carrier in Home Insurance Co, v, Cooper & Cooper, Ltd, 889
F.2d 746, 750 (7th Cir. 1989), or the hypothetical considered in

‘Cullough v. Fidelity & Deposit Co,, 2 F.3d 110, 112 (5th Cir. 1993), of a
luims-made insurer with notice that its insured attorney is a free spirit
‘ho has abandoned calendaring. In neither instance are there enough

secifics provided to qualify as a report of a potential demand for damages
lunder the policy's discovery clause. As Chief Judge Easterbrook wrote in
sjecting the bankruptcy trustee’s blanket notice of law firm incompetence
Jas insufficient under the policy's discovery clause, “If the trustee had
reason to believe that the firm's work ina given case would lead to
liability, it was entitled under the policy to inform the insurer within the
jeriod of coverage and so ensure indemnity if the potential came to pass.”
lHome Ins. Co, v. Cooper & Cooper, 889 F.2d at 750 (emphasis added). But
Hlaln effort to lodge claims on everything, to extend indefinitely the

werage of a 15-month policy, has no similar effect: it is merely
xatious.” Id.; accord McCullough, 2 F.3d at 112 (“if notice that an

insured attorney has a poor docket control system is accepted as coverage

 

 
triggering notice of the attorney’s wrongful act, the attorney's malpractice
[coverage would be triggered for any number of suits predicated on missed

 

Jdeadlines,” which is an unreasonable interpretation of a claims-made

policy's discovery clause; the insurer must receive “notice of specified

 

wrongful acts to trigger coverage’

“[Alllowing coverage to be triggered by broadly phrased,
innocuous, or non-specific statements, would permit an unbargained-for
lexpansion of the policy, undermining the key distinguishing characteristic
lof a claims made policy—reduced exposure for the insurer and lower
premiums for the insured.” Sigma Financial_v. American Intern,
Specialty, 200 F. Supp. 2d 710, 718 (B.D. Mich. 2002); see California
{Union Ins, v. American Diversified Sav,, 914 F.2d 1271, 1274-76 (9th Cir.
11990) (“The term ‘claim’ should not be interpreted so broadiy as to include

 

la regulatory agency's request of the insured to comply with regulations

Jwhore, as here, the agency did not directly threaten [the insured] with
liability.”); KPFE, Inc, v, California Union Ins. Co., 66 Cal. Rptr. 24 36, 45
|(Ct. App. 1997) (“Reports based upon speculation or rumor do not rise to
jthe level of notice of a claim under the awareness for discovery]

[provision.”).7

TWilliams suggests that PIC’s knowledge of Dr. Ahmadi's
misconduct imposed a duty to investigate that would have led it to the
Williams claim, since Williams was part of the Nevada State Board of
{Dental Examiners investigation. As KPFF recognizes, however, the duty
to investigate is an extension of the duty of good faith and fair dealing that
the insurer owes its insured and, in a claims'made-and-reported policy,
Jextends to the handling of reported claims, not claims that the insurer
might unearth. KPFF, 66 Cal. Rptr. 2d at 45.

 

 
mn

  
   
 
  
   
  
 
   
   
    
    
 
 
   
   
    
     
  
 
   
  
  

For a “report” of a potential demand for damages to qualify as
ja “claim” requires sufficient specificity to alert the insurer's claim

|department to the existence of a potential demand for damages ari

 

1g out
of an identifiable incident, involving an identified or identifiable claimant
wr claimants, with actual or anticipated injuries. This interpretation
fharmonizes the claim definition with the other provisions of the policy,
including its insuring agreement clause, reprinted supra section II.B,
hich requires the insured to provide specifics concerning an actual claim
Hor coverage to attach. See Mut. Real Estate Holdings, LLC v. Houston
» No. 10-ev-236-LM, 2011 WL 3841931, at *5 (D.N.H. Aug. 30,
}2011) (Ignoring the ‘Insuring Agreement’ section is not a reasonable way
interpret [a claims-made] policy.”).’ While an ambiguous term in an
jinsurance policy is construed against the insurer, the term “should not be

Hiewed standing alone, but rather in conjunction with the policy as a

"Because we resolve this case on the basis that the information
provided was insufficiently specific to constitute a “claim,” and because the
arties do not argue the issue, it is unnecessary to decide whether the
report of a potential claim, ie., the occurrence notice, must be followed by
Jnotice of the actual claim, as the insuring agreement clause suggests.
this issue has divided other courts and remains open. Compare Harbor
1s. Co, v. Continental Bank Corp., 922 F.2d 857, 369 (7th Cir. 1990)
sjecting the argument that the “occurrence notice and claim notice”
rovisions of a claims-made-and-reported policy “are alternative rather
Jan sequential requirements” as “contrary to the language and evident
yurpose of the [policy’s express reporting] requirements. The insurer
‘ants to know whether there is a possibility that it will be receiving a
aim after the policy period, but of courae it also wants to receive notice of
that claim when and if it materializes.”), with Continental Ins. Co. v.
x Inc,, 107 F.3d 1344, 1347 (9th Cir. 1997) (insureds
rere not required to give notice of an actual claim against them if they
iad given sufficient notice of the specific wrongful act that could lead to a
im under a discovery or awareness provision).

17

 
whole.” Fourth St. Place v. Travelers Indem, Co., 127 Nev. _, _, 270
P.3d 1235, 1239 (2011). So read, we do not find an ambiguity that would
permit us to construe the PIC policy to have been triggered by the public
information provided PIC in this case.

We therefore reverse and remand with instructions to enter

summary judgment in favor of PIC.

 

Pickering