Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00105/USCOURTS-casd-3_11-cv-00105-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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- 1 - 11cv105

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

THE AMERICAN INSURANCE

COMPANY,

Plaintiff,

CASE NO. 11CV105 DMS (CAB)

ORDER GRANTING

DEFENDANT’S MOTION FOR

vs. RECONSIDERATION

MEDICAL PROTECTIVE COMPANY, et

al.,

Defendants.

In this action for equitable contribution and indemnity, Defendant The Medical Protective

Company (“MPC”) filed a motion for reconsideration of the September 8, 2011 Order Granting

Plaintiff’s Motion for Partial Summary Judgment, which Plaintiff The American Insurance Company

(“American”) opposed. For the reasons which follow, MPC’s motion for reconsideration is

GRANTED.

American and MPC issued professional liability policies to Shervin Erfani, DMD. Dr. Erfani

was a named defendant in several lawsuits charging him with fraudulent billing practices and

professional negligence. He allegedly demanded American and MPC to defend him in these actions.

Although MPC initially participated in Dr. Erfani’s defense, it stopped participating in May 2011. 

MPC filed an action against Dr. Erfani to rescind the extension contract endorsement to the

professional liability policy it issued to Dr. Erfani, which allegedly covers Dr. Erfani’s claims

underlying this action. Subsequently American filed this action against MPC for equitable

Case 3:11-cv-00105-DMS-KSC Document 44 Filed 12/05/11 Page 1 of 2
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contribution and indemnity. American alleged MPC had a duty to contribute to Dr. Erfani’s defense

and the settlement or judgment of the lawsuits, and should reimburse American for taking on more

than its share of these expenses. MPC asserted a defense of rescission, claiming it is not obligated to

contribute because its underlying contract with Dr. Erfani should be rescinded. 

American filed a motion for partial summary judgment requesting a finding that MPC cannot

assert the rescission defense under the circumstances of this case. The motion was granted by order

filed September 8, 2011. MPC seeks reconsideration of that order. 

Because there are genuine issues of material fact (1) whether Dr. Erfani’s misrepresentations

were material in light of the guarantee in MPC’s policy to offer an extension contract; and (2) whether

MPC complied with its contractual obligation to offer an extension contract to Dr. Erfani, and for the

reasons stated in the Order Denying Plaintiff’s Ex Parte Application for Default Judgment and Its

Motion for Reconsideration, filed concurrently herewith in related case, The Med. Protective Co. v.

Erfani, U.S. Dist. Ct. S.D. Cal. case no. 09cv2833-DMS(CAB), MPC’s motion for reconsideration

is GRANTED. Accordingly, the September 8, 2011 order is hereby amended and American’s motion

for partial summary judgment on MPC’s rescission defense is DENIED.

IT IS SO ORDERED.

DATED: December 5, 2011

HON. DANA M. SABRAW

United States District Judge

Case 3:11-cv-00105-DMS-KSC Document 44 Filed 12/05/11 Page 2 of 2