UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

FORT WAYNE DIVISION 

THE MEDICAL PROTECTIVE 

COMPANY OF FORT WAYNE 

INDIANA, 

 Plaintiff, 

v. CAUSE NO.: 1:13-CV-357-HAB 

AMERICAN INTERNATIONAL 

SPECIALTY LINES INSURANCE 

COMPANY, 

 Defendant. 

OPINION AND ORDER

In this litigation, Plaintiff Medical Protective Company of Fort Wayne, Indiana 

(MedPro or Plaintiff), has sued Defendant American International Specialty Insurance 

Company (AISLIC or Defendant), now known as AIG Specialty Insurance Company, for 

breach of the terms of a 2006 policy AISLIC issued to MedPro (the Policy). MedPro alleges 

that AISLIC breached the Policy when it refused to cover MedPro’s extra-contractual 

liability and eventual settlement of a third party’s claim against MedPro based on 

MedPro’s alleged breaches of duties owed to its insured, which were committed during 

MedPro’s defense of a medical malpractice action against that insured. The breach of 

contract claim is scheduled for a jury trial to begin on January 28, 2020. 

This matter is before the Court on the Stipulation [ECF No. 148] of the parties, filed 

on January 17, 2020. 
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ANALYSIS 

Interpretation and construction of contract provisions are questions of law. Bar 

Plan Mut. Ins. Co. v. Likes Law Office, LLC, 44 N.E.3d 1279, 1285 (Ind. Ct. App. 2015). When 

the facts of the case are not in dispute, what constitutes proper notice under a claimsmade policy is a question of law for the court to decide. Id.; see also Imperial Cas. & Indem. 

Co. v. Chi. Hous. Auth., 987 F.2d 459, 461 (7th Cir. 1993) (“If the facts surrounding notice 

are not disputed, a question of law is presented that may be answered on summary 

judgment.”). 

The Policy contained a Special Reporting Clause, which provides: 

If during the Policy Period . . . . , the CFO, General Counsel or CEO of the 

Insured shall become aware of any occurrence which may reasonably be 

expected to give rise to a claim against the Insured for a Wrongful Act 

which first occurs during or prior to the Policy Period, and provided the 

Insured gives written notice to the Company during the Policy Period . . . 

of the nature of the occurrence and specifics of the possible Wrongful Act, 

any claim which is subsequently made against the Insured arising out of 

such Wrongful Act shall be treated as a claim made during the Policy 

Period. 

ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS SHALL 

REMAIN THE SAME. 

(ECF No. 148-1 at 28.) The parties have stipulated that the Policy, containing the above 

provision, is admissible. 

 On June 28, 2007, MedPro gave notice to AISLIC of a potential claim against it 

arising out of an underlying medical malpractice lawsuit in Texas against MedPro’s 

insured, Dr. Phillips. The notice provided the basic facts of the medical malpractice 

action, and advised that MedPro had not settled two demands at the $200,000 policy 
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limits and that plaintiffs had suggested that MedPro had been “Stowerized” under Texas 

law. MedPro stated that a verdict for $11 million in compensatory damages and $3 

million in punitive damages had been entered in August 2005, and that the case was on 

appeal to the Texas Supreme Court for the enforcement of the Texas wrongful death cap. 

The parties have stipulated that the June 28, 2007, General Liability Notice of 

Occurrence/Claim document with attachments is admissible. 

 In a verified response to an interrogatory asking MedPro to identify all facts 

supporting its contention that the Policy provides coverage for the extracontractual claim 

as alleged in its Complaint, MedPro stated the following: 

Tim Kenesey, the CEO of MedPro, became aware of an occurrence which 

reasonably may be expected to give rise to a claim for a Wrongful Act 

against MedPro in approximately March or April 2007 after the Texas Court 

of Appeals affirmed the trial court judgment in the Bramlett Malpractice 

Action with respect to the application of medical negligence cap, Medical 

Liability and Insurance Improvement Act of 1977 (TEX. REV. CIV. STAT. 

art. 4590i) (repealed) (“Article 4590i”). 

(ECF No. 148-3.) For purposes of the Stipulation, AISLIC does not dispute that Mr. 

Kenesey first became aware of the Texas Court of Appeals opinion during the Policy 

Period (July 1, 2006–July 1, 2007). 

This Court previously determined that Endorsement No. 16, the Special Reporting 

Clause, is sufficiently broad to encompass developments in an underlying medical 

malpractice claim when reporting that an occurrence was reasonably expected to give 

rise to a claim. (1-16-20 Order, ECF No. 146.) MedPro was not, as AISLIC argued, limited 

to providing notice of when the General Counsel, CEO or CFO learned about MedPro’s 

failure to settle within policy limits. 
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Given the Court’s January 16, 2020, Order interpreting Endorsement No. 16, 

AISLIC stipulates and agrees that MedPro’s submission of Trial Exhibit 51 complied with 

the requirements of Endorsement No. 16 as it has been interpreted by the Court. 

However, AISLIC objects to and preserves its appellate rights with respect to the Court’s 

January 16, 2020 Order, and will make an offer of proof at trial based on an alternative 

interpretation of Endorsement No. 16. 

CONCLUSION 

For the reasons stated above, the Court accepts the parties Stipulation [ECF No. 

148], which will govern the presentation of evidence for purposes of trial. The Court finds 

that the Bramletts’ lawsuit against MedPro in 2009 is deemed made during the July 1, 

2006 – July 1, 2007, Policy Period because MedPro gave AISLIC timely and appropriate 

notice of an “occurrence” pursuant to the Special Reporting Clause. AISLIC has 

preserved its appellate rights with respect to this finding and will be permitted to make 

an offer of proof at trial. 

SO ORDERED on January 21, 2020. 

 

 s/ Holly A. Brady 

JUDGE HOLLY A. BRADY 

UNITED STATES DISTRICT COURT