Court Opinion

ID: 1008036
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:34:13.023322+00
Date Added: 2024-06-11T09:14:22.023570
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT

PATRICIA BALL,                          
                 Plaintiff-Appellant,
                 v.
NCRIC, INCORPORATED, a/k/a                    No. 01-1716
National Capital Reciprocal
Insurance Company,
                 Defendant-Appellee.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Greenbelt.
             Alexander Williams, Jr., District Judge.
                         (CA-00-832-AW)

                      Argued: April 2, 2002

                      Decided: July 10, 2002

  Before WILKINS, TRAXLER, and GREGORY, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.

                            COUNSEL

ARGUED: Gregory Charles Mitchell, Washington, D.C., for Appel-
lant. Lee Thomas Ellis, Jr., BAKER & HOSTETLER, L.L.P., Wash-
ington, D.C., for Appellee. ON BRIEF: Stephen C. Leckar,
BUTERA & ANDREWS, Washington, D.C., for Appellant.
2                        BALL v. NCRIC INC.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Patricia Ball appeals a district court order granting summary judg-
ment against her and denying her cross-motion for summary judg-
ment in her third-party beneficiary action against liability insurer
NCRIC, Incorporated. We reverse and remand for further proceed-
ings.

                                  I.

   NCRIC insures doctors against medical malpractice claims. In
1987, NCRIC insured Dr. George E. Daniel, a Maryland physician,
under a "claims-made" policy. The policy required NCRIC to indem-
nify Daniel for "[a]ll sums which the insured shall become legally
obligated to pay as damages, to which this insurance applies, because
of any claim or claims first made against the insured during the policy
period caused by a medical incident." J.A. 109-10. It also obliged
NCRIC "to defend any suit against the insured seeking damages
because of [an] injury." Id. at 110.

   From April to November 1987, Daniel treated Ball for migraine
headaches and depression. During home visits, he would administer
to Ball a variety of drugs, none of which had been prescribed to her.
These drugs would put Ball into a state of stupor, during which time
Daniel would sometimes coerce her into having sex with him. Ball
also became addicted to the drugs, causing her severe health prob-
lems.

   Daniel was arrested in November 1987 on separate charges of ille-
gally selling narcotics. He was arraigned and released on $200,000
bond, after which he fled the country and did not return for his Febru-
ary 22, 1988 guilty plea date. Daniel was subsequently apprehended
in May 1991.
                         BALL v. NCRIC INC.                           3
   Ball learned of her potential malpractice claim in late 1987. Her
attorney spoke with a NCRIC claims representative on December 14,
1987 and the following day prepared and had hand-delivered a letter
advising NCRIC of Ball’s medical malpractice claim against Daniel.
As a result of this notice, NCRIC telephoned Daniel at his home and
at his office in January 1988, but the phones were disconnected.
NCRIC then advised Ball’s counsel in May 1988 that it would inves-
tigate the claim. On approximately May 27, 1988, NCRIC sent letters
requesting Daniel’s cooperation to three different addresses, including
one in Canada that Daniel had given NCRIC. By this time, however,
Daniel was a fugitive, and NCRIC received no response.

   Almost four years later, in April 1992, Ball filed a formal arbitra-
tion claim before the Maryland Health Claims Arbitration Office
(HCA). Nothing happened regarding her claim for over a year, but on
July 14, 1993, Ball’s attorney wrote NCRIC informing it that Daniel
had been served on April 3, 1993. Counsel also provided NCRIC with
a claim statement and affidavit of service filed with the HCA panel
on April 28, 1993 showing Daniel’s then-current address in a federal
prison in Seagoville, Texas. After receiving the letter, NCRIC did not
contact Daniel, nor did it take any other action with regard to the
claim other than to maintain that the claim was made outside Daniel’s
policy period.

   In March 1995, Ball moved for an order of default against Daniel,
and she was awarded a default judgment on September 24, 1996. Ball
then instituted this action against NCRIC to collect under Daniel’s lia-
bility insurance policy. NCRIC raised several defenses, including that
Ball’s claim against Daniel fell outside of the policy period, that Dan-
iel breached his duties to notify NCRIC of a claim and to cooperate
with its investigation, and that the damage award was the result of an
intentional tort and therefore outside the scope of the policy. Both
parties moved for summary judgment.

   The district court granted NCRIC’s motion and denied Ball’s. The
court concluded that as a matter of Maryland law NCRIC made a
good faith effort to investigate Ball’s claim when it sent letters to
Daniel at all of his known addresses, but that Daniel wilfully refused
to cooperate. The court also concluded as a matter of law that NCRIC
was prejudiced by Daniel’s noncooperation because had he cooper-
4                         BALL v. NCRIC INC.
ated, he might have provided testimony that would have demonstrated
either that he was not liable to Ball or that NCRIC had no duty to
indemnify Daniel.1 Accordingly, the district court ruled that Daniel’s
noncooperation justified NCRIC’s denial of coverage.

                                   II.

                                   A.

   Ball contends that the district court erred in ruling as a matter of
law that NCRIC was prejudiced by Daniel’s noncooperation. We
review the grant of summary judgment de novo, viewing the disputed
facts in the light most favorable to Ball. See Figgie Int’l, Inc. v. Des-
tileria Serralles, Inc., 190 F.3d 252, 255 (4th Cir. 1999). Summary
judgment is appropriate "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law."
Fed. R. Civ. P. 56(c).

   Maryland law provides that a liability insurer may not deny cover-
age based on the insured’s breach of a cooperation clause unless the
insurer proves that it was prejudiced by the breach.2 See Md. Code
Ann., Insurance § 19-110 (1997); Allstate Ins. Co. v. State Farm Mut.
Auto. Ins. Co., 767 A.2d 831, 840 (Md. 2001). In this regard, the
insurer must establish that the insured’s willful failure to cooperate
"has, or may reasonably have, precluded the insurer from establishing
a legitimate jury issue of the insured’s liability." Allstate, 767 A.2d
at 843.

   Here, the district court erred in ruling as a matter of law that
NCRIC met that standard. NCRIC has not demonstrated that Daniel’s
failure to cooperate while he was a fugitive hindered its ability to
defend itself against Ball’s suit. Even assuming that Daniel’s coopera-
tion might aid NCRIC’s defense, there is nothing in the record to
    1
    The district court noted that Daniel could have stated that Ball con-
sented to have sex with him.
  2
    The parties agree that Maryland law applies.
                         BALL v. NCRIC INC.                           5
show that the value of such assistance diminished between 1988
(when he became a fugitive) and 1993 (when NCRIC was informed
he had been apprehended). Moreover, there is no evidence that Daniel
would not have cooperated in NCRIC’s investigation had NCRIC
contacted him when it learned he had been apprehended. Accord-
ingly, because NCRIC has not demonstrated prejudice as a matter of
law from any event other than its own decision not to investigate
Ball’s claim once it located Daniel, Daniel’s failure to cooperate
while he was a fugitive does not justify NCRIC’s denial of coverage.
See Gen. Accident Ins. Co. v. Scott, 669 A.2d 773, 780 (Md. Ct. Spec.
App. 1996) ("An insurer cannot assert prejudice with regard to its
ability to conduct an investigation that it never even tried to con-
duct."); see also 14 Couch on Insurance § 199:21 (3d ed. 1999)
(explaining that liability insurer cannot deny claim based on insured’s
noncooperation unless insurer has exercised reasonable diligence in
seeking insured’s cooperation).

                                  B.

   NCRIC argues as an alternative basis for affirming the grant of
summary judgment that, as a matter of law, it was prejudiced by Dan-
iel’s failure to notify it of Ball’s claim. See Md. Code Ann., Insurance
§ 19-110 (providing that insurer may not deny coverage based on
insured’s breach of duty to provide notice of claim unless insurer
proves prejudice from breach). Ball contends that her own notice to
NCRIC prevented any prejudice. We agree with Ball.

   Ball forecasted evidence that her attorney telephoned NCRIC
regarding her claim on December 14, 1987 and had a follow-up letter
delivered the next day. Indeed, NCRIC’s May 27, 1988 letters to Dan-
iel requesting his cooperation confirm that NCRIC was not prejudiced
by any notice failure on Daniel’s part. See J.A. 137 (letter from
NCRIC to Daniel stating that "NCRIC has been notified of a claim
against you for alleged negligent treatment of [your] patient, Patricia
[Ball]"). Accordingly, we reject NCRIC’s suggestion that the grant of
summary judgment can be affirmed on this basis.

                                  C.

  NCRIC further maintains that the grant of summary judgment
should be affirmed because Ball’s claim was made outside of the pol-
6                        BALL v. NCRIC INC.
icy period. NCRIC notes that Ball’s HCA action was filed in 1992
and Daniel’s policy expired January 1, 1988. Ball responds that
claims are considered to be made under the policy when NCRIC
receives written notice of the claim, which here was December 15,
1987. Again, we agree with Ball.

   As is relevant here, the policy obligates NCRIC to indemnify Dan-
iel for "[a]ll sums which the insured shall become legally obligated
to pay as damages, to which this insurance applies, because of any
claim or claims first made against the insured during the policy
period." Id. at 109-10. The policy provides that "[a] claim shall be
considered to be first made when [NCRIC] first receives written
notice of the claim or occurrence." Id. at 111.

   NCRIC received written notice of the claim on December 15, 1987
in the form of the letter from Ball’s attorney confirming his earlier
telephone conversation concerning Ball’s medical malpractice claim
against Daniel.3 NCRIC argues that a claim is not considered to be
made when NCRIC first receives written notice of the claim if the
notice was provided by a third party rather than by the insured.
NCRIC’s interpretation is at odds with the unambiguous language of
the policy, however. See Fister v. Allstate Life Ins. Co., 783 A.2d 194,
203 (Md. 2001) (explaining that if the language of an insurance policy
is unambiguous, it is to be given its plain meaning). Although the pol-
icy does obligate Daniel himself to notify NCRIC of any occurrence,
claim, or suit to which the policy applies, this obligation appears in
a separate section of the policy from the language concerning when
a claim is considered to have been made.

   NCRIC also apparently argues that there could have been no claim
for Ball to give notice of in 1987 because the terms "claim" and "suit"
are synonymous and Ball had not yet filed a lawsuit in 1987. We dis-
agree. Although "claim" and "suit" are not defined in the policy, the
most common meaning of the noun "claim" is "demand." Webster’s
3d New Int’l Dictionary 414 (1981); see Bushey v. N. Assurance Co.
of Am., 766 A.2d 598, 600 (Md. 2001) (explaining that words in an
insurance policy are to be given their ordinary meaning unless another
    3
   NCRIC does not argue in its brief that the contents of the December
15 letter were insufficient, and we do not decide whether they were.
                          BALL v. NCRIC INC.                             7
meaning is indicated). And, the language of the policy further sug-
gests that a claim can exist before a lawsuit is filed. See, e.g., J.A. 110
(obligating NCRIC to defend a "suit" against the insured but giving
NCRIC authority to settle any "claim or suit" with the insured’s con-
sent).
                                   III.
   Ball also argues that the district court erred in denying her cross-
motion for summary judgment. Because the denial of Ball’s motion
is an unappealable interlocutory order, we decline to consider her
challenge to that ruling.
   An order denying a motion for summary judgment is generally an
unappealable interlocutory order. See O’Connor v. United States, 956
F.2d 48, 52 (4th Cir. 1992). Such an order does not become appeal-
able merely by virtue of our review and reversal of a grant of sum-
mary judgment to the opposing party. See id. This court may have
jurisdiction to review an otherwise unappealable order if (1) it is inex-
tricably intertwined with an appealable order or (2) consideration of
the unappealable order is necessary to ensure meaningful review of
the appealable order. See Swint v. Chambers County Comm’n, 514
U.S. 35, 51 (1995). Neither circumstance applies here, however. The
orders are not inextricably intertwined since determining Ball’s enti-
tlement to summary judgment would require us to resolve NCRIC’s
contention that the policy does not provide coverage because Ball’s
damage award was the result of an intentional tort. And, review of the
denial of Ball’s summary judgment motion is clearly not necessary to
ensure meaningful review of the grant of NCRIC’s motion.
                                   IV.
   In sum, because NCRIC failed to establish as a matter of law that
its own lack of reasonable diligence in investigating Ball’s claim was
not the cause of its inability to obtain Daniel’s cooperation, the dis-
trict court erred in granting summary judgment to NCRIC on the basis
of Daniel’s failure to cooperate. For this reason and because NCRIC’s
other asserted grounds for affirmance are without merit, we reverse
the grant of summary judgment to NCRIC and remand for further
proceedings.
                                          REVERSED AND REMANDED