Court Opinion

ID: 3027154
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:37:33.697988+00
Date Added: 2024-06-11T18:26:17.807246
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 00-3345
                                    ___________

Legion Insurance Company;              *
American Psychiatric Association       *
Risk Retention Group, Inc.,            *
                                       *
             Appellees,                * Appeal from the United States
                                       * District Court for the
      v.                               * District of Minnesota.
                                       *
Sally Rothenberg; Elliot Rothenberg;   *       [UNPUBLISHED]
Gregory Milne, MD; Twin Cities         *
Psychiatric Associates, P.A.,          *
                                       *
             Appellants.               *
                                  ___________

                             Submitted: June 11, 2001

                                   Filed: July 10, 2001
                                    ___________

Before BOWMAN and HEANEY, Circuit Judges, and KOPF,1 District Judge.
                          ___________

PER CURIAM.

      This is a declaratory-judgment action in a case involving coverage under a
professional malpractice insurance policy. Sally and Elliot Rothenberg appeal from the

      1
       The Honorable Richard G. Kopf, Chief Judge, United States District Court for
the District of Nebraska, sitting by designation.
District Court's grant of summary judgment for the plaintiff insurers, who provided
malpractice coverage for Dr. Gregory Milne, a psychiatrist. Sally Rothenberg was a
patient of Milne, who became her lover. To say the least, the relationship did not work
out well for Mrs. Rothenberg, who eventually filed a lawsuit against Milne and various
entities with which he was associated during his extended affair with her. Elliot
Rothenberg, her husband, separately filed suit against Milne.

       Pursuant to the terms of the insurance policy, the insurers provided Milne with
a defense to the suits by the Rothenbergs, but questioned whether they were obligated
to provide coverage for any award, and brought this declaratory-judgment action.
Meanwhile, the Rothenbergs settled with Milne. The settlement agreement provided
a judgment of $1.5 million for Mrs. Rothenberg and $500,000 for Mr. Rothenberg.
The agreement further provided that the Rothenbergs would collect only to the extent
that coverage was provided by Milne's malpractice insurance; to the extent the awards
fell under the policy's exclusions, the Rothenbergs would not seek to collect from the
personal or corporate assets of Milne or Twin Cities Psychiatric Associates, of which
Milne was the sole shareholder.

        The policy contains exclusions for "[a]ny claim, damages or cause of action
based in whole or in part on, or involving a claim of undue familiarity . . . if undue
familiarity is an essential element of such claim, damages, or cause of action," as well
as for claims involving improper handling of "transference" and "counter-transference"
issues. Description of Coverage 1994-1995 ¶¶ C.10, C.12. "Undue familiarity" is
defined in the policy as meaning "any actual or alleged sexual or social relationship
between [the insured physician] and the Claimant or any actual or alleged physical
contact by [the insured physician] of such claimant." Id. ¶ L.

       In granting summary judgment sustaining the insurers' position that the "undue
familiarity" exclusion precludes coverage for the Rothenbergs' claims, the District

                                          -2-
Court2 examined the complaints in the underlying malpractice actions and found that
they were replete with allegations concerning the sexual and social relationship
between Mrs. Rothenberg and Milne. The court recognized that the complaints alleged
instances of malpractice that occurred before Milne's relationship with Mrs. Rothenberg
became intimate, but determined that the sexual and social relationship and the alleged
malpractice are "so intertwined . . . as to be inseparable." Memorandum Opinion and
Order at 9 (quoting Govar v. Chicago Ins. Co., 879 F.2d 1581, 1582 (8th Cir. 1989)).
The court further determined that it would be impossible to separate the damage
inflicted by the alleged pre-intimacy malpractice from the damage inflicted by Milne's
totally unprofessional and egregious relationship with Mrs. Rothenberg. Accordingly,
the court determined as a matter of law that the insurers are protected by the undue-
familiarity exclusion and are not obligated to provide coverage for any of the
Rothenbergs' claims against Milne.

       For reversal, the Rothenbergs argue the District Court erred in holding that the
undue-familiarity exclusion barred all of their claims from coverage under Milne's
malpractice insurance policy. Having considered the arguments of the parties, their
briefs, and the record, we are satisfied the District Court correctly granted summary
judgment for Milne's insurers. Based on the well-reasoned memorandum opinion and
order of the District Court, we affirm. See 8th Cir. R. 47B.

      A true copy.

             Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

      2
      The Honorable Donovan W. Frank, United States District Judge for the District
of Minnesota.
                                          -3-