Court Opinion

ID: 6699541
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:05:20.835539+00
Date Added: 2024-06-11T16:01:22.363092
License: Public Domain

Grady, Judge,
dissenting.
{¶ 32} I respectfully dissent from the decision of the majority. I would instead hold that the Medical Assurance Company, Inc., owes no duty to provide coverage to Robert P. Dillaplain, M.D., on the claim for coverage he made with respect to the medical-malpractice action commenced against him in 2005.
{¶ 33} A policy of liability insurance is a contract in which, in consideration of the insured’s payment of an agreed premium, the insurer promises that during *644the term of the policy the insurer will defend and indemnify the insured against risks of loss from legal liability that arise out of the occurrence of a defined event. That promise is generally referred to as the insurer’s duty of coverage.
{¶ 34} The policy that Medical Assurance issued to Dillaplain became effective on January 1, 2002, and states that its term or “policy period” is from January 1, 2002, to January 1, 2003. The policy period was subsequently extended by agreement of the parties to and including the year 2005.
{¶ 35} The coverage Medical Assurance promised to provide Dillaplain states: “We agree to pay on behalf of each insured all sums which such insured shall become legally obligated to pay as damages because of any medical incident which occurs after the retroactive date applicable to such insured and which is first reported during the policy period.” The policy also provides: “Retroactive date means the retroactive date applicable to each insured as specified in the Coverage Summary.” That date is specified in the Coverage Summary as “1/27/1983.”
{¶ 36} The “Definitions” provision of the policy states:
{¶ 37} “Medical Incident means:
{¶ 38} “A. A single act or omission or a series of related acts or omissions arising out of the rendering of, or failure to render, professional services to any one person by an Insured or any person for whose acts or omissions an insured is legally responsible, which results, or is likely to result, in damages;”
{¶ 39} “* * *
{¶ 40} “For purposes of this definition, treatment of mother and fetus (or fetuses) from conception through postpartum care constitutes a single medical incident, and a continuing course of professional services relating to substantially the same medical condition constitutes a single medical incident.”
{¶ 41} The exclusion from coverage in issue provides:
{¶ 42} “HI. EXCLUSIONS
{¶ 43} “We will not pay damages because of any of the following, and we will not provide a defense for any suit alleging any of the following:
{¶ 44} “* * *
{¶ 45} “K. Any medical incident which has been reported to another insurance carrier prior to the first date coverage is provided under the policy; any medical incident which occurred prior to the first date coverage is provided under the policy, if on such date, the insured knew or believed, or had reason to know or believe, that such medical incident had occurred; or any medical *645incident that occurred during a period in which the Insured was not covered under a policy of professional liability insurance.” (Boldface sic.)
{¶ 46} A medical-malpractice action was commenced against Dillaplain in 2005. He presented Medical Assurance with his claim for coverage in the action. It is undisputed that the medical incident or incidents on which the claims for relief in the 2005 action are founded occurred in 1993 and 1994. It is also undisputed that Dillaplain had reported those same medical incidents to another insurance carrier in 1995.
{¶ 47} Medical Assurance asked the common pleas court to construe its policy and determine what duty of coverage, if any, it owes Dillaplain with respect to the 2005 action. Medical Assurance argues that by reason of Dillaplain’s 1995 report of the same medical incident to another carrier, Medical Assurance is relieved of its duty of coverage by the exclusion in Section III.K. of its policy. The trial court rejected that argument and found that Medical Assurance owes Dillaplain a duty of the coverage he claimed. That judgment is now before us for review. Our standard of review is de novo.
{¶ 48} In construing the terms of the exclusions section of the insurance policy, we are guided by the rules of contract interpretation. First, “[i]t is well-settled law in Ohio that ‘[wjhere provisions of a contract of insurance are reasonably susceptible of more than one interpretation, they will be construed strictly against the insurer and liberally in favor of the insured.’ (Emphasis added.) King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208, 519 N.E.2d 1380, syllabus; see, also, Buckeye Union Ins. Co. v. Price (1974), 39 Ohio St.2d 95, 68 O.O.2d 56, 313 N.E.2d 844. It is axiomatic that this rule cannot be employed to create ambiguity where there is none. It is only when a provision in a policy is susceptible of more than one reasonable interpretation that an ambiguity exists in which the provision must be resolved in favor of the insured.” Hacker v. Dickman (1996), 75 Ohio St.3d 118, 119-120, 661 N.E.2d 1005.
{¶ 49} Also, “[t]he fundamental goal in insurance policy interpretation is to ascertain the intent of the parties from a reading of the contract in its entirety and to settle upon a reasonable interpretation of any disputed terms in a manner calculated to give the agreement its intended effect.” 57 Ohio Jurisprudence 3d (2005) 394, Insurance, Section 315. “Thus, whenever two constructions can be placed on a written contract of insurance, one of which will give force to all of its provisions, that one must be adopted.” 57 Ohio Jurisprudence 3d (2005) 402, Insurance, Section 320.
{¶ 50} “The Ohio Supreme Court also has stressed that while policy exclusions ‘will be interpreted as applying only to that which is clearly intended to be excluded * * *[,] the rule of strict construction does not permit a court to change the obvious intent of a provision just to impose coverage.’ Hybud Equip. Corp. v. *646Sphere Drake Ins. Co., Ltd. (1992), 64 Ohio St.3d 657, 665, 597 N.E.2d 1096.” (Emphasis omitted.) Colter v. Spanky’s Doll House, Montgomery App. No. 21111, 2006-Ohio-408, 2006 WL 235045, at ¶ 29.
{¶ 51} The trial court adopted the decision of its magistrate, who found that the exclusion does not apply to the 2005 claim. The magistrate reasoned that the operative clause in the exclusion, “reported to another carrier prior to the first date coverage is provided under the policy,” is ambiguous, in that it may refer either to a report to another carrier that was made prior to January 1, 2002, or to a report to another carrier that was made prior to January 27, 1983. The latter alternative would exclude Dillaplain’s 1995 report to another carrier from application of the exception, because the exception could then apply only to reports of medical incidents that occurred before January 27, 1983. Because an ambiguity must be construed in favor of the alternative that provides coverage, the trial court found that the exclusion therefore refers to January 27, 1983.
{¶ 52} The trial court’s analysis confuses the point in time after which a risk of loss can occur for which Medical Assurance owes a duty to provide coverage on a claim made by Dillaplain, with the point in time when Medical Assurance assumed the duty of coverage it owes. Medical Assurance assumed that duty on January 1, 2002, when the policy it issued to Dillaplain became effective. The risks of losses to Dillaplain that the policy covers can arise from medical incidents that occurred as early as January 27, 1983, but no coverage was then provided, because no duty of coverage then existed. Instead, coverage “is provided” under the terms of the policy only on and after January 1, 2002, when claims by Dillaplain requiring coverage may be made. Therefore, Dillaplain’s report to another carrier in 1995 of the same medical incident on which the 2005 action against him is founded triggers the exclusion and relieves Medical Assurance of its duty of coverage with respect to Dillaplain’s claim for coverage in connection with the medical-malpractice action that was commenced against him in 2005.
{¶ 53} The trial court erred when it found an ambiguity, because the terms of the exclusion are not reasonably susceptible to more than one interpretation. Reasoning that its reference to when coverage “is provided” means January 27, 1983, creates an ambiguity when there is none. The policy creates coverage that “is provided” beginning on January 1, 2002, and only then. Furthermore, reading the contract in its entirety and in a manner calculated to give the agreement its intended effect, and to give force to all of its provisions, it is clear that the disputed provision cannot refer to the alternative date the trial court settled on.
{¶ 54} An “exclusion” is “[a]n insurance-policy provision that excepts certain events or conditions from coverage.” Black’s Law Dictionary (7th Ed.Rev. 1999) 585-586. Therefore, an exclusion can only apply to a claim for coverage of losses *647arising from an insured risk which the policy otherwise covers. Under no interpretation of its terms does the policy provide coverage for claims made by Dillaplain for a risk of losses arising out of medical incidents that occurred prior to January 27, 1983. By selecting that date as “the first date coverage is provided under the policy,” the trial court confined application of the exclusion to claims by Dillaplain concerning medical incidents for which no risk of loss is covered by the policy. That interpretation renders the exclusion wholly superfluous and therefore a nullity. Parties to a contract cannot be assumed to have agreed to a term that is meaningless in relation to the rights and duties the contract creates. The interpretation is therefore unreasonable, preventing its application even were there an ambiguity.
{¶ 55} Appellees argue that the construction given the exclusion by the trial court would not render the exclusion meaningless. They contend that in that application, the exclusion could nevertheless apply to acts or omissions that occurred after January 27, 1983, but that were part of a continuing course of treatment that began prior to that date, though they were part of a single “medical incident.” The majority embraces that argument and adopts it as a finding, but it simply does not hold water.
{¶ 56} In defining the term “medical incident,” the policy provides: “For purposes of this definition, treatment of mother and fetus (or fetuses) from conception through postpartum care constitutes a single medical incident, and a continuing course of professional services relating to substantially the same medical condition constitutes a single medical incident.” (Emphasis added.) Therefore, being a part of a continuing course of treatment that began prior to January 27, 1983, renders acts and omissions that occurred after that date medical incidents to which the policy extends no coverage at all in relation to the risk of losses arising from them. An exclusion cannot create coverage; it can only preclude coverage which is otherwise provided.
{¶ 57} I would sustain the second assignment of error on a finding that the trial court erred when it granted the motion for summary judgment filed by appellees and would remand the case to the trial court for further proceedings consistent with the views I have stated.