United States District Court, D. Arizona
Honorable G. Murray Snow United States District Judge.
before the Court is Plaintiff/Counterdefendant National Fire
& Marine Insurance Company's (NF&M) Motion for
Judgment on the Pleadings. (Doc. 73). For the following
reasons, the Court grants the motion in part and denies the
motion in part.
Dr. William Hall, provides cosmetic procedures and surgeries
through his company, Infini, PLC (collectively,
“Infini”). (Doc. 1 ¶ 9; Doc. 25 ¶ 6).
On August 12, 2014, Dr. Hall performed a liposuction
procedure on Defendant Donna Willis. (Doc. 1 ¶ 10; Doc.
25 ¶ 6). Subsequent to the liposuction, Ms. Willis
required hospitalization and additional surgeries. Ms. Willis
filed a complaint against Infini in Maricopa County Superior
Court. (Doc. 1 ¶¶ 11-13; Doc. 25 ¶ 7). The
case before this Court principally concerns whether the
Plaintiff is obliged to provide the Defendants with coverage
and/or a defense for Ms. Willis's claims in the Maricopa
County Superior Court.
time of Ms. Willis's surgery, Infini was insured against
malpractice claims by Lexington Insurance Company (produced
by Wells Fargo Insurance Services). (Doc. 1 ¶ 16; Doc.
25 ¶ 9). On September 4, 2014, Ms. Willis's husband
requested Ms. Willis's medical records from Infini. Upon
receiving this request, Infini notified Wells Fargo of Ms.
Willis's hospitalization and her husband's request
for medical records. (Doc. 25 Counterclaim ¶ 20-21). By
September 17, 2014, Ms. Willis retained an attorney, John
Brewer. Mr. Brewer requested Ms. Willis's medical records
from Infini. (Doc. 1 ¶ 18; Doc. 25 ¶ 9). Again,
Infini notified Wells Fargo of the request. (Doc. 1 ¶
19; Doc. 25 ¶ 9).
the same time, Infini applied for medical malpractice
insurance for the upcoming year. Wells Fargo submitted an
application to NF&M on behalf of Infini on September 17,
2014. Infini did not provide any information about Ms.
Willis's injury on the application. (Doc. 1 ¶¶
35-40; Doc. 25 ¶¶ 10-11). On October 1, 2014,
Infini and Dr. Hall submitted an insurance renewal
application to Lexington. The Lexington application asked:
“Are you aware of any circumstance, accident or loss
which has occurred after the retroactive date, which may
result in a claim under this insurance coverage that has not
been reported to your current or prior insurer?” Dr.
Hall answered this question by noting that a lawyer had
requested medical records, presumably in reference to Ms.
Willis's case. (Doc. 1 ¶¶ 22-23; Doc. 25 ¶
9). Infini ultimately decided to renew the insurance policy
with Lexington, and thus did not sign a contract with
NF&M. (Doc. 1 ¶ 24; Doc. 25 ¶ 9).
January 29, 2015, Mr. Brewer sent a letter to Infini asking
for Infini's insurance information. Infini informed Wells
Fargo and Lexington of the request. (Doc. 1 ¶¶
29-31; Doc. 25 ¶ 9). By May 19, 2015, however, Lexington
informed Infini that the new insurance policy did not cover
injuries caused by liposuction procedures. Therefore, they
would not defend any claim brought by Ms. Willis. (Doc. 1
¶ 33; Doc. 25 ¶ 9). Since liposuctions are a
significant part of Dr. Hall's practice, he sought a new
insurance policy that would cover these procedures. Infini
again applied for insurance from NF&M. This application
asked: “[H]ave you or anyone from your practice
received a written request from an attorney for treatment
records concerning any of your current or former patients
that might reasonably result in a claim or suit against
you?” Dr. Hall noted that Ms. Willis's attorney had
requested records but that no suit had yet been filed. He
also noted that this matter had been reported to his current
insurer. (Doc. 25 Counterclaim ¶ 42).
issued a policy on June 2, 2015 to cover the policy period of
May 29, 2015 to May 29, 2016. (Doc. 1 ¶ 44; Doc. 25
¶ 15). Under the policy, NF&M covers a loss
resulting from “a claim that was first made against the
insured facility, or its agent, during the policy
period.” (Doc. 1 ¶ 46; Doc. 1 Ex. 1 page 7).
NF&M also covers a loss resulting from “a potential
claim that was first discovered by the insured facility, or
its agent, during the policy period.” (Doc. 1 ¶
46; Doc. 1 Ex. 1 page 7). The policy specifically
excludes coverage, however, of “[a]ny potential claim
that was first discovered by any authorized insured prior to
the policy period” (the “prior acts policy
exclusion”). (Doc. 1 ¶ 49; Doc. 1 Ex. 1 page 8).
The policy defined a “claim” as “an
express, written demand served upon an Insured for money or
services as compensation for civil damages.” (Doc. 1
¶ 47; Doc. 1 Ex. 1 page 46). A “potential
claim” is “an event the Insured knows or
reasonably should know is likely to result in a claim.”
(Doc. 1 ¶ 48; Doc. 1 Ex. 1 page 48).
Willis filed her lawsuit on January 7, 2016. (Doc. 25
Counterclaim ¶ 44). NF&M agreed to defend Dr. Hall
under a reservation of rights. (Doc. 25 Counterclaim ¶
46). On August 2, 2016, NF&M revised its reservation of
rights and notified Infini that the claim might not be
covered due to the policy exclusion relating to discovery of
potential claims prior to the policy period. (Doc. 25
Counterclaim ¶ 53). NF&M brings this suit seeking a
declaratory judgment that it is not responsible for covering
Ms. Willis's claim against Dr. Hall and Infini. Infini
countersued, seeking a declaration that NF&M must cover
Ms. Willis's claim and alleging that NF&M was
negligent in its dealings with Infini.
motion for judgment on the pleadings pursuant to Federal Rule
of Civil Procedure 12(c) is “properly granted when,
taking all allegations in the pleading as true, the moving
party is entitled to judgment as a matter of law.”
Merchants Home Delivery Serv., Inc. v. Frank B. Hall
& Co., 50 F.3d 1486, 1488 (9th Cir.
1995); Fajardo v. Cty. Of L.A., 179 F.3d 698, 699
(9th Cir. 1999). The moving party must
“clearly establish[ ] on the face of the pleadings that
no material issue of fact remains to be resolved.”
Hal Roach Studios, Inc. v. Richard Feiner & Co.,
Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). A motion for
judgment on the pleadings is “functionally
identical” to a Rule 12(b)(6) motion, and so the same
standard of review is used in both. Cafasso ex rel. v.
General Dynamics C4 Systems, Inc., 637, F.3d 1047, 1054
n. 4 (9th Cir. 2011) (quoting Dworkin v. Hustler
Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989)).
The court generally may not consider matters outside the
pleadings without converting the motion into a motion for
summary judgment. Fed.R.Civ.P. 12(d). However, the court may
“consider documents on which the complaint
necessar[ily] relies.” Rosa v. Cutter Pontiac Buick
GMC of Waipahu, Inc., 120 Fed.Appx. 76, 77 (9th Cir.
2005) (finding that a sales contract and its addendum were
documents upon which the complaint necessarily relied).
parties dispute whether Ms. Willis's claim against Infini
falls into NF&M's prior acts policy exclusion. The
facts Infini claims are in dispute are actually disagreements
over the legal significance of facts that are not in dispute.
The parties have included the relevant language from the
insurance policy in their complaints, but the Court is also
permitted to consider the insurance policy itself as the
complaint necessarily relies on it.
The Insurance Policy's ...