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Patty v. Missouri Professionals Mutual Physicians Professional Indemnity Association

Court of Appeals of Missouri, Eastern District, First Division

April 23, 2019

JOHN PATTY, D.O., LLC, Plaintiff,
v.
MISSOURI PROFESSIONALS MUTUAL PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION, Defendant/Respondent. and TRACY RENEE ALLBRITTON, et al., Plaintiffs/Appellants,

          Appeal from the Circuit Court of St. Louis County Honorable Maura B. McShane

          OPINION

          ANGEL T. QUIGLESS, J

         Tracy Renee Allbritton ("Mother"), by and through her Guardian Letitia R. Rice, and Liam Graham ("Child"), by and through his co-Guardians Letitia R. Rice and Steven M. Allbritton (collectively "Appellants"), appeal from the judgment of the trial court granting summary judgment against Appellants and in favor of Missouri Professionals Mutual-Physicians Professional Indemnity Association ("MPM-PPIA") on Appellants' petition for a declaratory judgment. Appellants assert nine points on appeal, arguing the trial court erred in granting MPM-PPIA's motion for summary judgment and in denying Appellants' motion for summary judgment. We reverse the judgment in favor of MPM-PPIA, and enter judgment in favor of Appellants pursuant to Missouri Supreme Court Rule 84.14.[1]

         Factual and Procedural Background

         This case involves a dispute regarding the interpretation of the liability limit clause ("Liability Limit") of a medical malpractice insurance policy (the "Policy"). The policy was issued by MPM-PPIA and insures John Patty, D.O. ("Doctor") for the medical malpractice claims filed by Appellants. Appellants' underlying claims against Doctor were resolved pursuant to a confidential settlement agreement between the parties (the "Settlement Agreement").[2] The Settlement Agreement disposed of all issues regarding MPM-PPIA's duty to indemnify Doctor and Doctor's liability to Appellants. The parties agree that, "[f]or purposes of this proceeding, it is essentially assumed that a jury concluded that [Doctor] was negligent." The only issue left unresolved in the Settlement Agreement was the maximum amount of professional liability insurance available to Doctor under the terms of the Policy, which would be determined by the court in this declaratory judgment action.

         The sole issue in this case is whether, as a matter of law, Appellants' claims of negligence against Doctor are subject to one Liability Limit or two under the terms of the Policy. The only "facts" relevant to this determination are the language of the Policy and the content of Appellants' allegations of negligence asserted in their petitions.

         A. Appellants' Allegations of Negligence against Doctor

         Appellants each filed claims of medical malpractice against Doctor, alleging the following facts. Doctor is a physician specializing in obstetrics, including prenatal care, delivery, post-delivery care, and complications associated with pregnancy and delivery. Mother was Doctor's patient while she was pregnant with Child. During the third trimester, Mother began to have preterm contractions and abdominal pain. Doctor admitted Mother to the hospital, where he treated Mother and monitored Child's health. After four days in the hospital, Doctor discharged Mother. At the time she was discharged from the hospital, Mother still had ongoing symptoms and problems.

         Doctor saw Mother in his office for a follow-up appointment the next day. The day after that, Mother returned to Doctor's office again because her symptoms were not improving. Following that appointment, Doctor did not give Mother any instructions to return. Three days later, Mother returned to Doctor's office with worsening symptoms. Doctor attempted to check Mother's blood pressure, but was unable to detect it. Doctor also monitored Child, who was not moving and had a heartrate that was low and falling.

         Doctor concluded Child was in severe fetal distress and decided to perform an emergency cesarean section to save Child's life. Doctor performed the surgery in his office, where he did not have access to the medication, anesthesia, equipment, or personnel typically used when performing a cesarean section delivery. When Child was delivered, he was minimally responsive and had depressed respiratory and heart function. Doctor did not have the proper equipment to resuscitate Child, but Doctor attempted to do so until a pediatrician arrived. Following the delivery, both Child and Mother were transferred to the local hospital in critical condition.

         As a result of complications from the caesarian section, Mother and Child sustained significant injuries and have permanent mental and physical disabilities. Mother has returned to the hospital repeatedly due to complications and for additional operations. Mother is now permanently disabled, physically incapacitated, and will never be able to live independently again. She will require professional and supportive care and treatment for the remainder of her life. Child suffered significant, permanent, and irreversible brain and organ damage as a result of being deprived of oxygen and blood for a prolonged period of time. Child is now permanently disabled, physically incapacitated, and will require professional care and treatment for the remainder of his life.

         Mother's petition contained numerous specific allegations regarding negligent acts and omissions committed by Doctor in treating Mother during the pregnancy, during the cesarean section, and following the delivery. Similarly, Child's petition contained numerous specific allegations regarding negligent acts and omissions committed by Doctor in treating Child during the pregnancy, during the cesarean section, and following the delivery.[3]

         B. Declaratory Judgment Action

         While Appellants' claims against Doctor were pending, Doctor filed a declaratory judgment action against MPM-PPIA and Appellants, asking the court to determine how the terms of the Policy applied to Appellants' claims. The Policy provided coverage for all claims of medical malpractice asserted against Doctor during the term of the Policy, subject to a Liability Limit of $1, 000, 000 per "Medical Occurrence." [4] Doctor asserted Appellants' claims constituted separate "Medical Occurrences" and were, therefore, subject to two Liability Limits under the terms of the Policy. MPM-PPIA contended Appellants' claims were subject to a single Liability Limit because their claims arose from the same "Medical Occurrence."

         C. Settlement Agreement

         While Doctor's declaratory judgment action was pending, Appellants, Doctor, and MPM-PPIA settled Appellants' claims against Doctor. Pursuant to the Settlement Agreement, MPM-PPIA agreed that the Policy covers the claims asserted by Mother and Child and conceded its indemnity obligation to Doctor for Appellants' claims. Appellants agreed to release and discharge their claims against Doctor in exchange for MPM-PPIA's agreement to pay the "maximum limit of the professional liability coverage provided to [Doctor] under and by [the] Policy[.]"

         However, the Settlement Agreement did not resolve the question of whether the "maximum limit of professional liability" applicable to Appellants' claims was one Liability Limit or two. Instead, the Settlement Agreement made the actual amount of MPM-PPIA's liability contingent upon the outcome of Doctor's declaratory judgment action. MPM-PPIA agreed to pay Appellants a single Liability Limit upon execution of the Settlement Agreement, and an additional Liability Limit if the court in the declaratory judgment action determined Appellants' claims were subject to two Liability Limits.

         D. Cross-Motions for Summary Judgment

         Following the Settlement Agreement, the parties in the declaratory judgment proceeding were redesignated, with Appellants becoming plaintiffs together with Doctor, against MPM-PPIA as the sole defendant. Appellants and MPM-PPIA then filed cross-motions for summary judgment. Appellants' motion argued they were entitled to judgment as a matter of law because undisputed facts in the record demonstrated the Policy provided for two separate Liability Limits, in that Doctor's negligent treatment of Mother was a separate "Medical Occurrence" from Doctor's medical treatment of Child. Conversely, MPM-PPIA's motion argued it was entitled to judgment as a matter of law because undisputed facts in the record demonstrated all claims asserted by Mother and Child were subject to a single Liability Limit in that they arose from a single "Medical Occurrence" and all treatment provided by Doctor was part of the same "course of treatment."

         Following a hearing, the trial court denied Appellants' motion for summary judgment and granted MPM-PPIA's motion for summary judgment. In its judgment, the trial court concluded Appellants' claims were subject to a single Liability Limit because their claims arose from the same "Medical Occurrence." In interpreting the terms of the Policy, the court stated "[t]he term 'medical occurrence' also included all complaints that arise during a course of treatment." Based on this definition of "Medical Occurrence," the court found Appellants' claims were subject to a single Liability Limit because:

A review of [Appellant]'s petitions shows that they both contain a series of allegations against [Doctor] claiming that he was negligent for acts and omissions during his furnishing services to and in the course of treatment of [Mother]. Conversely, there are no allegations in either Petition of any negligent act or omission in connection with any furnishing of services and/or in any course of treatment of [Child] by [Doctor].

         This appeal follows.

         Points on Appeal

         Appellants' assert nine points on appeal, each arguing the trial court erred in granting MPM-PPIA's motion for summary judgment and Denying Appellants' motion for summary judgment.

         In Point I, Appellants argue the trial court erred in interpreting the Policy because the definition of "Medical Occurrence" in Section X and the phrase "all complaints arising during a course of treatment" in Section VII are reasonably read to provide two Liability Limits.

         In Point II, Appellants argue the trial court erred in interpreting the Policy because the Policy is a "claims made" policy and, unlike other provisions of the Policy, the Liability Limit applicable to ...


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