A medical negligence insurance company’s refusal to provide coverage and defend an emergency physicians’ group resulted in the Missouri Court of Appeals upholding a $2 million equitable garnishment judgment against the company.
In 2003, our client developed profuse sweating and nausea while walking on the Plaza. She presented to the emergency department at St. Luke’s Hospital with a chief complaint of chest pain, which was related to a heart attack. Unfortunately, treatment was delayed because of an emergency physician’s failure to recognize signs and symptoms of the heart attack.
Soon after discharge, the emergency physician reported the error to the medical director of his group. The director of the group sent an email to Intermed Insurance Company reporting approximately 100 occurrences that he felt might later turn into a claim. Within that list it stated our client’s name, date of care, and “missed acute MI.” This email was sent the week before the Intermed policy was set to expire and was intended to protect coverage for any of the listed incidents, because the physicians’ group was taking its business to a different carrier.
The Intermed policy was a “claims-made” policy meaning that it covered only claims made during the policy period, regardless of when the incidents occurred. Pursuant to the policy, coverage was provided if, during the policy period, a claim was made against the insured arising out of professional services and was reported to the company. But the policy included an “awareness” provision, which broadened the event triggering coverage beyond a literal demand for money. An awareness provision allows an insured to report an incident despite the fact no formal claim has been made. Then, if a claim arises from the incident, it is deemed made at the time the incident was reported.
Intermed refused to open files on the approximately 100 occurrences on the rationale that the information provided was not sufficient.
When our client filed suit in 2004, Intermed refused to provide a defense or coverage, arguing that the inclusion of a few sparse details about the care did not constitute a “claim” or “incident” under the policy. This presented a significant problem to both the client’s family and the defendants, because the insurance policy that began in early 2004 had significantly lower limits of liability than the Intermed policy. As a result, a Missouri “§ 537.060 agreement” was reached whereby the defendants agreed to allow a $2 million judgment. The client would then try to recover that amount in an equitable garnishment action against Intermed.
Matt Birch pursued the equitable garnishment action in Jackson County. In addition to extensive document discovery, numerous depositions were taken of claims and underwriting personnel at Intermed, which deposed every physician practicing in the emergency group who had a patient included on “the List.”
Following discovery and competing summary judgment motions, the Court granted our motion for summary judgment, holding that the notice supplied by the group before the expiration of the policy triggered coverage. Intermed appealed. The Missouri Court of Appeals for the Western District affirmed the trial court’s ruling in Landry v. Intermed Insurance Co., 292 S.W.3d 352 (Mo. Ct. App. 2009). With interest on the initial $2 million judgment, the final judgment collected from Intermed totaled $2,714,418.74. Intermed made no offer to settle the case prior to judgment, and there were no negotiations.
