United States District Court, D. Maryland, Southern Division
J. HAlEL United States District Judge.
Interstate Fire and Casualty Company ("Interstate"
or "IFCC") filed this suit for equitable
contribution and declaratory judgment against Defendant
Dimensions Assurance Ltd. ("Dimensions" or
"DAL") following an insurance dispute. ECF No. 1.
The Court previously granted summary judgment in favor of
Dimensions. ECF No. 43. On appeal, the United States Court of
Appeals for the Fourth Circuit vacated the opinion and
remanded to this Court for further proceedings. Presently
pending before the Court is Interstate's Request for
Entry of Judgment. ECF No. 51. Interstate's alternative
renewed Cross-Motion for Summary Judgment. ECF No. 56. and
Dimensions' Cross-Motion for Summary Judgment, ECF No.
53. The Court held a hearing on July 14. 2017. See
Loc. R. 105.6 (D. Md. 2016). For the following reasons.
Interstate's Request for Entry of Judgment is granted,
and the cross-motions are denied as moot. Judgment is now
entered against Dimensions and in favor of Interstate in the
total amount of $3, 591, 847.28. with post-judgment interest
to accrue at the statutory rate pursuant to 28 UJS.C. $ 1961.
facts of this case were fully set forth in the Court's
previous Opinion. ECF No. 43 at 1-5. In 2012. a patient at Laurel
Regional Hospital (the " Hospital") brought a
medical malpractice action against the Hospital and several
physicians and nurses who worked at the Hospital.
See ECF No. 25-6. One of the nurses named in the
action. Nurse Cryer, was working at the Hospital under a
Staffing Agreement between her employer. Favorite Healthcare
Staffing. Inc. ("FHS" or "the Agency"),
and the Hospital. See Id. at 15. Plaintiff
Interstate provided a professional liability insurance policy
to the Agency, covering doctors and nurses who were employed
by the Agency but placed in various medical centers.
See ECF No. 25-11. The Interstate policy stated that
''[i]f there is other valid insurance (whether
primary, excess, contingent, or self-insurance) which may
apply against a loss or claim covered by this policy, the
insurance provided hereunder shall be deemed excess insurance
over and above the applicable limit of all other insurance or
self-insurance." Id. at 11.
Dimensions provided liability protection to the Hospital
through a reimbursement agreement (the "Policy" or
"Reimbursement Agreement"), which forms the basis
for the dispute in this action. See ECF No. 25-10.
The Dimensions Policy affords coverage for the Hospital and
other persons or entities that meet the Policy's
definition of "protected persons." See Id.
Although sometimes referred to jointly as the Reimbursement
Agreement, the Policy actually consists of three separate
reimbursement agreements delineated as (A) "General
Liability." (B) "Hospital Professional
Liability." and (C) "Group Professional
Liability." See Id. at 2-3. The Hospital
Professional Liability agreement, at issue here, states in
relevant part that "[The Hospital's] present and
former employees, students, and authorized volunteer workers
are protected persons while working or when they did work for
you within the scope of their duties." Id. at
31. Similar to the Interstate policy, the Dimensions Policy
states that "[i]f there are other valid and collectible
sources of payment for injury or damage covered by this
agreement, then this agreement will be excess reimbursement
over any part of any other reimbursement or payment."
but limits the excess function to three specific
circumstances that were not applicable here. Id. at
the underlying medical malpractice action arose. Dimensions
refused to indemnify Nurse Cryer. claiming that, as an
Agency-placed practitioner. Nurse Cryer was not an
"employee" of the Hospital. See ECF No.
32-1 at 9. Interstate thus undertook to defend Nurse Cryer in
the lawsuit, ultimately settling the case for $2.5 million
and incurring $465, 044.96 in defense fees and costs.
See ECF No. 26-1 at 2. Following settlement.
Interstate brought suit against Dimensions for equitable
contribution and declaratory judgment, arguing that Nurse
Cryer should have been covered under the Dimensions Policy as
a "protected person." and Dimensions was therefore
obligated to reimburse Interstate for the full amount
Interstate had paid to litigate and settle the lawsuit. ECF
No. 1 at 10-11.
parties filed cross motions for summary judgment. ECF Nos. 26
and 34. Interstate argued that the Dimensions Policy
unambiguously provided professional liability coverage to
Nurse Cryer as an "employee, " and provided primary
"other insurance." regardless of whether the Policy
was characterized as a reimbursement agreement or otherwise.
ECF No. 26. Dimensions countered that Nurse Cryer was not an
employee of the Hospital as a matter of law. and that the
agreement between the Hospital and Dimensions was not an
insurance policy, but a "reimbursement agreement."
ECF No. 34. Hence. Dimensions claimed that under this
agreement, reimbursement payments were to be made to the
Hospital, and only for expenses incurred or approved by the
Hospital. Id. at 19. Because the Hospital had
declined to defend Nurse Cryer, Dimensions argued, there were
no expenses to be reimbursed. Id. at 22. This Court
granted summary judgment in favor of Dimensions, holding that
the Reimbursement Agreement with the Hospital did not cover
Nurse Cryer, because she was not an employee of the Hospital
as a matter of law. .See ECF No. 43.
appeal, the Fourth Circuit held that the term
"employee" included workers who qualified as
employees under the "right-to-control'" test,
which encompassed Nurse Cryer. ECF No. 51 at 19-20, and
Dimensions therefore had "an independent obligation to
provide coverage to those workers." id at 35.
The Fourth Circuit further found that the Staffing Agreement
between the Hospital and the FHS Agency, to which neither
Interstate. Dimensions, nor Nurse Cryer were parties, did not
control whether Nurse Cryer was covered under the Dimensions
Policy. See id at 21-30. Accordingly, the Fourth
Circuit stated that "[w]hether or not the Hospital
intended to provide insurance for Agency-provided employees.
Dimensions, by virtue of the policy that it issued, has an
independent obligation to insure Cryer as an additional
insured." Id. at 30 (internal citations
omitted). Thus, this Court's summary judgment decision
was vacated, and the case was remanded.
has now tiled a Request for Entry of Judgment, and
alternatively, renews its motion for summary judgment. ECF
Nos. 51 and 56. Dimensions opposes Interstate"s Request
and also renews its motion for summary judgment, arguing that
"[n]either this Court nor the U.S. Court of Appeals for
the Fourth Circuit has addressed the issue of how much, if
any. must be paid to Nurse Cryer or Interstate under the
terms of the Reimbursement Agreement." ECF No. 53 at 1.
Dimensions asserts that they are only obligated to reimburse
the Hospital under the Reimbursement Agreement, and therefore
have no obligation to make any payment since the Hospital
neither authorized nor made a payment regarding the claims
against Nurse Cryer. Id. at 3. The Court disagrees.
mandate rule is the "more powerful version of the law of
the case doctrine." Doe v. Chuo.5W F.3d 461.
465 (4th Cir. 2007) (citing Invention Submission Corp. v.
Dudas. 41 3 F.3d 411. 414 (4th Cir. 2005)). "Few
legal precepts are as firmly established as the doctrine that
the mandate of a higher court is 'controlling as to
matters within its compass."" Id. (quoting
Spragm v. Ticonic Nat'l Bank. 307 U.S. 161. 168
(1939)). The mandate rule "does not simply preclude a
district court from doing what an appellate court has
expressly forbidden it from doing." S. All. Ltd.
P'ship of Tennessee. LP v. Riese. 356 F.3d 576, 584
(4th Cir. 2004). It "compels compliance on remand with
the dictates of a superior court and forecloses relitigation
of issues expressly or impliedly decided by the appellate
court." Volvo Trademark Holding Aktieholaget v.
Clark Mach. Co.. 510 F.3d 474. 481 (4th Cir. 2007). The
Court must, "except in rare circumstances, implement
both the letter and the spirit of the mandate."
considering both the appellate court's opinion and
"the circumstances it embraces." S. All. Ltd. P
'ship. 356 F.3d at 584 (4th Cir. 2004) (internal
citations omitted). "[A] remand proceeding is not the
occasion for raising new arguments or legal theories."
Volvo Trademark. 510 F.3d at 481. The rule also
"forecloses litigation of issues decided by the district
court but foregone on appeal or otherwise waived, for example
because they were not raised in the district court."
United Slates v. Bell. 5 F.3d 64, 66 (4th Cir.
the Fourth Circuit held that "Dimensions, by virtue of
the policy that it issued, has an independent obligation to
ensure [Over] as an additional insured." ECF No. 51 at
30. The Fourth Circuit reasoned that "[b]ecause the
evidence contained in the record establishes that Nurse Cryer
is the Hospital's employee under the right-to-control and
borrowed-servant standards, she is a "protected
person' who qualities for coverage under the professional
liability portion of the Dimensions Policy." ECF No. 51
at 36. On remand, the Court is obligated to implement not
only the letter of the appellate court mandate, but its
spirit as well. See S. All. Ltd. P ship. 356 F.3d at
584. However, because neither this Court nor the Fourth
Circuit has explicitly addressed the argument. Dimensions