United States District Court, D. Maryland
CLAUDIA M. MORA et al., Plaintiffs,
LANCET INDEMNITY RISK RETENTION GROUP, INC., Defendant.
XINIS, UNITED STATES DISTRICT JUDGE
case arises out of the unfortunate death of Juan G. Castillo,
who suffered a fatal heart attack after Dr. Ishtiaq A. Malik
treated Mr. Castillo at Dr. Malik's urgent care clinic in
Silver Spring, Maryland. Mr. Castillo's wife and three
children brought this declaratory judgment action against Dr.
Malik's insurer, Lancet Indemnity Risk Retention Group,
Inc. (“Lancet”), after Lancet disclaimed coverage
in Plaintiffs' underlying medical malpractice action,
citing Dr. Malik's failure to cooperate as sufficient
basis to deny coverage.
Court's prior opinion and order on the parties' cross
motions for summary judgment left one narrow issue for trial:
whether Lancet could demonstrate that Dr. Malik's failure
to cooperate prejudiced Lancet's ability to defend the
underlying medical malpractice claim against Dr. Malik's
entities. The Court held a two-day bench trial on July 18 and
20, 2017. The Court has heard the evidence, reviewed the
exhibits, considered the materials submitted by the parties,
and had the benefit of the arguments of counsel. It now
issues this Decision as its findings of fact and conclusions
of law in compliance with Rule 52(a) of the Federal Rules of
Civil Procedure. It finds the facts as stated in this
opinion based upon evaluating the evidence, drawing all
reasonable inferences, and assessing witness credibility. For
the reasons set forth below, the Court finds that
Plaintiffs/Counterclaim Defendants are entitled to a judgment
declaring that Advanced Walk-In Urgent Care, LLC and Union
Multi-Care Medical Center, Inc. are insured by Lancet under
Policy Number L1201402002735 for the claims asserted against
them in the underlying medical malpractice case brought
before the Circuit Court of Montgomery County, Maryland,
Mora v. Advanced Walk-In Urgent Care, LLC, Case No.
407276-V. The Court also finds that Lancet is thus liable for
the money damages of its Insureds pursuant to the
March 2, 2016, Plaintiffs Claudia Mora, her two minor
children, and her son, Juan Carlos Castillo
(“Plaintiffs”), filed this declaratory judgment
action in the Circuit Court for Montgomery County against
Lancet Indemnity Risk Retention Group, Inc.
(“Lancet”), Advanced Walk-In Urgent Care, LLC,
Union Multi-Care Medical Center, Inc., and Dr. Richard Akoto
in both his individual capacity and as a professional
corporation (collectively, “Dr. Akoto”).
See ECF No. 2. Plaintiffs ask the Court to declare
that Defendant Lancet is required under its group
professional liability insurance policy with Advanced Walk-In
and Union Multi-Care to satisfy the judgment rendered against
its Insureds and in favor of Plaintiffs in a medical
malpractice case decided in the Circuit Court for Montgomery
removed the case to this Court on April 1, 2016 based on
diversity of citizenship pursuant to 28 U.S.C. § 1332
and filed a counterclaim. ECF Nos. 1 & 22. Through its
counterclaim, Lancet asks this Court to declare its insurance
agreement with the Defendants void because one of the
policy's insureds, Dr. Ishtiaq Malik, failed to comply
with the Policy's notice and cooperation provisions. ECF
No. 22 at 15-16. Plaintiffs moved for summary judgment and
Lancet filed a cross-motion for summary judgment.
See ECF Nos. 74 & 76.
March 1, 2017, the Court issued a Memorandum Opinion and
Order denying both motions. See ECF Nos. 85 &
86. It concluded that Lancet could not disclaim coverage
based on the insurance Policy's notice provision as a
matter of law. However, factual disputes prevented the Court
from deciding whether Lancet could disclaim coverage based on
the insurance policy's cooperation provision.
April 1, 2016, Plaintiffs moved to file a second amended
complaint to clarify that the requested relief includes a
monetary judgment up to the Policy limit of $1, 000, 000,
plus post-judgment interest of $118, 722.50. See ECF
No. 93-3 at 9. The Court denied Plaintiffs' motion as
moot on July 10, 2017, after the parties agreed at a
telephonic hearing that Plaintiffs' failure to request
monetary relief in the first amended complaint did not
preclude Plaintiffs from recovering damages in the event that
Plaintiffs prevail on the merits. See ECF No. 107.
The parties therefore agreed to table the discussion of
damages until the Court rendered a judgment on liability.
Therefore, this Memorandum Opinion will only assess
Lancet's liability under the Policy.
FINDINGS OF FACT
Lancet Indemnity Risk Retention Group, Inc.
(“Lancet”) is a risk retention group chartered in
Nevada and organized pursuant to the Liability Risk Retention
Act (“LRRA”), 15 U.S.C. §§ 3901 et
seq. Risk retention groups are different than other
insurance companies because they must be owned by their
insureds and their members are relatively homogeneous. For
example, Lancet only insures medical professionals and is
owned and funded by the physicians in the group. See
Trial Tr., 27, July 18, 2017 (Teter Testimony).
2014, Lancet issued a claims-made-and-reported
policy (“Policy”) to Union Multi-Care
Medical Center, Inc. (“Union Multi-Care”) and
Advanced Walk-In Urgent Care, LLC (“Advanced
Walk-In”), both located in the same office in Silver
Spring, Maryland. See Policy, Def.'s Ex. 1. Dr.
Ishtiaq A. Malik (“Dr. Malik”) owned and operated
both practices. He and his colleague, Dr. Lendicta Q. Madden
(“Dr. Madden”), were named as additional Insureds
in the Policy. See Def.'s Ex. 1 at 12. The
Policy commenced on July 1, 2014 and expired on July 1, 2015.
Id. at 2.
Policy contains a “Cooperation and Assistance”
clause which states, in pertinent part:
The Insured must cooperate and assist the
Company and the appointed defense counsel in all aspects of
the investigation and defense; and shall, upon request,
submit to examination and interrogation by a representative
of the Company, under oath if required, attend hearings,
depositions and trials, assist in effecting any settlement,
securing and giving evidence, and obtaining the attendance of
witnesses, all without charge to the Company.
The Insured shall further cooperate with the
Company to do whatever is necessary to secure and affect any
rights of indemnity, contribution or apportionment that the
Insured may have. Any failure of the
Insured to cooperate that prejudices our
ability to defend any Claim, shall void this
Policy, nullify coverage and will disqualify
the Insured from being eligible to exercise
the option to purchase a Extended Period endorsement.
Def.'s Ex. 1 at 34 (emphasis in original).
Policy also includes an advance consent provision. This
provision operates independently of the notice and
cooperation provision, and states in pertinent part, that
Lancet “ha[s] the right and duty to defend any
Claim covered by the
Policy.” Def.'s Ex. 1 at 15
(emphasis in original).
The Underlying Medical Malpractice Action
January 15, 2015, Juan G. Castillo visited Dr. Malik at
Advanced Walk-In seeking treatment for chest pains.
See Trial Tr., 182-83, July 20, 2017 (Castillo
Testimony). Dr. Malik had not previously treated Mr.
Castillo. Mr. Castillo was not conversant in English, and Dr.
Malik did not speak any Spanish, Mr. Castillo's native
tongue. Under these circumstances, Dr. Malik's practice
was to ask one of Advanced Walk-In's bilingual staff
members to be present at the appointment and translate for
him. See Trial Tr., 77, July 20, 2017 (Madden
Testimony). However, no direct evidence established whether a
bilingual staff member translated for Dr. Malik during the
January 15 appointment with Castillo.
the same appointment, Dr. Malik prepared a short consultation
note explaining his physical assessment of Mr. Castillo, the
diagnostic tests administered, and Dr. Malik's proposed
follow-up care for Mr. Castillo. See Def.'s Ex.
2. The consultation note explains that Castillo complained of
atypical chest pain and shortness of breath a few times a
day. Dr. Malik conducted both a treadmill stress test and an
electrocardiogram (“EKG”). The treadmill stress
test had to be stopped after only three minutes because,
according to the consultation note, Mr. Castillo was
experiencing chest pain. Id. Dr. Malik then
prescribed Mr. Castillo Metoprolol, a common beta blocker
used to treat chest pain, and rendered no further treatment.
Trial Tr., 212, July 18, 2017 (Schwartz Testimony). Eight
days later, Mr. Castillo died from a sudden cardiac event
while at work.
Mr. Castillo's death, his widow, Claudia Mora, and her
children (“Plaintiffs”) prepared to file a
medical malpractice claim against the Union Multi-Care, Dr.
Malik, P.C., and possibly Advanced Walk-In, as well as
Castillo's regular treating cardiologist, Dr. Akoto. On
July 2, 2015, Plaintiffs' counsel notified Lancet in
writing of the impending suit. See Def.'s Ex. 7.
Plaintiffs' counsel also ...