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GLACIER GEN. ASSUR. CO. v. CONTINENTAL CAS. CO.

March 19, 1985

GLACIER GENERAL ASSURANCE COMPANY, Plaintiff
v.
CONTINENTAL CASUALTY CO., Defendant



The opinion of the court was delivered by: HOGAN

 At issue before the Court on cross-motions for summary judgment is a dispute between two insurance carriers over which of the two companies shall ultimately bear the expense of the settlement of a malpractice claim against a podiatrist, Dr. Love, who was insured by the two companies during consecutive time periods. Counsel have done an excellent job of briefing and arguing the case, and the Court has reviewed the extensive filings and underlying documentation including the depositions of the parties' expert witnesses. A detailed examination of the factual setting of this case is not necessary, but, briefly stated, the undisputed facts are as follows.

 Dr. Love, a licensed podiatrist, was insured under a professional liability policy issued by plaintiff Glacier General Assurance Company (Glacier) from April 1, 1977 to March 31, 1981. Dr. Love's professional liability insurance policy from March 31, 1981 to March 31, 1982 was issued by the defendant, Continental Casualty Company (Continental).

 Phillip Cephas, a patient of Dr. Love from June 1979 until July 1981, had his legs amputated on September 29, 1981 and July 30, 1982 allegedly as a result of Dr. Love's professional errors or neglect. Mr. Cephas filed a malpractice suit against Dr. Love in this Court and the parties to the present action jointly undertook the defense of Dr. Love until such time as the issue of responsibility for coverage could be determined. On April 6, 1983, Mr. Cephas released his claims against Dr. Love for the sum of $500,000, which was provided by equal contributions from each carrier. The present lawsuit was subsequently filed in which both parties seek to recover their one-half contribution to the defense and settlement of Mr. Cephas' claim.

 At the outset, it is obvious that Mr. Cephas was treated by Dr. Love during the coverage period of both companies. It is equally obvious that Mr. Cephas suffered the injury (the amputation of his right leg) during the Continental coverage period. However, the test for coverage is not so simple. In order to determine which of the two carriers is liable, the Court must first turn to the language of the policies in question. The insurance policy issued by Glacier provides, in pertinent part, that Glacier would pay

 
. . . all sums of money which . . . [Dr. Love] shall become legally obligated to pay as damages . . . for bodily injury . . . suffered by any person during the policy period, arising as the result of the professional services rendered or which should have been rendered by . . . [Dr. Love].

 The policy issued by Continental to Dr. Love provides, in pertinent part, that Continental was obligated to pay

 
. . . all sums which . . . [Dr. Love] shall become legally obligated to pay as damages because of injury . . . caused by medical incident which occurs during the policy period, in the practice of . . . [Dr. Love's] profession.

 The policies are similar, not only in coverage, but in premiums and limits, but they are not identical. The Glacier policy is triggered by "damages . . . for bodily injury . . . suffered by any person during the policy period. . . ." Continental is triggered not by injury but by "medical incident [resulting in injury] which occurs during the policy period."

 According to the expert testimony, Mr. Cephas' ultimate physical injury -- the amputation of his legs -- was the result of progressive vascular disease. In the course of oral argument, both counsel conceded that the negligence of Dr. Love -- insofar as his failure to properly diagnose constituted negligence -- continued throughout the period of treatment. They would also agree that an earlier diagnosis of vascular disease might have prevented the amputation from becoming necessary. *fn1"

 The parties do not agree however as to the legal significance of these facts.

 Defendant Continental has argued that Dr. Love should have made his diagnosis during the Glacier coverage period because the disease was "obvious" as early as the summer of 1979 and that by January of 1981 there were "numerous classic symptoms" of progressive vascular disease. The defendant further suggests *fn2" that by early May, 1981, the disease had sufficiently progressed so that amputation was "inevitable." *fn3" The defendant argues that prior to March 31, 1981, there was a "substantial possibility of a better result for Mr. Cephas which was destroyed by the continuing negligent failure to diagnose. . . ." Thus, according to Continental, Mr. Cephas suffered bodily injury during the Glacier coverage period when Dr. Love's negligent failure to diagnose "allowed his vascular disease to progress unnoticed to a critical point."

 Plaintiff, unsurprisingly, sees the facts in a different light. Plaintiff agrees that the disease in question was progressive and that there was a "negligent exposure" to the disease over a period of time. However, according to Glacier, "Dr. Love could not have discerned the underlying illness . . . any more than two or three months . . . prior to the culmination of the disease in July." Although plaintiff admits that "[one] could find that the injury to Mr. Cephas was continuing in nature and occurred during both policy periods," Glacier suggests that it would be more appropriate to focus on the period when the disease was "obvious" yet undiagnosed -- from May to July, 1981 -- and when the continuing negligence culminated in the injury-producing "medical incident" of amputation. In other words, Glacier places the operative events solely within the Continental coverage period.

 Both parties would no doubt agree that it would be difficult if not impossible to fix a point in time when the "injury" to Mr. Cephas occurred. In fact, for purposes of accuracy, one would want to draw two lines: the first at the point when the non-diagnosis became "negligent" and began the chain of causation that led to the operation, and the second at the point where amputation became inevitable. It was during this time period that the "medical incident" (Continental's triggering term) of negligent ...


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