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Hayes v. Chartered Health Plan

October 17, 2006

JOHN M. HAYES, M.D., PLAINTIFF,
v.
CHARTERED HEALTH PLAN D/B/A CHARTERED FAMILY HEALTH CENTER, P.C., ET AL., DEFENDANTS.
D.C. CHARTERED HEALTH PLAN, INC. AND ROBERT L. BOWLES, JR., THIRD-PARTY PLAINTIFFS,
v.
DRS. GREENFIELD, BOOKER, CHARTERED AND THE NATIONAL CAPITAL RECIPROCAL INSURANCE COMPANY, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM OPINION AND ORDER

Before the court are the motions to dismiss of defendants Aon Risk Services, Inc. ("Aon") [#66], third-party defendant National Capital Reciprocal Insurance Company ("NCRIC") [#79], and third-party defendant Drs. Greenfield, Booker, Chartered ("Greenfield, Booker") [#80]. Upon consideration of the motions, the oppositions thereto, and the record of the case, the court concludes that the motions must be granted.

I. BACKGROUND

Plaintiff John M. Hayes, M.D., seeks declaratory relief and damages for contract, tort, and equitable claims arising from alleged failures on the part of the defendants to obtain, provide, and/or maintain insurance coverage for medical malpractice. In particular, he seeks relief relating to a malpractice claim filed against him in 1999 by Artulia Smith in the Superior Court for the District of Columbia, which claims arose from events occurring in 1992. As to the parties whose motions are before the court, Hayes sets forth a series of claims:

Hayes brings claims against Aon of fraud, misrepresentation and deceit (Count IV); intentional infliction of emotional distress (Count V); negligence (Count VI); "vicarious liability and apparent or ostensible agency" (Count VII); "agent/broker liability" (Count VIII), and negligent infliction of emotional distress (Count IX). These claims arise from allegations that Aon, an insurance broker, obtained malpractice insurance in 1998 for defendant Chartered Health Plan d/b/a/ Chartered Family Health Center, P.C. ("Chartered Health"), which insurance covered Hayes, a Chartered employee. Compl. ¶ 27. That coverage, underwritten by defendant Reliance National Insurance Company ("Reliance"), was replaced in 1999 by a separate policy, underwritten by Western Indemnity Insurance Company ("Western") and brokered by Health Insurance Services, Inc. ("HIS"). Id. ¶ 29. Hayes alleges that Aon both failed to secure adequate coverage for him, despite a duty to do so, and represented that it had obtained coverage for malpractice risks predating his employment with Chartered Health with actual knowledge that it had not obtained such coverage. Id. ¶¶ 62(f), 75, 89, 103, 120.

Hayes also brings claims against defendants/third-party plaintiffs Chartered Health and Robert L. Bowles, Jr. of breach of contract (Count II); breach of fiduciary duty (Count III); fraud, misrepresentation and deceit (Count IV); and negligence (Count VI). Chartered Health and Bowles (collectively "Chartered"), in turn, bring third-party claims against third-party defendants NCRIC and Greenfield, Booker for indemnity (Count I) and contribution (Count II).

II. ANALYSIS

The court will first address Aon's motion to dismiss, and then will collectively consider the third-party defendants' motions.

A. Claims against Aon

1. Counts V, VII, and IX

The court previously dismissed Hayes's claims of intentional infliction of emotional distress (Count V); "vicarious liability and apparent or ostensible agency" (Count VII); and negligent infliction of emotional distress (Count IX) as against a number of defendants. Mem. Op. (March 11, 2004). For the reasons articulated in the court's order dismissing those claims, they are likewise dismissed as to Aon.

2. Fraud (Count IV)

To state a claim for fraud under District of Columbia law, Hayes must allege with particularity 1) a false representation by Aon; 2) concerning a material fact; 3) made with knowledge of its falsity; 4) with intent to deceive; and 5) resulting in detrimental reliance by the plaintiff. See Sabin v. Regardie, Regardie & Bartow, 770 F. Supp. 5, 8 (D.D.C. 1991) (citing Barlow v. McLeod, 666 F. Supp. 222, 228 (D.D.C. 1986)); Bennett v. Kiggins, 377 A.2d 57, 59 (D.C. 1977). Aon argues that Hayes has failed to plead his fraud claim against Aon with the required particularity, and that, in any case, Hayes's fraud claim should be dismissed with prejudice because the claims-made policy brokered by Aon expired before the Smith claim was filed, therefore making it impossible for Hayes to have suffered any injury as a result of any misrepresentation by Aon. Def. Aon's Mem. in Supp. at 7--10. The court agrees on both counts.

A pleader must "state the time, place, and content of the false misrepresentations, the fact misrepresented and what was retained or given up as a consequence of the fraud." United States v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251, 1256 (D.C. Cir. 2004) (quoting Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1278 (D.C. Cir. 1994)). Additionally, a pleader must "identify individuals allegedly involved in the fraud," ibid. (citations omitted), and if a plaintiff is "unable to meet the particularity standard because ...


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