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Sheinbaum v. American Casualty Co. of Reading

October 1, 2010

INGER F. SHEINBAUM, PLAINTIFF/COUNTER-DEFENDANT,
v.
AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, DEFENDANT/COUNTER-PLAINTIFF, AND CNA FINANCIAL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiff Inger F. Sheinbaum ("Sheinbaum") filed this action in the Superior Court of the District of Columbia against Defendants American Casualty Company of Reading, Pennsylvania ("American Casualty") and CNA Financial Corporation ("CNA Financial") (collectively, "Defendants") seeking a declaratory judgment that Defendants have a duty to defend her in a civil action filed against her in Superior Court (the "Feld Action") pursuant to an insurance policy issued to Sheinbaum by American Casualty. The case was removed to this Court on February 11, 2009. American Casualty then filed a counterclaim against Sheinbaum seeking a declaratory judgment that the insurance policy is void ab initio based on Sheinbaum's alleged material misrepresentation that she is a registered nurse or, alternatively, that the policy does not provide coverage for the Feld Action and therefore there is no duty to defend or indemnify Sheinbaum. Presently pending before the Court is Defendants' [17] Motion for Summary Judgment, to which Sheinbaum has filed an opposition and Defendants have filed a reply. The Court has considered the parties' briefs, the accompanying exhibits, and the relevant legal authorities. For the reasons explained below, the Court shall grant Defendants' motion for summary judgment with respect to the issue of policy coverage but shall deny Defendants' motion with respect to the alleged material misrepresentation.

I. BACKGROUND

Plaintiff Inger F. Sheinbaum is a professionally trained nurse who was educated and certified as a registered nurse in Denmark in 1972. See Pl.'s Opp'n, Exs. 1 (Authorization as Registered Nurse), 2 (Dep. of Inger Sheinbaum) at 15-17. According to her Danish certificate, Sheinbaum is "authorized to describe herself as a registered nurse and to practice as such with the conscientious observance of the duties incumbent upon a registered nurse." See Pl.'s Opp'n, Ex. 1 (Authorization as Registered Nurse). After receiving her education, Sheinbaum practiced as a nurse internationally, including work for the United States government at the U.S. Mission to the United Nations in Geneva, Switzerland, and the U.S. Embassy in Colombo, Sri Lanka. See Pl.'s Opp'n, Ex. 2 (Dep. of Inger Sheinbaum) at 37-39. Sheinbaum moved to the United States permanently in 1991. Id. at 85-86. Sheinbaum has provided, and continues to provide, registered nursing services for an organization called SOS International on medevac trips to and from Scandinavia. See id. at 42-48. Because Sheinbaum is not licensed as a registered nurse in the United States, she has never provided nursing services in the United States. Id. at 54-55. However, Sheinbaum has provided services as an "overnight companion" to patients recovering from a recent medical procedure such as surgery. According to Sheinbaum, she does not perform any nursing-related functions when she serves as an overnight companion. Id. at 52.*fn1

A. Sheinbaum's Application for an Insurance Policy

In 2004, Sheinbaum applied for a nurses professional liability insurance policy from American Casualty. See Defs.' Stmt.*fn2 ¶ 40. Question 1 on the application asked Sheinbaum to check one of four boxes to indicate whether she was an "RN," "LPN/LVN," "Nurse's Aide," or "Home Health Aide." Id. ¶ 42. Sheinbaum checked the "RN" box to indicate that she was a registered nurse. Id. ¶ 43. Sheinbaum also stated on the application that she is a resident of Virginia. Id. ¶ 46. In the application, Sheinbaum signed the following affirmation: "I have answered these questions to the best of my knowledge. I have not withheld information that would influence the judgment of the Insurance Company." Id. ¶ 47.

B. The Terms of the Policy Issued to Sheinbaum

American Casualty issued Nurse's Professional Liability Insurance Policy No. HPG 0273225116 (the "Policy") to Sheinbaum, providing her coverage as a registered nurse effective January 1, 2004. Defs.' Stmt. ¶ 1. The Policy was renewed for each successive policy year through at least 2008. Id. ¶ 3. The Policy includes a Professional Liability Coverage Part and a Workplace Liability Coverage Part. Id. ¶ 4. The Professional Liability Coverage Part of the Policy provides, in pertinent part, coverage for "professional liability claims arising out of a medical incident by you or by someone for whose professional services you are legally responsible." Id. ¶ 5. A "medial incident" is defined as "any act, error or omission in your providing professional services which results in injury or damage." Id. "Professional services" are defined "those services for which you are licensed, certified, accredited, trained or qualified to perform within the scope of practice recognized by the regulatory agency responsible for maintaining the standards of the profession(s) shown on the certificate of insurance and which you perform as or on behalf of, the named insured." Id. ¶ 6. The profession shown on Sheinbaum's certificate of insurance is "Registered Nurse." Id. ¶ 7. The Professional Liability Coverage Part excludes coverage for any claim based on, arising out of, or related to "liability resulting from professional services you provide while your license or certification to practice is suspended, revoked, or no longer valid" ("Exclusion J"). Defs.' Stmt. ¶ 8. It also excludes coverage for claims based on, arising out of, or related to "any liability you have for a business or profession, including consulting services, other than that named on the certificate of insurance." Id. ¶ 9.

The Coverage Agreement of the Workplace Liability Coverage Part provides, in pertinent part:

Subject to paragraph B below, we will pay all amounts, up to the Workplace Liability limit of liability stated on the certificate of insurance, which you become legally obligated to pay . . . as a result of injury or damage to which this coverage part applies . . . . The injury or damage must be caused by an occurrence that happens at the workplace during the policy period.

Defs.' Stmt. ¶ 13. The Policy defines "workplace" as "any location used by you to provide professional services." Id. ¶ 14. It defines an "occurrence" as "an accident, including continuous or repeated exposure to conditions, which results in injury or damage." Id. ¶ 15. The Workplace Liability Coverage Part excludes coverage for claims based on, arising out of, or related to "injury or damage resulting from any professional services, placement services, or personal injury." Id. ¶ 16. It also excludes coverage for claims based on, arising out of, or related to "any liability you have for a business or profession . . . other than that named on the certificate of insurance," i.e., registered nurse. Id. ¶ 17.

C. The Feld Action

On March 8, 2008, Karen Feld filed a lawsuit against Sheinbaum, styled Karen Feld v. Inger F. Sheinbaum, Case No. 2008 CA 002002 B, in the Superior Court of the District of Columbia (the "Feld Action"). Defs.' Stmt. ¶ 18. In her complaint, Ms. Feld alleges that she is sixty years old and recently had a craniotomy to remove a brain tumor. Id. ¶ 19. Ms. Feld further alleges that, prior to her surgery, her doctors advised her to hire an experienced registered nurse to provide her with full-time care during her hospitalization and subsequent convalescence. Id. Ms. Feld alleges that in the fall of 2007, prior to her craniotomy, she hired Sheinbaum to provide the nursing care recommended by her doctors and that Sheinbaum represented to her that she was an experienced registered nurse. Id. Ms. Feld alleges that Sheinbaum's performance "failed to meet every relevant standard of care, and caused [Ms. Feld] continuing harm." Id. ¶ 20. She claims that Sheinbaum failed to perform the duties for which she was hired and that she breached her agreement to serve as Ms. Feld's nurse. Id. Ms. Feld alleges that she relied on Sheinbaum's representations that she was a licensed registered nurse and that these representations were false. Id. ¶ 21.

On September 5, 2008, Ms. Feld filed an amended complaint, in which she asserts nine causes of action against Sheinbaum: (1) return of property; (2) breach of contract; (3) fraud in the inducement; (4) fraudulent misrepresentation; (5) negligence; (6) gross negligence; (7) fraud; (8) punitive damages; and (9) violation of the D.C. Consumer Protection Procedures Act. Id. ¶ 27. In her answer to the amended complaint, Sheinbaum admitted that she is not a licensed, registered nurse in any jurisdiction in the United States. Id. ¶ 30.

On March 14, 2008, Sheinbaum's counsel wrote to American Casualty regarding the Feld Action. Id. ΒΆ 28. American Casualty contends that it was not until after Sheinbaum was sued that it realized that Sheinbaum was not licensed ...


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