Argued: March 1, 2017
Flaherty Beliveau & Pachios, PLLP, of Concord (William C.
Saturley on the brief), and Hangley Aronchick Segal Pudlin
& Schiller, of Philadelphia, Pennsylvania (Ronald P.
Schiller and Daniel J. Layden on the brief, and Mr. Schiller
orally), for Arch Specialty Insurance Company.
Mallory & Friedman, PLLC, of Concord (Mark L. Mallory on
the brief and orally), for Triage Staffing, Inc.
Sheehan Phinney Bass & Green, PA, of Manchester (James Q.
Shirley and Megan C. Carrier on the brief, and Mr. Shirley
orally), for Exeter Hospital, Inc.
Arch Specialty Insurance Company (Arch) appeals multiple
orders of the Superior Court (McHugh and
Anderson, JJ.), granting summary judgment to
defendants Triage Staffing, Inc. (Triage), Exeter Hospital,
Inc. (Exeter), and American Healthcare Services Association
(AHSA) on their petitions for declaratory judgment, and
denying Arch's cross-motion for summary judgment. The
court ruled that Arch is required to defend and indemnify
Triage, Exeter, and AHSA, pursuant to two insurance policies
that Arch issued to Triage, for claims asserted against the
defendants by patients of Exeter who contracted Hepatitis C
(Exeter Patients). On appeal, Arch argues that the trial
court erred in finding inapplicable certain exclusions found
in the insurance policies and in determining that the claims
involved multiple occurrences under the policies. We affirm
in part, reverse in part, vacate in part, and remand.
light of the arguments raised, it is important to state the
facts and procedure in some detail. The pertinent facts of
this case arise from the conduct of David Kwiatkowski, a
cardiac catheter laboratory technician who was infected with
the Hepatitis C virus. While working at Exeter, Kwiatkowski
diverted opioid drugs to his own use and, after injecting
himself with such drugs, returned the contaminated needles to
the hospital's supply, where they were used in the
treatment of numerous patients, some of whom contracted
Hepatitis C. Exeter is a member of AHSA, a company that
accredits and grades people in the healthcare industry.
Exeter and AHSA contracted with Triage, a staffing company
that places medical personnel in medical facilities across
the country. Pursuant to these contracts, Triage placed
Kwiatkowski at Exeter.
wake of Kwiatkowski's actions, the Exeter Patients sued
Triage, Exeter, and AHSA. Some of those suits have settled,
while others have not. Triage, Exeter, and AHSA each carry
insurance through a different insurance company: Arch
primarily insures Triage; Hanover Insurance Company primarily
insures Exeter; and Massachusetts Bay Insurance Company
(MBIC) primarily insures AHSA. This appeal chiefly concerns
whether and to what extent the policies that Arch issued to
Triage provide coverage to Triage, as a named insured, and to
Exeter and AHSA, as additional insureds.
2008, Triage and AHSA entered into a staffing agreement.
Triage agreed to provide temporary workers to AHSA member
hospitals, such as Exeter, and to screen the qualifications
and competence of those temporary workers. Additionally,
Triage agreed to indemnify AHSA and AHSA member hospitals and
to maintain certain minimum coverage of employers'
liability insurance, professional liability insurance, and
comprehensive general liability insurance.
end, Triage purchased two relevant policies from Arch: one
policy providing coverage from January 1, 2011, to January 1,
2012, and a second policy providing coverage from January 1,
2012, to January 1, 2013. Except for the coverage periods,
the policies are identical. Each policy includes three
different coverage forms: professional liability; general
liability; and umbrella liability, which covers both
professional and general liability.
to the AHSA staffing agreement, Triage placed Kwiatkowski at
Exeter Hospital on April 1, 2011. On or about October 16,
2011, Exeter hired Kwiatkowski, at which point he ceased to
be a Triage employee. Kwiatkowski continued to work for
Exeter until the hospital placed him on administrative leave
on May 21, 2012, and subsequently terminated him on June 29,
his time at Exeter, Kwiatkowski worked in the cardiac
catheterization lab, where patients undergo invasive
procedures. As part of the procedures, patients are often
administered two drugs: fentanyl and versed. In preparation
for a procedure, nurses and physicians remove the drugs from
a secure machine. Kwiatkowski was neither authorized to
access the machine nor authorized to administer the drugs. In
connection with his plea of guilty to federal criminal
charges, Kwiatkowski admitted in federal court that, on
approximately 50 occasions, prior to a medical procedure, he
swapped syringes containing fentanyl for syringes that he had
filled with saline. After injecting himself with fentanyl
from diverted syringes, Kwiatkowski refilled the now
contaminated syringes with saline to cover the diversions.
Because Kwiatkowski was infected with Hepatitis C, these
saline syringes were tainted with the virus. When the Exeter
Patients were subsequently injected with the saline syringes,
some of them became infected.
Exeter Patients sued Triage for Kwiatkowski's actions
based upon the doctrine of respondeat superior, as
well as for its alleged direct negligence in hiring,
employing, training, and supervising him. They sued Exeter
for medical negligence; for negligently hiring, employing,
training, and supervising Kwiatkowski; for negligent or
intentional infliction of emotional distress; and for willful
or knowing violation of the New Hampshire Consumer Protection
Act, RSA chapter 358-A (2009 & Supp. 2016).
initiated the present action in February 2013 when it
petitioned for a declaratory judgment to determine the scope
of coverage available to AHSA under the Arch and MBIC
policies. Triage and Exeter each filed a cross-claim
for declaratory judgment that Arch was required to provide
them a defense and indemnity. Arch filed a counterclaim for
declaratory judgment that MBIC was the primary insurer
responsible for defense and indemnity of AHSA and
cross-claims for declaratory judgment that Arch owed no duty
to defend or indemnify Triage, Exeter, and AHSA. The Exeter
Patients filed a counterclaim for declaratory judgment that
MBIC was obligated to provide coverage to AHSA and a
cross-claim for declaratory judgment that Arch was obligated
to provide coverage to Triage, Exeter, and
the parties filed numerous motions for summary judgment,
motions for partial summary judgment, cross-motions for
summary judgment, objections, and responses, all of which led
to a series of trial court orders. In January 2014, the trial
court issued an order ruling that the Arch policies'
exclusion for "abuse or molestation" did not bar
coverage. In April 2014, the trial court issued two orders.
In the first order, it ruled that the Arch policies'
exclusion for "dishonest, fraudulent, malicious,
uninsurable acts" did not bar coverage based upon
Exeter's conduct, with the ruling subject to
reexamination at the close of discovery. The second order
required Arch to contribute equally with MBIC to Exeter's
past and future defense costs, subject to Arch's right to
seek reimbursement of defense costs at the close of the
moved for reconsideration of the trial court's ruling
that MBIC was required to share Exeter's defense costs
with Arch. In May 2014, the court denied Exeter's motion
and issued an order ruling that: (1) Arch was not judicially
estopped from asserting that coverage under its policies
should be determined under the professional liability
coverage form, not the general liability coverage form; (2)
the underlying acts triggered the Arch policies' general
liability coverage form; (3) the underlying acts constituted
multiple occurrences under the Arch policies; (4) the
underlying acts covered both the 2011 and 2012 Arch policies;
(5) the Arch policies' umbrella coverage form provided
coverage to both Exeter and AHSA; and (6) Arch's policies
and MBIC's policies equally provided primary, rather than
excess, coverage to AHSA.
MBIC, and Arch all filed motions for reconsideration. In June
2014, the trial court: (1) reaffirmed its prior ruling that
neither the Arch policies nor the MBIC policies were in
excess of the other's policies; (2) ruled the Arch
policies' exclusion for "dishonest, fraudulent,
malicious, uninsurable acts" did not bar coverage based
upon Kwiatkowski's conduct; and (3) ruled that the Arch
policies' general liability coverage form exclusion for
"healthcare professional services" did not bar
coverage, with the ruling subject to reexamination at the
close of discovery.
2014, Arch appealed the trial court's coverage rulings to
this court. We dismissed Arch's appeal as an improper
interlocutory appeal because the court's orders did not
finally resolve all issues among all parties.
2016, the trial court issued an order finalizing its grant of
summary judgment against Arch and in favor of Triage, Exeter,
and AHSA in accordance with its prior orders. The court also
ruled that, because Triage, Exeter, and AHSA were the
prevailing parties, they were entitled to their costs and
reasonable attorney's fees from Arch pursuant to RSA
subsequently filed the present appeal. On appeal, Arch
argues that the trial court erred by granting summary
judgment in favor of Triage and Exeter because: (1) three
exclusions barred coverage under the general liability
coverage form; (2) two exclusions barred coverage under the
umbrella coverage form; and (3) the underlying actions
constitute only a single occurrence under the policies.
Additionally, although Exeter did not file a notice of
cross-appeal, it now asks us to consider the issue of
Arch's obligation to contribute to Exeter's defense
reviewing a trial court's rulings on cross-motions for
summary judgment, we "consider the evidence in the light
most favorable to each party in its capacity as the nonmoving
party and, if no genuine issue of material fact exists, we
determine whether the moving party is entitled to judgment as
a matter of law." Conant v. O'Meara, 167
N.H. 644, 648 (2015) (quotation omitted). "If our review
of that evidence discloses no genuine issue of material fact
and if the moving party is entitled to judgment as a matter
of law, then we will affirm the grant of summary
judgment." Id. (quotation omitted). "We
review the trial court's application of the law to the
facts de novo." Id. (quotation
a declaratory judgment action to determine the coverage of an
insurance policy, the burden of proof is always on the
insurer, regardless of which party brings the petition."
Cogswell Farm Condo. Ass'n v. Tower Group, Inc.,
167 N.H. 245, 248 (2015) (quotation omitted); see
RSA 491:22-a (2010). "The interpretation of insurance
policy language is a question of law for this court to
decide." Cogswell Farm, 167 N.H. at 248
(quotation omitted). "We review questions of law de
novo." Id. (quotation omitted). "We
first look to the plain and ordinary meaning of the
policy's words in context, and we construe the terms of
the policy as would a reasonable person in the position of
the insured based on more than a casual reading of the policy
as a whole." Id. (quotation omitted).
"This is an objective standard." Id.
are free to contractually limit the extent of their liability
through use of a policy exclusion, provided it violates no
statutory provision." Progressive N. Ins. Co. v.
Concord Gen. Mut. Ins. Co., 151 N.H. 649, 653 (2005)
(citations omitted). "Such language must be so clear,
however, as to create no ambiguity that might affect the
insured's reasonable expectations." Id.
(quotation omitted). "In determining whether an
ambiguity exists, we look to the claimed ambiguity, consider
it in its appropriate context, and construe the words used
according to their plain, ordinary, and popular
definitions." Id. (quotation omitted).
"Policy terms create an ambiguity when the parties may
reasonably differ about the interpretation of the
language." Id. "Ultimately, we interpret
exclusion language to mean what a reasonable person would
construe it to mean." Id. (quotation omitted).
"The insurer asserting an exclusion of coverage . . .
bears the burden of proving that the exclusion applies."
first argues that the "healthcare professional
services" exclusion in the general liability coverage
form excludes coverage. Arch contends that the exclusion bars
coverage for claims that allege damage resulting from the
provision of medical services, regardless of whether Triage
performed those medical services. Triage argues that the
exclusion only bars coverage if damage resulted from medical
services that it performed. Thus, Triage argues that because
the Exeter Patients allege that Triage negligently hired and
supervised Kwiatkowski, but not that Triage performed medical
services, the exclusion does not apply. Exeter argues that
its own coverage is derivative of Triage's coverage;
thus, it contends, the exclusion applies to Exeter only if
Triage performed medical services.
healthcare professional services exclusion provides that the
insurance does not apply to any claim that alleges
"'Bodily injury' or 'property damage'
that result[s] from the performance of or failure to perform
'health care professional
services.'" The policy defines "Health care
professional services" to include, as relevant:
"Medical, surgical, dental, x-ray, nursing, mental, or
similar 'health care professional services' or
treatments" and "[p]roviding or dispensing of food,
beverages, medications or medical supplies or appliances in
connection with [the foregoing] services."
the words their plain and ordinary meanings, we conclude that
the healthcare professional services exclusion plainly
applies to any claim that alleges bodily injury that results
from the provision of medical services, regardless of whether
Triage performed those services. Contrary to Triage's and
Exeter's interpretations, the exclusion is not restricted
to situations in which Triage provided the medical services.
The exclusion sets forth a type of harm for which coverage is
excluded: bodily injury that results from the provision of
medical services. That is precisely the type of harm that
occurred in this case: the Exeter Patients' claims allege
a bodily injury (their infection with Hepatitis C) that
resulted from a medical ...