Sentinel Insurance v. Monarch Med Spa, Inc.

105 F. Supp. 3d 464, 2015 U.S. Dist. LEXIS 57310, 2015 WL 1954199
CourtDistrict Court, E.D. Pennsylvania
DecidedApril 30, 2015
DocketCivil Action No. 14-5450
StatusPublished
Cited by5 cases

This text of 105 F. Supp. 3d 464 (Sentinel Insurance v. Monarch Med Spa, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sentinel Insurance v. Monarch Med Spa, Inc., 105 F. Supp. 3d 464, 2015 U.S. Dist. LEXIS 57310, 2015 WL 1954199 (E.D. Pa. 2015).

Opinion

MEMORANDUM

KEARNEY, District Judge.

Commercial insurance policies define the insured’s scope of recovery and the insurance company’s obligations to indemnify or defend upon a defined loss. Sophisticated commercial insureds, such as a medical spa offering liposuction surgery through doctors and nurses, purchase a level of insurance coverage based on their business judgment. We do not re-write insurance policies because the negotiated terms excluding certain claims from coverage do not save an insured from claimed financial ruin. Here, Plaintiff medical spa owners purchased an insurance policy that unambiguously excluded coverage for claims related to exposure to bacteria and for “bodily injury” arising out of, rendering of, or failing to render any professional service. Notwithstanding our curiosity as to the business reasons for a medical spa purchasing a policy with these defined exclusions, there are no disputed issues of material fact concerning these exclusions defined in the purchased insurance policy. The numerous claims arising from personal injuries admittedly caused by Plaintiffs’ agents’ exposure to bacteria are not covered by the purchased insurance policy. In the accompanying Order, we grant the [466]*466Plaintiff insurer’s motion for summary judgment.

A. Undisputed Facts

Defendants1 are for profit medical spas providing cosmetic surgery procedures and medical spa services, including liposuction surgery, at various medical facilities. Undisputed Facts at ¶ 2. Defendants seek defense and indemnification coverage from Plaintiff Sentinel Insurance Company, Limited (“Sentinel”) for multiple underlying bodily injury claims arising from patient exposure to Group A Streptococcus bacteria (“GAS”) at “medical spa” surgical facilities operated and/or owned by Defendants in Timonium, Maryland and King of Prussia, Pennsylvania. Id. at ¶ 3.

Each Defendant is presently being sued in courts by claimants alleging they contracted severe invasive GAS bacterial infections, one of which was fatal (the “Underlying Claims”). Id. at ¶ 4. This exposure allegedly occurred in August and/or September 2012 during liposuction surgeries performed by Daniel Francis, D.O. (“Dr. Frartcis”). Id. at If 5.' Dr. Francis allegedly was the “Medical Director” at Defendants’ Timonium, Maryland and King of Prussia, Pennsylvania facilities. Id. at ¶ 13; The Underlying Claims allege Dr. Francis and a nurse tested positive for GAS bacteria and Dr. Francis self-treated a bacterial infection of his hands, prior to his interactions with the underlying claimants. Id. at ¶ 15.2 The Underlying Claims allege that the bacterial transmission occurred from infected doctor, nurse or surgical equipment to each patient’s open wounds during the liposuction procedures. Id. at ¶20.

Defendants purchased insurance coverage

Defendants purchased a multi-part policy for the policy period of October 27, 2011 to October 27, 2012 with coverage for Business Liability and an Umbrella Liability. Id. at ¶ 34. Each Defendant is identified as a named insured. Id. at ¶ 35.

The parties agreed that the Business Liability coverage is subject to a $1 million per occurrence limit of insurance and a $2 million general aggregate. Id. at ¶36. • Business Liability coverage is also subject to exclusion for exposure to fungi, bacteria and viruses:

EXCLUSION-FUNGI, BACTERIA AND VIRUSES

This endorsement modifies insurance provided under the following:

BUSINESS LIABILITY COVERAGE FORM OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVER[467]*467AGE FORM
This insurance does not apply to: .
1. Injury or damage arising out of or related to the presence of, suspected presence of, or exposure to:
a. Fungi, including but not limited to mold, mildew, and yeast;
b. Bacteria;
c. Viruses; or
d. Dust, spores, odors, particulates or byproducts, including but not limited to mycotoxins and endotox-ins, resulting from any of the organisms listed in a., b., or c. above;
from any source whatsoever.
2. Any loss, cost or expense arising out of the te.sting for, monitoring of, cleansing up of, removal of, containment of, treatment of, detoxification of, neutralization of, remediation of, disposal ■of, or any other response to or assessment of, the effects of any of the items in l.a., b., c. or d. above, from any source whatsoever.
However, this exclusion does not apply to “bodily injury” or “property damage” caused by the ingestion of food.

Id. at ¶ 87.

The Business Liability coverage is also subject to exclusion for “Professional Services”:

B. EXCLUSIONS
1. Applicable To Business Liability Coverage
This insurance does not apply to:
j. Professional Services “Bodily injury”, “property damage” or “personal and advertising injury” arising out of the rendering, of or failure to render any professional, service. This includes but is not limited to:
(4) Medical, surgical, dental, x-ray or nursing services treatment, advice or instruction;
(5) Any health or therapeutic service treatment, advice ,or instruction;
(6) Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming;

Id. at ¶ 38.

Defendants also purchased Umbrella Liability coverage, subject to a $1 millioh per occurrence limit of insurance and a $1 million general aggregate. Id. at 139. The umbrella liability coverage is in excess of the limits of the business liability coverage and/or self-insured retentions, depending on the purported potential coverage, if any, implicated by a claim. Id. at ¶40. The Umbrella Liability coverage is subject to various terms, conditions and exclusions, including the following exclusion for exposure to fungi, bacteria and viruses:

FOLLOWING FORM ENDORSEMENT-FUNGI, BACTERIA AND VIRUSES

This endorsement modifies insurance provided under the:

SPECTRUM UMBRELLA LIABILITY SUPPLEMENTAL CONTRACT
This policy does not apply to:
1. Injury or damage arising out of or related to the presence of, suspected presence of, or exposure to:
. a. fungi, including but not limited to mold, mildew, and yeast;
b. bacteria;
c. viruses; or
d. dust, spores, odors, particulates or . byproducts, including but not limit[468]*468ed to mycotoxins and endotoxins, resulting from any of the organisms listed in a., b., or c. above;
from any source whatsoever.
2.

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Bluebook (online)
105 F. Supp. 3d 464, 2015 U.S. Dist. LEXIS 57310, 2015 WL 1954199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sentinel-insurance-v-monarch-med-spa-inc-paed-2015.