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St. Paul Fire and Marine Insurance Co. v. Estate of John R. Hunt3/14/1991
In an action for declaratory judgment, plaintiff, St. Paul Fire and Marine Insurance Company (St. Paul), appeals from a judgment determining that it had a duty to provide coverage for a medical malpractice claim and was obligated to pay post-judgment interest from the date a default judgment was entered. We reverse.
John R. Hunt, M.D., practiced medicine until July 1983 when he surrendered his license, retired, and purchased a "claims-made" professional liability insurance policy from St. Paul. The policy provided coverage for claims made from 1983 through July 29, 1986, regardless of when the acts or omissions giving rise to any such claim occurred. The policy specifically and unambiguously states that in order to be covered, a claim must "be made while this agreement is in effect." Additionally, the policy answered the question, "When is a claim made?" as follows:
"A claim is made on the date you first report an incident or injury to us or our agent. You must include the following information:
"Date, time and place of the incident. "What happened and what professional service you performed.
"Type of claim you anticipate.
"Name and address of injured party.
"Name and address of any witness."
A patient of Dr. Hunt filed a medical malpractice claim against him on August 29, 1985. Dr. Hunt was served in that case that same month. Because he failed to answer the complaint, a default judgment was entered against the doctor on April 17, 1987, in the amount of $250,000.
That patient's claim was not reported to St. Paul until July 1987, and it denied coverage because notice of the claim had not been given to it until after the policy had expired.
Dr. Hunt died on February 28, 1988. On August 23, 1988, St. Paul brought this declaratory judgment action requesting that the court declare that no coverage exists as to the medical malpractice claim here at issue. Lenore Hunt, as the personal representative of Dr. Hunt's estate, answered the complaint and in that answer alleged, inter alia, that Dr. Hunt's failure to provide notice was "excused as a result of infirmity and incapacity . . . ."
During Dr. Hunt's life he was not adjudicated an incompetent or incapacitated person, nor was a conservator or guardian ever appointed to tend to his affairs. Nevertheless, at trial of this declaratory judgment action, the jury determined that Dr. Hunt was unable to give notice of the claim in question to St. Paul during the period of August 1985 to July 29, 1986, because of a mental impairment. The jury also found that his inability to give notice of the claim was not reasonably foreseeable to Dr. Hunt at the time he purchased the policy.
Based upon these findings, together with facts stipulated by the parties, the trial court declared that coverage by St. Paul did exist for the patient's claim to the policy limits. The court further found that St. Paul was liable for post-judgment interest on that amount from the date of judgment and, finally, that St. Paul was liable for the reasonable attorney fees incurred by the estate in defending the lawsuit. This appeal followed.
St. Paul contends that Dr. Hunt's mental impairment does not excuse non-compliance with the notice provision of the policy. Specifically, it contends that under a claims-made policy such as at issue here, the insured's duty to provide notice of a claim is a material condition precedent to coverage and that impossibility or impracticability of performance does not excuse the failure to comply with such a condition. We agree.
In general contract law, a condition is an event, not certain to occ
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