Medmal Direct Wins Lawsuit vs. Broward Medical Center

Case Background

This complex civil dispute arose from a disagreement over insurance coverage stemming from underlying medical malpractice claims. The Plaintiffs were Broward Outpatient Medical Center, LLC (BOMC) and Beth Israel Outpatient Surgical Center, LLC (BISC). They brought the action against their insurer, Medmal Direct Insurance Company, in the Circuit Court of the 17th Judicial Circuit in Broward County, Florida.

The core issue centered on whether Medmal Direct owed coverage to BOMC and BISC for two separate underlying lawsuits the "Allen" lawsuit and the "Evans" lawsuit which alleged medical negligence. These underlying claims involved a specific physician, Merrill Reuter, M.D., who held a medical professional liability policy with Medmal Direct. BOMC and BISC asserted that, because Dr. Reuter was an insured party under the policy and they had an operational relationship with him, they deserved coverage and defense from Medmal Direct for the lawsuits arising from his actions. The Plaintiffs initiated this action in November 2021 seeking a judicial declaration that the policy obligated Medmal Direct to cover their defense costs and any ultimate liability in the underlying malpractice cases.

Cause

The primary cause of the lawsuit was Medmal Direct’s denial of coverage to the Plaintiffs for the malpractice claims. The Plaintiffs contended that the insurance policy's language concerning "Who Is an Insured" unambiguously extended coverage to facilities like BOMC and BISC when they faced claims arising from the professional services of an insured physician, such as Dr. Reuter, while acting within the scope of his duties for the facilities. The facilities argued that this refusal to defend and indemnify constituted a breach of contract by the insurer. The Plaintiffs also raised claims of equitable estoppel, alleging that th