BENTON – Senior U.S. District Judge Phil Gilbert erased a $2,080,585.95 decision that St. Clair County Circuit Judge Heinz Rudolf entered against Liberty Mutual for denying coverage of a negligence suit.
“The duty to defend is broad but not endless,” Gilbert wrote on Feb. 22. “This case is simply beyond the outer limit of what is a potentially covered claim.”
He found that ruling for plaintiff Tommy Harris would require an unacceptable degree of imagination.
His order solved a riddle that Harris’s attorney Samantha Unsell posed when Liberty Mutual asked for consent to remove the suit to district court.
“Why would anyone consent to remove a case from St. Clair County?” she wrote.
Unsell asked opposing counsel if she could have some of the weed he was smoking.
She filed Harris’s suit in 2017, against Don Durham and his Durham Enterprises cleaning company. She claimed Harris suffered infections at a dialysis clinic in Belleville because Durham and his cleaning business failed to keep the place clean.
She claimed Durham’s negligence caused a series of infections that required surgeries on Harris.
In 2019, Durham agreed not to contest the claim.
Rudolf held a bench trial and assessed $750,000 for disfigurement, $500,000 each for loss of normal life and pain and suffering, and $330,585.95 in expenses.
He took Durham off the hook by ruling that Liberty Mutual and its Ohio Security subsidiary breached a duty to defend him and couldn’t deny coverage.
Unsell amended Harris’s complaint, naming the insurers as defendants who must satisfy the judgment.
Liberty Mutual removed the suit to district court on the basis of diverse citizenship.
Harris didn’t consent to removal, and Unsell moved to remand the suit to Rudolf.
Durham joined the motion.
At a hearing Gilbert asked Durham’s counsel, Ted Frapolli of Town and Country, Mo. why he didn’t sue the insurers.
“Why did you lay down?” Gilbert said.
Frapolli said that an insurer could go three routes, by accepting the defense, entering under a reservation of rights, or filing a declaratory judgment.
“They did none of these things,” Frapolli said.
Liberty Mutual counsel Peter O’Neill of Chicago said the policy excluded bacterial infections.
He said Harris filed a doctor’s certificate of merit indicating bacterial infection.
Unsell said the certificate wasn’t part of the complaint.
“He could have had other types of infections such as viral infections,” she said. “I’m not limited in scope by what my certificate says.”
Frapolli said, “The duty to defend is determined by the factual basis of the St. Clair County circuit court.”
Gilbert said, “Which puzzled me.”
He also said he didn’t know how the judge did that against Liberty Mutual, which wasn’t even a party to the suit.
“Why didn’t you mount a defense?” Gilbert said.
Frapolli said, “Because I was protecting my clients.”
Liberty’s attorney O’Neill alleged fraud and collusion and said he requested filings from the case.
Gilbert said, “It’s a public record, isn’t it?”
O’Neill said pleadings were missing.
“There are certain answers filed that are to different complaints,” O’Neill said. “There are incomplete numbers of complaints.”
Frapolli said it was all above board and fair play.
Gilbert denied remand and granted Harris a deposition of a Liberty Mutual witness.
After the deposition, both sides moved for summary judgment.
Gilbert stated in his order that a duty to defend is determined when an action is commenced, not on facts discovered later or ascertained at trial.
He found that the policy excluded injury that wouldn’t have occurred but for the existence of bacteria in a building regardless of other contributing causes.
“The certificate of merit confirmed that the vague allegations in the pleading supported only a cause of action for bacterial infection,” he wrote.
He wrote that he wouldn’t force Liberty Mutual to “put blinders on and proceed as if it did not know the nature of the infections.”
He found there’s no duty where an imagined situation is too speculative and reaches too far beyond known or ascertainable facts.
Last July, Unsell tried pursuing Liberty Mutual for the same amount and for the same reason in St. Louis City Court. But Liberty Mutual removed that case to federal court in St. Louis, and District Judge Audrey Fleissig transfered the duplicate action to Gilbert.
He has set a hearing for it on March 15.