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Barron v. Ncmic Insurance Co.

United States District Court, D. Massachusetts

May 4, 2018




         Plaintiffs (the “Barron Chiropractors”) are chiropractors who are insured under a professional liability insurance policy provided by Defendant NCMIC Insurance Co. (“NCMIC”). They filed this lawsuit asserting that NCMIC has a duty to defend and indemnify them in an action that is currently pending before this Court: Government Employees Insurance Company v. Barron Chiropractic & Rehabilitation, P.C., et al., No. 16-cv-10642-ADB (D. Mass. Apr. 1, 2016) (the “Underlying Action”). NCMIC moves to dismiss the complaint for failure to state a claim. [ECF No. 5]. For the reasons that follow, the motion to dismiss is GRANTED and the complaint is DISMISSED without prejudice. The Barron Chiropractors may file an amended complaint within 30 days of the date of this Order.

         I. BACKGROUND

         In evaluating NCMIC's motion to dismiss, the Court accepts the well-pleaded allegations as true. See Ruivo v. Wells Fargo Bank, 766 F.3d 87, 90 (1st Cir. 2014). The Barron Chiropractors have attached several documents to the Complaint, which the Court may consider as part of the pleadings. See Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008); Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008).

         Each Barron Chiropractor is insured under a Professional Liability Insurance Policy issued by NCMIC (the “Policy”) and has paid all of the required premiums. Compl. ¶¶ 9-12; [ECF Nos. 1-1, 1-2, 1-3].[1] In relevant part, the Policy's “Coverage Agreement” states:

We will pay on behalf of an insured all sums to which this insurance applies and for which an insured becomes legally obligated to pay as damages because of an injury. The injury must be caused by an accident arising from an incident during the policy period. The injury must also be caused by an insured under this policy.

[ECF No. 1-1 at 22]. The Policy's “Defense and Settlement Clause” further provides:

We have the right and duty to defend any claim or suit brought seeking damages against the insured for an injury covered by this policy. We have the right to appoint counsel and we may investigate any claim made or suit brought. With your written consent, we may settle any claim or suit as we believe may be proper. We shall not be obligated to pay any claim or judgment or to defend or continue to defend any suit after the limit of our liability is exhausted because of payment of judgments or settlements. Your consent shall not be required to make a settlement or payment after a judgment has been entered against you.

[ECF No. 1-1 at 22].[2] “We” refers to NCMIC and “You” refers to the insured. Id. at 21. “Claim” means “a written demand for money or services arising from an alleged injury to which this insurance applies.” Id. “Injury” is defined as “bodily injury, sickness, disease or death sustained by any one person.” Id. “Incident” refers to “any negligent omission, act or error in the providing of professional services by an insured or any person for whose omissions, acts or errors an insured is legally responsible.” Id. “Professional services” covers “services which are within the scope of practice of a chiropractor in the state or states in which the chiropractor is licensed.” Id. “Damages” means “the monetary portion of any judgment, award or settlement, ” except for punitive or exemplary damages, multiplied compensatory damages, uninsurable judgments or awards, and fines, penalties, or sanctions. Id.

         On April 20, 2016, the Barron Chiropractors notified NCMIC of the Underlying Action which had been filed on April 1, 2016, and requested defense and indemnity from NCMIC under the Policy. Compl. ¶¶ 2, 15. NCMIC denied coverage on May 10, 2016. Id. ¶¶ 15-16. On October 12, 2017, the Barron Chiropractors filed their complaint asserting that NCMIC breached the Policy by failing to defend and indemnify them with respect to the Underlying Action, and seeking a declaration of the parties' defense and indemnification rights and duties under the Policy. [ECF No. 1]. NCMIC moved to dismiss the Complaint shortly thereafter on November 6, 2017. [ECF Nos. 1, 5].


         To evaluate a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must “accept as true all well-pleaded facts alleged in the complaint and draw all reasonable inferences therefrom in the pleader's favor.” A.G. ex rel. Maddox v. v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting Santiago v. Puerto Rico, 655 F.3d 61, 72 (1st Cir. 2011)). The complaint must set forth “a short and plain statement of the claim showing that the pleader is entitled to relief, ” and should “contain ‘enough facts to state a claim to relief that is plausible on its face.'” Maddox, 732 F.3d at 80 (quoting Fed.R.Civ.P. 8(a)(2) and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “To cross the plausibility threshold a claim does not need to be probable, but it must give rise to more than a mere possibility of liability.” Grajales v. P.R. Ports Auth., 682 F.3d 40, 44-45 (1st Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A determination of plausibility is ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” Id. at 44 (quoting Iqbal, 556 U.S. at 679). “[T]he complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible.” Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st Cir. 2013) (quoting Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 14 (1st Cir. 2011)). “The plausibility standard invites a two-step pavane.” Maddox, 732 F.3d at 80. First, the Court “must separate the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).” Id. (quoting Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)). Secondly, the Court “must determine whether the remaining factual content allows a ‘reasonable inference that the defendant is liable for the misconduct alleged.'” Id. (quoting Morales-Cruz, 676 F.3d at 224).


         A. Relevant Principles of ...

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