FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
PUERTO RICO [Hon. Jay A. García-Gregory, U.S. District
M. Martínez Nevárez, with whom González
& Martínez, PSC was on brief, for appellant.
Pérez-Ochoa, with whom Adsuar Muñiz Goyco Seda
& Pérez-Ochoa, P.S.C. was on brief, for appellee.
Howard, Chief Judge, Thompson and Barron, Circuit Judges.
BARRON, Circuit Judge.
appeal concerns the dismissal of a suit that Dr. Gerson
Jiménez-Castaner ("Jiménez") brought
against Liberty Mutual Insurance Company
("Liberty"). Jiménez alleges that Liberty
breached his contractual rights by wrongfully denying his
request for coverage under the Directors and Officers
("D&O") insurance policy that Liberty had
issued to a hospital in Puerto Rico where Jiménez
served as the medical director. The District Court granted
Liberty's summary judgment motion on the ground that,
under the policy, the "Claim" that would give rise
to the "Loss" for which Jiménez sought
coverage should be deemed to have been "first made"
before the policy at issue took effect and thus was not
covered by that policy. We now vacate the grant of summary
filed his suit for breach of contract under Puerto Rico law
against Liberty in the United States District Court for the
District of Puerto Rico in August of 2013. On appeal, the
core of the parties' dispute concerns the legal
significance, if any, of two amended complaints that had been
filed in a related lawsuit. An understanding of the
parties' dispute, therefore, first requires that we
provide a brief description of certain undisputed facts
concerning that suit. And so we begin there.
March 21, 2011, Lind Hernández and his sister, Nilda
Ester Hernández, (the "Hernándezes")
filed a lawsuit in the United States District Court for the
District of Puerto Rico against a Puerto Rico hospital and
several of its employees. That hospital is Hospital Episcopal
San Lucas Guayama, which is also known as Hospital Episcopal
Cristo Redentor ("Hospital").
same day that the Hernándezes filed their original
complaint in their suit, they also amended their complaint.
In that first amended complaint, they claimed that, while
Lind Hernández was a patient at the Hospital, the
negligence of the Hospital and certain of its employees led
to the amputation of both of his legs and entitled the
Hernándezes to, among other damages, compensation for
physical and emotional injuries. The Hospital was served with
the Hernándezes' first amended complaint on June
the time period in which the events alleged in the
Hernándezes' first amended complaint occurred,
Jiménez was serving as the medical director of the
Hospital. He was not, however, named as a defendant in either
the Hernándezes' original complaint or their first
amended complaint. Nor was any other director or officer of
the Hospital. Moreover, the Hernándezes' first
amended complaint was "devoid of any allegations of
wrongful acts" against such persons or Jiménez.
next event that is relevant to this appeal occurred on
February 28, 2012. That day, the Hernándezes, in
connection with their lawsuit, deposed Jiménez and
questioned him "extensively about his supervisory and
managerial duties as the Hospital's medical director, as
well as the Hospital's bylaws and other purely
the deposition, but on the same day, Jiménez conferred
with the legal counsel for the Hospital. The two of them
concluded that the Hernándezes might either file a new
lawsuit, or amend their complaint in their existing suit, to
bring claims against Jiménez in his capacity as the
medical director of the Hospital. Accordingly, that same day
-- February 28, 2012 --the legal counsel for the Hospital
forwarded a copy of the Hernándezes' first amended
complaint to the Hospital's insurance broker. The
insurance broker, also that same day, then forwarded the
Hernándezes first amended complaint to Liberty, on
behalf of "the insured," and requested that it be
"process[ed] under the [Hospital's November 2011 to
November 2012 D&O] policy and any other issued policy
that might apply."
time, Liberty had issued the Hospital a D&O policy with a
policy period that ran from November 30, 2011 through
November 30, 2012. Subject to certain exclusions, this policy
obligated Liberty to provide coverage for "all
Loss," including damages, that various
"Insured[s]" became legally obligated to pay as a
result of certain types of "Claim[s]" brought in a
civil lawsuit against them. Among the "Insured[s]"
the policy covered was the Hospital's medical
this policy is a "claims made" policy, which is a
type of policy that typically "covers acts and omissions
occurring either before or during the policy term, provided
the claim is discovered and reported to the insurer during
the same policy term." See DiLuglio v.
New Eng. Ins. Co., 959 F.2d 355, 358 (1st Cir. 1992)
(emphasis omitted). This type of policy, we have explained, is
premised on the notion that, "[a]s it is often difficult
to ascertain the precise date of the act or omission which
constituted the alleged [wrongful act] on the part of the
insured, . . . the pivotal event for insurance coverage
purposes becomes the date the claim is made against the
insured, rather than the date of the act or omission forming
the basis for the claim." Id. (internal
citation and alternations omitted).
policy thus contained the following important qualifications
regarding when "Insureds" must notify Liberty of
any "Claim" made against them. The policy provided
that any such "Claim" for which an
"Insured" sought coverage must not be "first
made" prior to the start of the policy period for that
policy. The policy further provided that a "Claim will
be deemed first made on the date an Insured receives a
written . . . complaint." Finally, the policy provided
that a "Claim" must be reported to Liberty "as
soon as practicable but in no event later than 60 days after
the end of the Policy Period or [the twelve-month] Discovery
Period, if applicable."
denied the insurance broker's request for coverage under
the D&O policy on March 26, 2012. Liberty explained that
it was doing so for three reasons. First, Liberty cited what
it termed "the late notice" to Liberty of the first
amended complaint in the Hernándezes'
lawsuit. Second, Liberty cited an endorsement in
the policy that excluded medical malpractice claims from
being covered. And, third, Liberty stated that the damages
sought by the Hernándezes in the first amended
complaint related to a loss for which there is no coverage
under the policy.
is one more sequence of events that relates to the issues
presented in Jiménez's appeal of the District
Court ruling dismissing his suit against Liberty. This
sequence begins almost a month after Liberty had informed the
insurance broker that it was denying the request for coverage
of "all Loss" resulting from the
Hernándezes' first amended complaint.
on April 23, 2012, the Hernándezes filed a second
amended complaint in their lawsuit. This complaint, for the
first time, named Jiménez, as a co-defendant in the
Hernándezes' lawsuit. In doing so, the second
amended complaint alleged negligence by Jiménez in
violation of Puerto Rico law due to his conduct as the
medical director of the Hospital. Jiménez was served
with the Hernándezes' second amended complaint on
May 3, 2012.
19, 2012, the insurance broker sent a copy of the
Hernándezes' second amended complaint to Liberty
with a request for coverage concerning the allegations
against Jiménez as the medical director of the
Hospital. That same day, Liberty reiterated to the
insurance broker that Liberty was denying coverage. Liberty
also thereafter denied a request by the broker for
then filed, on August 21, 2013, this lawsuit against Liberty
in federal court. In the suit, he alleges that Liberty
breached the Hospital's 2011-2012 D&O policy by
denying him the requested coverage for the "Loss"
that he would incur as a result of the "Claim" made
against him by the Hernándezes' in their second
amended complaint, and he seeks a declaratory judgment that
he "should be afforded coverage under the insurance
agreement," monetary damages, and attorney' fees.
lawsuit was consolidated with the Hernándezes suit.
Liberty then filed a motion for summary judgment as to
Jiménez's claims alleging that Liberty had
breached the terms of the D&O policy, and the District
Court granted that motion. Jiménez subsequently filed
a motion for reconsideration and a motion to set aside the
judgment, both of which the District Court denied.
now appeals the District Court's order granting
Liberty's summary judgment motion. Our review is de
novo. See Hill v. Walsh, 884 F.3d
16, 21 (1st Cir. 2018). "We may decide in favor of the
moving party -- here, [Liberty] -- 'only if the record
reveals that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.'" Soto-Feliciano v. Villa
Cofresi Hotels, Inc., 779 F.3d 19, 22 (1st Cir. 2015)
(quoting Avery v. Hughes, 661 F.3d
690, 693 (1st Cir. 2011)). Moreover, we note that "[t]he
construction of an insurance policy is a question of law, and
the legal conclusions of the district court are, of course,
not binding on the court of appeals." Nieves v.
Intercontinental Life Ins. Co. of P.R., 964 F.2d 60, 63
(1st Cir. 1992), as amended (May 18, 1992). We,
therefore, "may make an independent examination of [the]
insurance policy." Id.
first provide a description of the law that guides our
construction of the D&O policy issued by Liberty. We then
describe the policy's relevant provisions. With that
background in place, we then explain why we agree with
Jiménez's argument that the District Court wrongly
construed the policy in concluding that Liberty did not
breach it by denying Jiménez coverage for the
"Loss" that he would incur in consequence ...