August 29, 2018 Practice Points

Related Claims as a “Pattern or Practice of Behavior”

A series of lawsuits filed against an insured constitute “related-claims” because the lawsuits involve a “continuing pattern of anticompetitive behavior

by Parker Lavin and Emily S. Hart

The U.S. Court of Appeals for the Eleventh Circuit, has affirmed a district court’s finding that a series of lawsuits filed against an insured constitute “related-claims” because the lawsuits involve a “continuing pattern of anticompetitive behavior.” (Health First, Inc. v. Capitol Specialty Ins. Corp., 2018 WL 4025461 (11th Cir. Aug. 22, 2018)) The in an unpublished opinion (applying Florida law) demonstrates the court’s recognition of broad related claims provisions as well as the willingness to enforce such policy language. The opinion further reaffirms that, under Florida law and in the Eleventh Circuit more generally, claims may be “related” based on an alleged “patten or practice” of behavior, even where plaintiffs, timing, and factual allegations may differ.

Health First, Inc. was a defendant in a series of lawsuits between 1998 and 2013 alleging that it had engaged in various types of anticompetitive behavior, including Health First’s alleged use of “its monopolistic power to coerce doctors to admit patients exclusively to [its] facilities.” Health First’s insurer at the time accepted coverage for the first two lawsuits under policies issued in 1997 and 1998, and exhausted its limits under those policies. Health First then submitted the subsequent lawsuits for indemnification under its later-issued policies. The later insurers concluded that, because the subsequent lawsuits were related to the first two lawsuits, coverage was available only under the 1997 and 1998 policies because, under the policies’ related-claims provisions, related claims constitute a single claim first made when the earliest related claim is made. The later policies broadly defined “Related Claims” as “all Claims for Wrongful Acts based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transactions or events or the same or related series of facts, circumstances, situations, transactions or events, whether related logically, causally or in any other way.”

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